A $90 trillion “great wealth transfer” will make millennials the “richest generation in history”, according to a new study.
The “blockbuster” findings predict that a “windfall” is set to “fall into the laps of millennials over the course of the coming decades”, said Fortune, “shifting the power dynamic in the economy away from boomers”.
But USA Today warned that millennials “may miss out” on the transfer of wealth, and there are concerns over whether younger generations are equipped to handle such sudden riches.
‘Sandwich generation’
Millennials are also “dealing with crippling student debt” and becoming the “sandwich generation”, which pays for both adult children and ageing parents. They have also “long been told how lazy they are”.
Knight Frank’s 2024 Wealth Report found that, over the next 20 years, $90 trillion in assets will be transferred between generations in the US alone. This means that millennials are expected to be five times richer in 2030 as the assets begin to change hands.
This will be quite a turnaround, said Fortune. It “hasn’t been an easy road” for millennials “thus far” as they grapple with an “increasingly inaccessible” housing market as well as a jobs outlook “irreversibly altered by a global pandemic”.
‘Destroying capitalism’
But boomers “may not be handing down as much as their children think”, said Yahoo Finance. A “slew” of studies have found a “notable disconnect” between how much millennials expect to inherit and how much “aging boomers plan on leaving them”.
A survey by Alliant Credit Union found that 53% of millennials expect to inherit at least $350,000 from their parents, yet 55% of boomers report that they’re planning to gift an inheritance of less than $250,000.
Healthcare costs could eat up a significant chunk of what might be handed over, said USA Today. “Americans struggle to pay for expenses like premiums, copayments, coinsurance, and uncovered health services”, so the great wealth transfer “may not be so great after all”.
Health payments are “one of the biggest factors that drives wealth depletion during retirement”, said a Nationwide Retirement Institute research report, so the “hoped-for transfer of accumulated wealth” may “ultimately end up in the medical system”.
There are also concerns over how qualified millennials are to manage sudden windfalls. In his book “The 100 Trillion Dollar Wealth Transfer”, veteran banker Ken Costa says there are risks to concentrating money in the hands of a new generation with an “agenda” to save the planet from the climate crisis and make the system more “fair”.
Speaking to the Financial Times, the 73-year-old warned that the “polarisation between the generations” that has “gone on in the last few years” will “destroy capitalism and the market economy” once the inheritances begin to move down the family trees.
Millennials and Gen Zers feel the least confident to handle new wealth, at 21% and 18%, respectively, according to Fortune.
The two age groups have grown up “amidst global and financial turmoil,” Suzanne Schmitt, head of financial wellness at New York Life, told Fortune, and having “witnessed economic changes in their formative years”, they “may be more risk-averse when it comes to financial habits than their predecessors”.