Written By Rohan Girvin
Baby boomers are the wealthiest generation to have ever lived, accumulating money and assets over their lifetimes (Allainz, 2025). During their lifetimes they experienced rapid evolutions in modern medicine, changes to the political landscape of the world, and incredible innovations in technology that they were largely responsible for driving. In the United States, baby boomers account for 51.8% of the country’s total wealth, worth $78.55 trillion (Reed, 2024).
However, the baby boomer population is aging: the youngest baby boomers are 61 years old and the oldest are 79. As the group ages and many baby boomers pass away, the wealth they have spent their lives amassing will be passed down to their children. This phenomenon has been deemed the ‘Great Wealth Transfer,’ and is set to transpire over the next two decades. An estimated $68-84 trillion is estimated to leave the hands of baby boomers and find ownership under their spouses and descendants in the subsequent generations. The Great Wealth Transfer is a greatly important moment in our history, given its economic impacts and investment implications (Haas, 2024).
The scale of this transfer is simply unprecedented. For reference, the United States GDP was roughly $27.4 trillion in 2023, making the value of wealth – mostly in the form of cash, equities, and real estate – to be transferred three times that mark. This colossal event is already underway, and many Americans are expecting to be impacted by it in the near future. A survey found that the majority of Millennials (55%) believe that they will inherit a collection of money or assets within the next five years. The same survey concludes that roughly 41% of Americans in Generation Z (those born between 1997 and 2012) are expecting inheritance within the same five year timeframe (Citizens, 2024).
This transfer in wealth has the potential to significantly alter the general landscape of the United States, impacting the macroeconomy and lives of individual Americans in many ways.
A survey conducted by Citizens Bank in partnership with Wakefield Research aimed to understand how these younger Americans hope to spend the wealth they inherit. Of the survey constituents, 60% say that they will invest part of their sum. 51% of the group claimed they would put the money toward paying off debt (Citizens, 2024). With the younger generations possessing great wealth, U.S. markets have the potential to greatly change.
Investments
Younger investors tend to have different investment strategies compared to their baby boomer counterparts. According to a survey conducted by Merrill Lynch, owned by the Bank of America, younger investors (between the ages of 21 and 42) are less confident in traditional investments. They believe that it is increasingly less possible to receive above-average returns on traditional stock and bond investments. These younger investors have stronger preferences toward private equity, private debt, and direct investments in promising companies than investors over the age of 43 (Merrill Lynch).
In addition to the findings on the type of investments, it is also clear that the younger investors are shifting their focus on sustainability in their investments and financial choices. Of the younger group of surveyed investors, 73% of them report that they already own sustainable assets, compared to only 26% of older investors. The movement of wealth from baby boomers, resulting in a large wealth gain within the 21-42 year-old demographic will likely result in large increases of investments in sustainable assets and the promotion of sustainable practices (Merrill Lynch).
Real Estate
Real estate, a consistently favored investment strategy across generations, will likely see less dramatic changes in investment during and after the Great Wealth Transfer. Both older and younger Americans consider real estate investments to be strong and stable growth opportunities that appreciate steadily over time. However, the wealth transfer will likely help Millennials in buying their first homes, as they’ve been lagging behind previous generations in home ownership. Both demand and supply of houses are looking at a potential increase as well. As potential buyers become wealthier, they are more likely able to afford a home and will demand them at a higher rate. Additionally, as younger generations inherit real estate – much of which they may hold as an investment rather than a place to live – there will be a greater supply of homes within the market. Assuming similar shifts in the supply and demand, home prices will see little variation but an increase in the volume of sales (Merrill Lynch).
Wealth Inequality
The Great Wealth Transfer will additionally exacerbate existing wealth inequality within the United States. With generational wealth amassing, creating large gaps in familial wealth between America’s richest and poorest households, additional endowments of assets from baby boomers will make the fortunate even more fortunate. In the United States, the wealthiest 10 percent of households are set to pass down the majority of wealth. A study conducted by the Resolution Foundation revealed that wealthier boomers are more than two times as likely to leave inheritances to their children than poorer Americans. Cross generational wealth inequalities could become further ingrained in American society, creating further division (Financial Times, 2024).
Charity
It is also forecasted that much of the money to be passed down is to go to a somewhat unexpected recipient – charities. It is expected that $18 trillion will be donated to meaningful charities before the year 2048 (Cerulli, 2024). Many baby boomers and older Americans have identified charities that align with their principles and goals, and have decided to contribute to the greater good of others, rather than focusing solely on upholding their familial wealth. Many boomers wish to provide enough wealth to make the lives of their children and grandchildren easier, but not to strip them of the chance to work hard, develop passions, and work towards ambitious goals.
The Great Wealth Transfer is an incredibly important period of American economic history. With trillions upon trillions of dollars worth of wealth changing ownership, the goals and needs of America’s younger generations could greatly impact the trajectory of the country’s economy. The U.S. could see prioritization of sustainable and ethical investments, the relieving of large sums of debts through student loan and mortgage repayments, booms in real estate sales and affordability, and money going to the hands of meaningful charities that are seeking to do good in the country. As much as the aging of the American population is sad, the future of the country, with wealth and power in the hands of younger generations, is bright and exciting. However, with the problems of wealth inequality, and the government’s need for funds, it will be interesting to see if federal policies will evolve to capture benefits from the flowing wealth.
References
Allainz. (2025). Financial assets: Surprising relief. Allainz. https://www.allianz.com/en/economic_research/insights/publications/allianz-global-wealth-report-2024/financial-assets-surprising-relief.html
Cerulli Anticipates $124 Trillion in Wealth Will Transfer Through 2048. (2024, December 5). Cerulli. https://www.cerulli.com/press-releases/cerulli-anticipates-124-trillion-in-wealth-will-transfer-through-2048
Guccione, J. (2021, May 13). Bundles of Hundred Dollar Bills. Pexels.
https://www.pexels.com/photo/bundles-of-hundred-dollar-bills-7904731
Haas, L. (2024, July 19). The ‘Great Wealth Transfer’: What is it and how can women make the most of it? World Economic Forum. https://www.weforum.org/stories/2024/07/women-inheritance-great-wealth-transfer/
Most Americans aren’t ready for the ‘Great Wealth Transfer’. (n.d.). Citizens. https://www.citizensbank.com/learning/great-wealth-transfer-survey.aspx
Reed, E. (2024, July 19). Wealth Distribution in the U.S. By Generation. smartasset. https://smartasset.com/financial-advisor/wealth-by-generation
The Great Wealth Transfer. (2024, December 27). Financial Times. https://www.ft.com/content/0512915b-92f5-4edb-bfa7-c5e61756260a
Will the ‘Great Wealth Transfer’ transform the markets? (n.d.). Merrill. https://www.ml.com/articles/great-wealth-transfer-impact.html