Want to build wealth? Your family transitions might matter more than you think. A groundbreaking study from Norway reveals that the timing of major family events – like becoming a parent, experiencing the death of your parents, or welcoming grandchildren – can significantly impact your wealth accumulation over decades.
The research, published in the journal Social Forces, followed nearly 48,000 Norwegians born in 1953 from age 40 to 64, tracking how their wealth changed alongside key family milestones. The findings challenge conventional wisdom about wealth building, suggesting that it’s not just about how much you earn or save but also about when certain family events occur in your life.
Perhaps most surprisingly, people who had children later in life or remained childless generally accumulated more wealth than those who became parents earlier. Those who experienced the death of their parents later in life also tended to build more wealth than those whose parents died earlier, particularly after age 55.
The study, led by scientists from the Max Planck Institute for Demographic Research, identified six distinct patterns of family life courses. At one end of the spectrum were childless individuals whose parents died either early (around age 45) or late (around age 59). At the other end were those who became parents and grandparents early, creating what researchers called “four-generation families” – situations where great-grandparents, grandparents, parents, and children were all alive simultaneously for about 15 years.
The wealth differences between these groups were substantial. By 2017, the gap between the highest and lowest wealth groups translated to about $32,600 in gross wealth (before subtracting debts) and nearly $36,000 in net wealth (after subtracting debts).
Interestingly, childless individuals started with the lowest wealth positions at age 40 but showed the strongest increase over time, eventually catching up to or surpassing many parent groups by their late 50s. This might be because they had fewer financial obligations and more opportunities to invest and save.
The study also found that those who became parents and grandparents later in life consistently maintained higher wealth positions. This supports the idea that delaying parenthood might allow for better financial foundation-building in early adulthood – a critical time for major investments like housing.
Source: https://studyfinds.org/late-parenthood-linked-to-greater-wealth-study-shows/