Few people in Germany consider themselves wealthy. A study by the Bundesbank from 2017 shows: Just three percent of the German population classify themselves as the wealthiest 20 percent. One possible explanation for this is that people compare themselves with their own environment, says Judith Niehues, an economist at the Institute of German Economy (IW). “There they often belong to the average and then also belong to the middle in the wealth distribution,” says Niehues.
A study by the employer-related IW has now calculated who really belongs to the “top ten percent”: Households that owned more than EUR 477,200 in 2018 were therefore among the wealthiest ten percent of the German population. Couple households in which the main income earner is between 55 and 59 years of age are over-represented in this group. Households with a paid property “in a good location” are also often included. Young households, on the other hand, are underrepresented in the group of the wealthiest ten percent.
With a fortune of 477,200 euros in wealth research, however, one is usually not yet considered “rich”. There is no uniform definition of when someone is considered rich. “Whether you are rich or not is a subjective idea that also varies with your social status,” says Judith Niehues. So one could definitely belong to the wealthiest ten percent, but not feel rich.
Big differences between age groups
Depending on your age, however, you belong to the “top ten percent” of your own age group with far lower wealth. Households with a main income earner under 30 years of age and assets of 71,300 euros or more are among the wealthiest ten percent of their age group. The wealth limit increases with age: 40 to 44-year-olds have wealth of EUR 438,900 and more, while this limit is the highest for 55 to 59-year-olds at EUR 625,400. Thereafter, the amount decreases with increasing age of the main income earner, down to 517,700 euros in the age group 75 and over.
The household structure is also of crucial importance in determining the “top ten percent”. The median wealth of households of singles or single parents, at around 20,000 euros, is significantly lower than that of couples with and without children living together (151,400 euros). A couple household with assets of 601,100 euros or more is one of the wealthiest ten percent, a main income earner without a partner with an income of around half that amount (305,700 euros).
Young households are particularly heavily indebted
The older people are, the lower the relative inequality in the distribution of wealth. This is mainly due to the fact that many people build up wealth over the years, says IW economist Niehues. In the older age groups, there are overall fewer households with very little wealth.
Households with a main income earner under the age of 30, on the other hand, are particularly often in debt: More than 20 percent of them have negative household net worth – i.e. more debts than assets. According to IW, this is primarily due to training and consumer loans. Households in which the main income earner is over 30 years of age are more likely to have mortgage loans; this is particularly true for couple households. They also have real estate assets more often.
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