For most Americans, a major contributor to wealth is home equity, which comprises about a quarter of the wealth of individuals 65 and older. Retirement accounts and mutual funds are also important sources of wealth.  According to the ICI Fact Book, an estimated 90 million individual investors owned mutual funds in 2014. These investors held 89 percent of total mutual fund assets, directly or through retirement plans. About 53.2 million households (43% of all households) owned mutual funds. Among households owning mutual funds, the median amount invested in mutual funds was $103,000. Most households that own mutual funds have moderate incomes – 91% below $200,000/year. Most investors are over 50 and a large majority (91%) is saving for retirement. One reason the age profile of income and wealth matters is that a lot of proposed solutions to inequality focus on making “the rich” pay more in taxes. But consider: at age 65, life expectancy is about 20 years and uncompensated healthcare expenses will average $20,000 a year. That’s $400,000 total.

Except for homes, most assets can be readily turned into revenue streams at retirement. These include the value of bank accounts, bonds and securities, savings bonds, stocks and mutual funds, life insurance policies, IRAs and KEOGH accounts, defined contribution accounts, real estate holdings, and business equity.  Just 26% of Americans have at least $300,000 of such assets at or near retirement age. With an average life expectancy of about 20 years after 65, and assuming a retirement age of 65, $300,000 would translate to roughly $1700 extra a month. Perhaps enough for property taxes, home insurance, utilities, home repairs, and paying  the mortgage  - the latter still owed by  two-thirds of the 65 and older crowd.  Then Social Security would pay for remaining expenses. In theory.