Feb 26, 2025
America’s generational wealth gap is staggering, and according to Professor Scott Galloway the government’s economic policies are designed to perpetuate this divide rather than bridge it.
“I feel like almost every economic policy is nothing but a thinly veiled transfer of wealth from the young to the old,” Galloway told Rich Roll on an episode of his podcast that aired in 2024.
Advertisement
The NYU professor pointed to three key tax policies that favor older Americans that he believes have diminished the economic prospects of the youngest generation.
Here are the three biggest culprits driving this divide, according to Galloway.
Top 3 unfair policies
The most unfair economic policy according to Galloway is Social Security. “Every year we transfer one and a half trillion dollars — the greatest economic transfer in history happens every year from young people to the wealthiest generation in history senior citizens and it's called Social Security,” he told Roll.
According to the Social Security Administration, 69 million Americans are on course to receive Social Security benefits in 2025. Total benefits for the year are estimated at roughly $1.6 trillion. However, it should be noted that beneficiaries have also spent entire careers spread across decades paying into the program before they retired.
For those still working and paying into the program, its sustainability is deeply concerning. 73% of non-retired adults said they won’t receive enough benefits if the Social Security fund is depleted by 2033 as projected by the SSA, according to a Bankrate survey.
Despite these concerns, the program remains popular as 87% of Americans said the government should resolve the Social Security funding issue regardless of the impact on the national deficit, according to the National Institute on Retirement Security.
Besides Social Security, Galloway believes tax policies that favor assets over earned income are unfair. And, he says, this includes the mortgage tax deduction and capital gains taxes.
Advertisement
“Who makes their money selling stocks and selling assets? Guys my age,” says the 60-year-old. “Who makes their money with sweat? The guys in this room, the younger guys. Who owns homes? Older people. Who rents? Younger people.”
A 2024 study from Redfin confirmed that empty-nest baby boomers owned 28% of the large homes across the country, while millennials with kids owned just 14%. Meanwhile, the share of U.S. equities owned by those over the age of 55 has surged to 80%, according to Rosenberg Research & Associates.
Changes to economic policies could address some of this disparity, but in the interim there are several ways younger Americans can plug the gap independently.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Closing the gap
So what’s a millennial to do? Accumulating assets could be the best way to beat the generational divide. For those who have the luxury of seeking parental support, that’s one way to get a foot on the property ladder. (And allow you to enjoy mortgage tax deductions.)
Zillow’s chief economist Skylar Olsen told CNBC that roughly 40% of first-time homebuyers sourced some of their purchase funds from “the bank of mom and dad.”
You could also consider boosting your savings rate and focusing on tax-sheltered accounts such as the 401(k). The median 401(k) balance for someone in their 20s is just $34,225, according to Empower. If you can save more than your peers, leverage employer matching plans if you can, and invest in stocks, you could improve your chances of enjoying some of the same tax benefits seniors do.
“I do think we have to put more money into the pockets of young people who have seen a transfer of wealth,” Galloway says.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
