Will the baby boomer transfer their massive wealth accumulation to the next generation? Some think it’s not meant to be.
Wealth Statistics: Boomers vs. Millenials
According to Census Bureau data, Boomers have far more wealth than any other generation. Boomers boast a median wealth of $240,000, compared to Millennials’ meager $27,000.
The forgotten Gen Xers fall in the middle, with about $120,000 in wealth, while Zoomers trail the pack with less than $5,000.
Generational Wealth Historic Key To Wealth Building
Many people rely on generational wealth to get ahead. Their parents offer financial assistance to pay for college and housing. An inheritance provides an economic boon, allowing them to get ahead.
An inheritance could make a massive difference for younger generations, offering them breathing room and the opportunity to finally get ahead.
Boomers Won’t Transfer Wealth to Next Generation
Unfortunately for the Millennial (and Zoomer) generations, a wealth transfer may not be in the cards.
Ahead you’ll find where Boomer’s wealth is going – and it’s not to their kids.
Healthcare
The rising cost of healthcare sucks everyone’s wealth away. As the aging Boomer generation manages their ailments, their wealth moves from their wallets into the massively bloated healthcare industry.
Long-Term Care Facilities
If doctors don’t get Boomer’s wealth, long-term care facilities will. These facilities siphon off every drop of wealth from their residents, taking their family homes, cars, bank accounts, and anything else they can access.
Reverse Mortgages
The Census Bureau data confirmed that most Baby Boomers’ wealth is tied up in their homes. In the past, the family home would be the most significant piece of an inheritance, but now, seniors can tap into their home’s wealth before they pass with a reverse mortgage.
The wealth and the home go back to the mortgage company rather than staying in the family.
Living it Up
Many seniors would rather live in luxury during their final days than offer their kids financial assistance.
They worked hard all their lives and feel that they deserve a break. They’re not wrong – retirement should be a time to enjoy life and do everything you couldn’t before.
Donating
While no one should expect an inheritance, some are shocked to discover that their parents would rather donate all their wealth than offer any to their children.
Many Don’t Have the Wealth To Transfer
$240,000 is the median wealth of boomers, meaning that approximately 50% of the boomer generation has less than that.
Even those at or near the median clearly don’t have enough wealth for a stable retirement. Even without living it up, they may not have anything left for their kids.
Millennials Lose Out Yet Again
Millennials are struggling in every aspect of their lives. Housing is unaffordable, wages remain stagnant, and they can’t even expect an inheritance to save their financial futures.
We can only imagine things will be worse for their kids, the Zoomers.
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Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.