Why older Americans' wealth may be helping keep consumer spending strong

American consumers have continued spending despite persistent pressure from housing costs, debt and everyday expenses.

Economists have debated whether we're still in a "K-shaped economy" — where higher-income households' spending masks financial strain among lower- and middle-income Americans. 

Consumer spending resilience may be better explained by generations than by income differences, said economist Ed Yardeni, president and chief investment strategist of Yardeni Research. He calls it a "G-shaped economy" because it illustrates a generational divide.

"If you look at the K economy, it's us versus them; it's the rich versus the poor," Yardeni said. The current economy, he said, "has a lot more to do with age."

Yardeni said baby boomers are living longer, staying healthier and staying active longer — and spending more on themselves, their adult children and grandchildren. Plus, older Americans have investments, retirement savings and home equity that can provide greater spending power, he said.

"There is an affordability crisis. It's for younger people. Older folks, seniors, have accumulated an enormous amount of net worth," he said.

A new survey by Principal Financial Group, provided exclusively to CNBC, found that 53% of baby boomers said they felt able to manage their debt, compared with 42% of Generation X and millennials, and 39% of Generation Z.

The findings come from a U.S. consumer survey fielded from April 17 to May 16 that included 1,000 respondents. The survey has a margin of error of plus or minus 3.1 percentage points.

Boomers also reported the highest satisfaction with their current financial situation, at 41%, compared with 29% of Gen X, 36% of millennials and 34% of Gen Z.

And 52% of boomers said they had enough financial knowledge to make confident decisions, compared with 40% of Gen X, 42% of millennials and 36% of Gen Z.

"Life stage can provide really important context and insight around how Americans, consumers, are feeling today and experiencing the economy," said Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal Financial Group.

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New Federal Reserve data underscores how Americans' wealth has fluctuated across generations.

Families headed by someone age 75 or older experienced a 37% increase in inflation-adjusted median net worth between 2022 and 2025, according to the Fed's "Changes in U.S. Family Finances from 2022 to 2025" report from the Survey of Consumer Finances, released Friday.

Meanwhile, families headed by someone under age 35 saw their median net worth decline 23% over the same period.

Other age groups experienced considerably smaller changes, the Fed found. Median net worth rose 5% among families ages 35 to 44 and 3% among those ages 55 to 64, while declining 6% among families ages 45 to 54 and 4% among those ages 65 to 74.

According to the report, "retirement income growth seems to play a key role" in improving the net worth of the oldest households. The findings compare group medians across survey years, rather than tracking the same families over time.

The Fed also found that median income rose 24% for families headed by someone age 75 or older between 2022 and 2025, compared with just 2% for families under 35.

Research also shows older Americans, particularly those with substantial investment portfolios and retirement savings, are increasingly drawing on accumulated wealth to support spending.

During the three months ending in April 2026, 8.2% of individuals moved money from investment holdings to their checking accounts, according to a September report from the JPMorganChase Institute. That's up from 4% during the same period in 2019. The economic think tank, which is part of JPMorgan Chase, examined more than 20 million de-identified Chase checking accounts.

Investment withdrawals also represented a growing share of consumer spending, the report found. In April 2026, net transfers from investments to checking accounts equaled 6.8% of spending, up from 3.5% in April 2019.

"Generally, people's engagement with retail investment accounts, the money going in, the money going out, we're seeing that's becoming more a part of everybody's day-to-day experience of their household," said Chris Wheat, president of the JPMorganChase Institute and co-author of the report. "It goes up for people that are older. It goes down for people that are younger."

"If you've had a whole career, a long time to build up that money, then you have more that you can take out," he said. 

The Institute's research found that Americans over 65 and those with higher incomes were more likely to support spending from investment accounts. 

Among individuals age 65 and older in the top 10% of income earners, 37.3% made net withdrawals from investment accounts in 2025, up from 24.5% in 2019, according to the report. Those investment flows equaled 14.9% of the group's spending, up from 8% in 2019.

The trend may reflect several factors, including normal retirement withdrawals, the long-term shift from traditional pensions to defined-contribution retirement plans, and a potential wealth effect from stock market gains, according to the report.

Experts say the generational divide does not mean every baby boomer is financially secure or every younger American is struggling. However, it may become an increasingly important factor in understanding the U.S. consumer economy, they said.

—CNBC's Stephanie Dhue contributed reporting.