top of page
  • Writer's pictureKatherine Kohan

Generational wealth divide: Greater in Australia or America?

The answer may surprise you and not for the reasons you might think.

I find myself reading articles not infrequently about how younger generations are financially worse off than older generations in my two primary sources of news, the Australian Finance Review and the Wall Street Journal.

Which made me wonder - is the generational wealth divide greater in Australia or America?

Answer: America - because young Australians (through Superannuation which I have written about previously) forces retirement savings for all jobs and all ages (effectively).

However, it is not all roses for younger Australians, as the average house is over 2x as expensive than in America, meaning that while these younger Australians might on paper have more wealth relatively than their American peers, practically speaking, if they cannot access those funds and are unable to afford to buy a home, are they really better off?

Australians net worth in 2022

Key takeaways for Australia

- Wealth peaks between Age 65-74

- The wealthiest generation (65-74) has around 5x the wealth of the youngest generation (25-34)

- The wealth of those 65-74 is around 2.4x of those 35-44, 1.5x of those 45-54 and 1.1x of those 55-64

Caveat: For anyone out there, particularly those that I may have worked with previously, the data here is messy and I am forced to use averages versus medians (which I would have preferred). Additionally, for sake of ease, assume AUS = USD.

Americans net worth in 2022

Key takeaways for America

- Wealth peaks between Age 65-74

- The wealthiest generation (65-74) has around 10x the wealth of the youngest generation (25-34)

- The wealth of those 65-74 is around 3.3x of those 35-44, 1.8x of those 45-54 and 1.1x of those 55-64


The comparison that stands out is that the youngest generation of Australians has over twice the wealth of their American peers, while the other generation comparisons are relatively similar.

In both countries, home ownership is around 65% of the population and in both countries around 40% of those that are 25-34 own a home as of Q2 2023. Assuming a few other things being equal, this would make the key difference for wealth for those 25-34 as the savings rate - either for retirement accounts or for general purpose.

Given that the Australian superannuation retirement system requires savings of around 10% of salary for any job (while the equivalent US 401(k) is optional), my strong hypothesis is that this is why there is such a difference between wealth in younger Australians versus younger Americans, that then diminishes over age brackets, since the Australian superannuation program at around 10% has only been in place for about 20 years.

Real estate

As noted earlier, it isn’t all roses for younger Australians. The average home price in Australia has reached around $912K (AUS) in 2023 while in the US it is at around $416K (USD). That puts the average house price at over 2.5x the wealth of Australians 25-34 versus slightly under 2.3x the wealth of Americans 25-34.

For those 35-44, the story changes and that American cohort has around 1.3x the wealth of an average US home versus Australians 35-44 which have wealth around 75% (0.75x) of an average Australian home.

When you get to the wealthiest, in Australia, those 65-74 have wealth slightly less than 2x the average Australian house price while those in the US have wealth in excess of 4x the average American house price.

Now for a few data sidebars: Medians would have been better, because looking at the median US household wealth of those 65-74, it is only around 1x the average American house price, but the comparison here is not about the “x” number but how that compares between Australia and America and I could only find average numbers for Australia. Moreover, real estate values are baked into wealth numbers, so the point is around how the different housing values can vastly change the answer on what defines wealth between generations.

In sum, while the numbers may be different, younger Australians and Americans are both facing headwinds to certain types of wealth accumulation. Which might go a long way to explain this:


91 views0 comments

Recent Posts

See All


bottom of page