Six of the 25 richest Americans are over 80, says the Bloomberg Billionaires Index. Bloomberg’s recent article, “Octogenarians Rule the Rich,” says new IRS data shows the age of the top millionaires and billionaires in the U.S. People over 80 years of age make up only 3.7% of the population, but the IRS estimates that they control a larger share of the nation's top fortunes than people under 50.
The wealthy have most likely always been older than the general population, because it typically takes some time to amass great wealth. Facebook’s Mark Zuckerberg, the world's fifth-richest person at age 33, is the exception to the rule.
The IRS regularly analyzes the wealth of the richest Americans in its Personal Wealth Study. This research looks at those potentially subject to the estate tax, which is imposed on individual fortunes of $5.5 million or more. The most recent study estimated personal wealth in 2013. It found that 584,000 Americans, or about 0.2% of the U.S. population, have a combined net worth of $6.9 trillion. People in their 80s and 90s control $1.2 trillion of that wealth. Adults under 50 (about 43% of the population), have only $1 trillion.
Research from the University of California-Berkeley found that the share of U.S. wealth held by the top 0.1% has more than tripled from 1978 to 2012. That’s an increase of 7% to 22%.
Wealthy people in their 80s have the highest average net worth of any age bracket in the U.S. These richest Americans may be far wealthier than the IRS estimates. This is because wealth managers and estate planning attorneys use strategies like trusts to help the rich pass money to their heirs tax-free before they die.
The IRS research provides a unique insight into the portfolios of the wealthiest Americans. For example, the richest Americans invest heavily in businesses and non-public stock. Their personal residences also make up a small part of their wealth—just a little more than their art collections.
One reason why so many wealthy people are living and prospering into their 80s and 90s is that they're staying much healthier than other Americans. The wealthiest men are outliving poorer Americans by a widening margin. As recently as the early 1980s, the death rates of the rich and the general population were about the same. At ages 65 to 79, men in the top 1% were 12% less likely to die than the average American man in any year in that range. In the most recent estimates, the richest men in that age range had mortality rates 40% lower than average.
Reference: Bloomberg (August 23, 2017) “Octogenarians Rule the Rich”
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