Compounding Creates Age Wealth Gaps

If everyone earned the same, saved the same share while working, and got the same investment return, older cohorts would still hold far more wealth simply because of years of saving and compound interest — an equal society can show steep age‑based wealth inequality. That means age structure and lifecycle math, not only inter‑cohort redistribution or policy favors, explain much of the wealth differences visible in cross‑sectional data. — Recognizing compounding‑driven age inequality reframes debates about who 'holds' wealth and guides whether reforms should target lifetime accumulation (e.g., retirement policy, housing, saving incentives) or within‑age redistribution.