The transfer of wealth by boomers in the next two decade represents a change in the economy that will reshape financial markets, housing, and businesses. Alongside cherished family stories and sentimental keepsakes, older generations are set to pass down an astonishing $84 trillion—the largest wealth transfer in history.
A fortune in the Marking
Baby boomers and the silent generation—those born before 1964—currently control 64% of the nation’s $190 trillion in wealth, according to the Federal Reserve. This vast fortune, accumulated over decades of economic growth, gradually is being transferred to hands of younger generations.
Where is the Transfer of Wealth Coming From?
A significant portion of this wealth is tied up in stock and bond investments, which have flourished alongside booming markets. Since 1985, the Dow Jones Industrial Average has surged nearly thirtyfold, leaving boomers with an average of $242,200 in their 401(k)s, according to Fidelity.
Real estate is another key asset. Boomers own 37% of U.S. homes while representing just over 20% of the population, per Census Bureau data. They also hold:
- 57% of vacation homes
- 58% of income-generating rental properties
For many millennials—45% of whom don’t currently own a home—inheritance could be their ticket to homeownership. In addition, as boomers downsize, larger homes will come on the market, waiting to be purchased by new families. Alternatively, these vacant homes could be redeveloped and divided into smaller homes appropriate to couples or singles.
Beyond Stocks and Homes
Boomers also own private businesses valued at nearly $8 trillion, including 41% of U.S. small businesses. While some are passing these businesses down to their children, many are opting to sell, providing opportunities for enterprising millennials.
And the transfer of wealth by boomers isn’t just happening after life’s final chapter. Many boomers are already helping their children and grandchildren with home down payments, student loans, and tuition. Tax-free gifts of up to $18,000 per individual ($36,000 per couple) per year provide a strategic way to pass on wealth while minimizing taxes.
The Bigger Picture in the Transfer of Wealth by Boomers
As millennials inherit their share of this massive transfer of wealth, they are poised to become the richest generation in history. This shift will have profound implications for industries, from housing and investing to entrepreneurship and employment trends.
The great wealth transfer is more than just a financial event—it’s a transformation that will redefine economic power for generations to come.