Boomers are holding on to their money for as long as they can, rather than handing them down as inheritance to their children, according to a new report.
In recent years, around 12,000 boomers have turned 65 each day. Experts had assumed they would pass down their accumulated wealth as they retire, downsize, and plan their estates.
But the Great Wealth Transfer - in which baby boomers are expected to hand over billions of dollars to their millennial and Gen Z children - may not be as straightforward as previously thought.
A new survey of wealthy Americans by Charles Schwab found that almost half of boomers wanted ’to enjoy my money for myself while I’m still alive.’
Warren Buffett has also famously said he is not giving all his money to his children. But rather than wanting to spend it himself, he simply wants his kids - who are 66, 70 and 71 - to give it away to good causes as they have enough money anyway.
Boomers, born between 1946 and 1964, are famed for benefiting from great social mobility when house prices were low and labor conditions strong.
By contrast, only 11 percent of Gen X-ers and 15 percent of millennials said they too wanted to hold on to their own money during their lifetime.
Both groups were in fact more than twice as likely to choose to share their wealth while alive compared to the Boomers.
Warren Buffett is not handing down all his wealth to his children (Pictured: Howard, Susie and Peter Buffett)
’According to our survey, younger Americans could be poised to reshape legacy planning and the future of how wealth is passed to the next generation,’ Andrew D’Anna from Charles Schwab said of the findings.
Gen X, who are currently aged between 44 and 59, are set to be the biggest beneficiaries of the generational wealth transfer.
When it comes to fortunes that are worth $5 million or more, Gen X Americans from ultra-wealthy families can expect to receive their inheritance at age 46, according to a report by Wealth-X.
Boomers currently possess around $83.5 trillion in wealth, according to the 2024 UBS Global Wealth Report.
$17 trillion of that wealth is held in home equity, as the generation has experienced decades of property valuation growth.
Home prices have risen around 500 percent since 1983 - when boomers were in their 20s and 30s and just getting onto the property ladder.
A gigantic wealth transfer is due to happen in the US and worldwide in the next two decades
The bulk of the wealth transfer, which is due to take place over the next two decades, will be among the wealthiest families.
Separate figures from the Federal Reserve and wealth management firm Cerulli Associates in 2024 estimated that 68 percent of the wealth transferred between 2020 and 2045 will come from US households with at least $1 million in investable assets.
Boomers revealed that they on average plan to distribute 40 percent of their assets while still alive, and pass the remaining on after death, according to research from Edward Jones.
Boomers listed rising healthcare costs and longer lifespans as reasons to keep hold of their assets.
Even so, three out of four boomers are still looking to bequeath the proceeds of selling their home or the property themselves to their children, according to a 2024 Freddie Mac survey.
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