Millennials on the Brink of a Generational Windfall Thanks to Baby Boomer Parents
As Baby Boomers savor the retirement phase of their lives, they’re now pondering how to pass on their hard-earned wealth to their offspring.
The amount of wealth about to be transferred is huge: approximately $68 trillion. This massive wealth transfer is poised to transform Millennials into the wealthiest generation ever.
Financially speaking, the transfer is timely for the younger generations, considering the hurdles Millennials face, from economic downturns and sky-high tuition fees to the seemingly elusive dream of affordable housing.
While Millennials can expect substantial inheritances, many Baby Boomers plan to bestow less than anticipated. Surprisingly, more than half of Millennials are banking on around $350,000, yet 55% of Baby Boomers aim to leave behind less than $250,000.
Various factors, including Baby Boomers’ job security and aspirations for career progression, may influence their decision to extend their working years to bolster their financial coffers. Rising healthcare expenses and longer life expectancies may significantly trim the available inheritance.
This generational wealth transfer will unleash seismic waves throughout the economy. By the 2030s, Millennials are projected to hold a whopping five times their current wealth, potentially igniting a spending frenzy, boosting investments, and propelling economic growth. The stock market may soar with more money flooding into investments.
Moreover, wealth transfer could make homeownership possible for Millennials who have grappled with exorbitant housing costs. This surge in homeownership could kickstart a cycle of economic growth through property upkeep and interior design. Inevitably, increased demand for housing could even lead to a rise in housing prices.