Navigating the Great Wealth Transfer: What Gen Z and Millennials Can Expect
As the baby boomer generation approaches the age of retirement and beyond, a significant financial shift is poised to occur. Dubbed "the great wealth transfer," this phenomenon will see an estimated $84 trillion passed down to younger generations over the next 20 years. A comprehensive survey by USA TODAY Blueprint, conducted in November among 1,255 Americans aged 18 to 42, reveals insightful expectations and plans regarding this inheritance.
Expectations of Inheritance
The majority of millennials and Gen Z—68%—anticipate receiving some form of inheritance. Among these expectant inheritors, the breakdown of anticipated assets includes 82% expecting cash, 62% real estate, 41% vehicles, 32% investments and ownership stakes, and 19% other types of property.
Given the historical context, these expectations aren't unfounded. Since 1983, home values have surged by nearly 500%, benefiting from a period of economic prosperity that allowed many boomers to acquire and enhance their real estate assets significantly. This makes real estate a substantial component of anticipated inheritances.
Projected Inheritance Values
The average expected inheritance among respondents is around $320,000, though there's significant variability:
51% expect to inherit $100,000 or more
33% anticipate over $200,000
15% expect at least $500,000
6% foresee inheriting $1 million or more
Plans for Inherited Wealth
The intentions for these inheritances also vary widely:
76% plan to save or invest
40% aim to pay off non-mortgage debt
22% will allocate funds for travel
21% plan to pass wealth to their children
20% will use it to pay off mortgages
17% consider home improvements
16% are thinking about purchasing new property
15% would fund education for themselves or children
8% plan charitable donations
5% intend to gift money to friends or family
4% are looking at luxury spending
Economic Implications
This influx of wealth holds the potential to significantly alter the financial landscapes for many young Americans. However, 57% of the survey's respondents express concerns that this wealth transfer might further exacerbate wealth inequality, highlighting a critical socio-economic issue.
Further Studies and Resources
For those interested in deeper insights, studies by financial institutions and economic think tanks, such as the Brookings Institution and the Heritage Foundation, provide extensive analysis on the implications of such wealth transfers. These resources offer projections and policy suggestions that could help mitigate the widening wealth gap.
In summary, as we witness the largest generational wealth transfer in history, millennials and Gen Z stand at a pivotal juncture. How they manage and disperse this wealth could redefine economic paradigms for the future, impacting not just personal financial security but also broader socio-economic structures.
Ready to seize control of your financial destiny? Connect with the Shaina McAndrews Team today to navigate the Great Wealth Transfer with confidence. Empower yourself with insights tailored for Gen Z and Millennials. Let's secure your prosperous future together. Reach out now!
