Income diversity increases as households age

Summary

• Older generations, including Baby Boomers and Traditionalists, have seen spending growth lag behind other generations.
• Spending growth has become more of a labor market story with after-tax wage growth picking up.
• As households age, their income sources become more diverse, reducing exposure to an improving labor market.
• Older households become more dependent on fixed income sources as they age.
• Households relying on Social Security are seeing the largest cost-of-living adjustment increase in four years.
• Data from the Federal Reserve Board of Governors (2025 Survey of Household Economics and Decisionmaking) shows income sources vary by age group.
• Income sources tracked include wages, salaries, self-employment, unemployment income, pension, Social Security, interest, dividends, rental income, and other.
• The report was prepared by the Bank of America Institute with contributions from Liz Everett Krisberg and David Michael Tinsley.
• Materials are for general information purposes only and do not constitute investment, legal, accounting, or tax advice.
• Views expressed are solely those of the Bank of America Institute and individual authors, not the BofA Global Research department.