From Kiplinger · · 3m
Who really wins the great wealth transfer
Trillions are moving between generations, but the windfall isn't as great or as equal as you might think.
In brief
Trillions are moving between generations, but the windfall isn't as great or as equal as you might think. Most Americans won't inherit anything, and those who do will likely receive it around age 60 when they need it least. Originally reported by Kiplinger.
The $124 trillion promise
Cerulli Associates projects $124 trillion will transfer through 2048, with $105 trillion to heirs and $18 trillion to charity.
The real number is smaller
After deducting debt, taxes and retirement spending, the actual spendable transfer is closer to $36 trillion over 20 years.
The rich get most of it
Households worth $10 million or more, about 2% of all households, account for roughly half the entire transfer.
Most people get nothing
Only about one in three Americans ever receives an inheritance. The median is far lower than the $46,200 average.
Top 1% average $719,000
The bottom half of recipients average around $9,700, while the top 1% average about $719,000.
Millennials inherit the most overall
Millennials will inherit around $46 trillion over 25 years, the most of any generation, but Gen X gets $14 trillion in the next decade.
You'll wait until age 60
Federal Reserve analysis finds inheritance receipt peaks around age 60, too late to help with a home down payment or starting a family.
The racial wealth gap persists
White households are 2.8 times more likely to receive any inheritance and inherit 5.3 times as much as Black households.
One in ten Black families inherit
Around a third of white families ever inherit, versus roughly one in 10 Black families, according to a 2023 Boston Fed study.
Women get it first
Some $54 trillion will move between spouses first, with nearly $40 trillion going to widowed boomer women who outlive their husbands.
Pensions leave nothing behind
Traditional pensions pay income for life then stop. A 401(k) or IRA can be inherited, but pensions generally can't.
Home equity isn't liquid
Boomers hold about $19 trillion in real estate. Unlike a brokerage account, a house can't be divided without selling it.
Some states tax more
Twelve states plus D.C. impose an estate tax, and five states levy an inheritance tax. Thirty-three states levy neither.
Boomers plan to spend it
In a Charles Schwab survey, 45% of affluent boomers said they'd rather enjoy their money while alive than preserve it as inheritance.
“45% said they'd rather enjoy their money while they're alive than preserve it as an inheritance.”
Healthcare drains the wealth
Fidelity estimates the average 65-year-old will spend about $185,000 on healthcare in retirement before long-term care costs.
Have the awkward conversation
Nearly 30% of American parents have no formal estate plan, including a will. Treat any inheritance as a bonus, not a foundation.
The bottom line
Most Americans won't inherit anything, and those who do will likely receive it around age 60 when they need it least.
