In France, the average age for peak wealth is shifting, with individuals now reaching this point around 60, compared to 55 in 1998. Wealth typically rises until age 50, remains stable until 75, and then declines. Factors contributing to this trend include improved living standards for retirees and advantageous home purchases. Additionally, inheritances are received later due to increased life expectancy. However, as retirees face rising dependency costs, their financial situation may resemble that of younger adults post-75.
What age do we reach our peak wealth? You might find the answer surprising. In fact, the average age when individuals in France hold the most wealth is steadily declining. According to a recent report from the National Institute of Statistics, ‘In 2021, wealth typically rises with age until about 50, levels off, and then declines after 75 for individuals living independently‘. At the age of 75, the average wealth stands at 360,000 euros, excluding any debts.
This shift indicates that the peak wealth age is occurring later than before. In 1998, the peak was around 55 years, rising to 60 by 2010. However, there’s been a noticeable decline in wealth among older households since then. As of 2021, instead of a peak, we observe a plateau of wealth accumulation between the ages of 50 and 75, with declines only becoming evident after 75. The National Institute of Statistics attributes this trend to two primary factors.
Shifts in Generational Wealth
Firstly, the standard of living for older adults has improved over the years. An increase in pensions likely enables retirees to draw less or even expand their wealth, rather than compensating for decreased living standards post-retirement, as noted by Insee. This situation contrasts sharply with that of earlier generations.
‘My mother had a pension, but she often struggled financially. We had to assist her‘, shared a retiree in an interview. ‘At that time, it was uncommon for women to work, leading to very limited pensions‘, another retiree remarked.
Inheritances and Delayed Wealth Transition
Furthermore, today’s 75-year-olds are fortunate to have purchased their homes at advantageous times. ‘They acquired their primary residences before the 2000s, benefiting from the significant price surge in the early 2000s. This has naturally boosted their wealth‘, explains economist Maximilien Coussin, a member of the Veblen Institute’s expert committee.
Another contributing factor is that inheritances are often received later due to increased life expectancies. ‘As life spans extend, individuals tend to pass away later, which means children inherit later as well‘, states Me Morgane Jarry, a notary based in Strasbourg.
However, caution is warranted. As retirees may need to tap into their savings later in life, particularly to cover dependency costs, the age at which wealth decreases aligns with when dependency becomes more prevalent. After turning 75, their financial resources can resemble those of 18-24-year-olds, marking a significant reversal in their financial journey.