From its earliest days, the United States has been seen as a land of opportunity—a place where, with hard work and determination, anyone could build wealth. The promise was simple: save diligently, invest wisely, and you could achieve the American Dream—owning a home, retiring in comfort, and enjoying the rewards of your labor. Financial independence, property ownership, and the ability to avoid unmanageable debt have long been considered key markers of success in American culture. While we may debate whether these are the best or only measures of success, there’s no denying their significance—especially as people live longer and seek to maintain well-being throughout extended lifespans. 

Yet  the ability of American adults to achieve financial benchmarks that contribute to well-being and longevity has shifted over recent decades, and differs significantly by generation. Data from the Stanford Center on Longevity’s Sightlines Project reveal a complex picture. Over the past two decades, reaching some of these financial milestones – especially home ownership – has become increasingly difficult.  And where there are improvements, the gains are not shared comparably across age groups. These evolving patterns have profound implications for Americans’ financial security and resilience, and create both generational and age-specific challenges for people to be prepared financially throughout longer lives.

Using data from nationally representative surveys of tens of thousands of Americans, we find that financial gains are not limited to older adults, nor are struggles confined to the young. Compared to their counterparts in the early 2000s, Americans of every age today are less likely to own a home and more likely to be ensnared in stifling debt – especially from credit cards, medical bills, and student loans—but there have also been notable improvements in financial resilience.

Contrary to popular belief, many Americans are now more likely to have retirement savings, access to emergency funds, health insurance, and a lower risk of poverty than people of the same age two decades ago. Younger adults (ages 25–44) and older adults (65+) are generally doing better across most major financial measures than Americans in the same age groups did in 2004. The picture is different for middle-aged Americans (45-64) who are now worse off,  falling behind on nearly every financial metric compared to those in the same age group 20 years ago. Thus, it is middle-aged and not young Americans who are now worse off financially compared to same-aged Americans two decades ago. 

Our findings echo the work of Columbia professor John W. Rowe, MD, a member of the SCL Advisory Council and Professor of  Health Policy and Aging at Columbia Mailman School of Public Health, and  Stanford Medicine professor David Rehkopf, SCL faculty co-director and director of Stanford Center on Population Health Science, who found that the health status of middle-aged Americans is worse than those of younger and older age groups. Sightlines data suggests that the next generation of older adults, Americans currently in their mid-40s to mid-60s, may be less prepared to finance longer lives than today’s 65+ adults. 

Younger Americans, for their part, do face significant financial challenges that undermine long-term preparedness, primarily driven by difficulties in securing a strong financial foundation early in adulthood. Despite improvements in retirement savings rates, 40% of Americans between 25 and 34 still do not have a retirement savings account. They are also the least likely to have investment accounts or own their home, and are most likely to be caught in a cycle of chronic debt. 

Despite these risks to long-term financial resilience, the current financial well-being of Americans aged 25 to 44 seems to be better than that of prior generations at the same age.  This age group is more likely to have access to emergency funds and is significantly less likely to be at risk of poverty compared to young Americans in the early 2000s. Findings from McKinsey and the Center for American Progress similarly suggest that Millennials and Gen-Z Americans also have more disposable income than did Gen-Xers and Baby Boomers at their age.   

And for some, it’s about to get better thanks to the “great wealth transfer.” The financial services firm Cerulli projects that wealth transferred between generations will reach $124 trillion by 2028, with nearly $100 trillion flowing from Baby Boomers and older generations mostly to heirs, and a smaller portion to charity. Yet, the impacts of the wealth transfer will be limited, since roughly half of the $124 trillion will be transferred within affluent families that make up only 2% of households.

These mixed trends indicate that younger people are shifting their focus from long-term financial well-being to immediate financial concerns such as covering monthly expenses. Research by Hal Hershfield, Professor of Marketing, Behavioral Decision Making, and Psychology at UCLA’s Anderson School of Management,  finds that investments in long-term financial well-being are associated with the connection people feel to their future selves.  “If I consider my future self another person to whom I feel a sense of responsibility and duty, it might mean ‘maybe I should think a little bit more about increasing my retirement contributions over time, considering long-term care insurance or annuities, or the types of things that can make life easier in the long run,’” says Hershfield. “Because I care about that future version of me.” 

While Hershfield says there is not clear longitudinal data to explain whether the decline in long-term investment behavior is due to economic or psychological factors, his findings do raise concern that Americans are feeling more distant from their future selves and are at heightened risk of failing to prepare financially for longer lives.

Financial literacy education is one proven method of changing people’s behavior so they are more likely to engage in long-term savings and investment . Data from the World Economic Forum shows that Americans’ financial literacy has not improved in recent years and remains poor compared to other advanced countries,  pointing to the need for better financial education for young Americans. (See our story on a program that uses hip-hop to teach financial concepts to K-12 students)

Unlike younger and middle-aged Americans,  older Americans’ financial well-being seems to be relatively good, and better today than it was 20 years ago.  Americans older than 65, and especially people ages 75+ are more likely to have retirement savings and access to emergency funds than people of the same age were in 2004. In fact, with 75-81% of older Americans having access to emergency funds, they are the most likely age group to be able to address pressing financial needs. Moreover, older Americans saw the smallest declines in home ownership rates, and they remain the most likely age group to own their home. Taken together, these findings suggest substantial improvements among older Americans, coinciding with their increased participation in the workforce. Despite substantial improvements and the fact that poverty risk fell among older Americans more than it did among younger Americans since 2004,  one in three older Americans were still at risk of poverty in 2024, a rate second only to children under the age of 18. In addition,  Americans older than 75 saw the largest increase in the likelihood of being in a chronic cycle of debt, suggesting they are at risk of outliving their financial resources.  

Insights from Sightlines show that America has made important strides toward financial preparedness for long lives over the past two decades. This is no small feat, given the economic challenges during this time – primarily the “great recession” and the COVID-19 pandemic. It is important to remember, however, that most improvements are not distributed equally between age groups, nor between different demographics within age groups. The challenges in the coming years would be to provide young American adults with a solid financial launchpad, help middle-aged Americans recover and catch up with improvements in other age groups, and ensure older adults can stave off poverty and be able to pay for longer lives than they financially planned for. 

by Martha Deevy and Yochai Z. Shavit, PhD

Keep reading Issue 2