Baby boomers, born between 1946 and 1964, have amassed $80 trillion in cumulative wealth in the U.S., nearly as much as all other living generations combined. The oldest boomers are now reaching 80 years old, and some of their wealth has started to be passed down to younger generations, marking the beginning of the “Great Wealth Transfer.” Economists estimate that the children of boomers, primarily millennials born between 1981 and 1996, will inherit between $70 trillion to $90 trillion in assets in the coming decades, potentially making them the richest generation in history.
While the wealthiest 10% of Americans hold the majority of the country’s assets, the rest of the wealth, tens of trillions of dollars, will be transferred to the children of middle-class and lower-class boomers. The anticipated massive transfer of wealth is expected to have significant implications not just on the economy, but also on culture and politics. Some experts view the Great Wealth Transfer as a means for millennials to recover from the economic challenges they have faced, such as recessions, the impact of the coronavirus pandemic, and increasing costs that have made homeownership difficult.
There are differing opinions on the impact of the Great Wealth Transfer. Some believe it can help millennials regain lost economic ground by providing them with increased buying power to shape the country to fit their tastes and political worldview. Others fear that the transfer of wealth will deepen inequality by benefiting only the children of the wealthy, leading to calls for stronger inheritance taxes to distribute boomers’ wealth more equitably. Some experts doubt the scale of the wealth transfer, suggesting that most boomers may deplete their wealth on healthcare and elder care before passing it on.
The distribution of inherited wealth may further entrench inequality for another generation, as most of the riches are expected to end up with people who do not necessarily need them. However, even smaller inheritances could be life-changing for those in the middle and lower classes. The potential impact of the wealth transfer on gender inequality is also noted, as it is expected to narrow the gender wealth gap. Younger generations, with their greater financial power, will have the ability to influence corporations, societies, and governments, potentially shaping the world around them.
To ensure that boomers’ wealth serves the country as a whole, there are calls for new laws and policies to create a more equitable distribution of income and wealth. The transfer of wealth from boomers to younger generations is not expected to occur until millennials are close to retirement themselves, meaning that many may not receive their inheritance when they need it most. Ultimately, the Great Wealth Transfer presents a complex and multifaceted phenomenon with far-reaching implications for the economy, culture, and politics in the United States.
