The multitrillion-dollar ‘great wealth transfer’ is still at least a decade away: ‘It’s not really a present conversation’

Must read

Millennial and Gen Z heirs are eagerly awaiting a so-called “great wealth transfer,” worth potentially $84 trillion, from baby boomer parents or relatives. And many of them may be waiting a bit longer than they’d expect.

That’s according to Stephen Sikes, chief operating officer of investing platform, who says the bulk of the wealth transfer is still 10 to 15 years away—at least.

“The truth is, if you look at the weighted average age of inheritance, it’s in the fifties—high fifties,” Sikes said during a conversation at Fortune‘s Future of Finance conference, taking place in New York on Thursday. “People don’t inherit money in their twenties and thirties outside of quite tragic circumstances.”

While the headlines about the wealth transfer can make it seem imminent, the baby boomers set to leave behind trillions in assets are living longer and healthier lives than previous generations, and, to Sikes’s point, the inheritance age has been creeping up over the past few decades. The bulk of heirs now receive inheritances between the ages of 46 and 75. Retirement is also lasting longer, which can lead to a spend-down of some of the assets—particularly in this era of high inflation.

“It’s not really a present conversation that we’re having,” Sikes said.

Not only will younger generations need to wait for the transfer of wealth, they also might not be set to receive quite as much as they expect due to those long retirement periods and the high price of aging in the U.S., including health care and long-term care costs.

During the conversation, Liza Landsman, CEO of Stash, pointed out that millennials may want to temper their expectations of how much they’ll receive, citing recent research that found while more than half expect to receive about $350,000, the majority of boomers plan to leave less than $250,000.

And only the already-wealthiest families can expect to receive much of anything when the transfer does occur. Research from the Federal Reserve Bank of Boston finds around one-third of white families and just one in 10 Black families receive any inheritance at all, most of which will be less than $50,000. Researchers at the University of Pennsylvania found the likelihood of receiving an inheritance in any five-year period is just 7.4%, although that grows by income level.

Still, a $50,000 or $250,000-cash infusion would be significant for virtually any household in the U.S. To that end, Landsman says it’s important for financial companies to start helping their consumers prepare for that eventuality.

More articles

Latest article