The transfer of wealth from one generation to the next is a complex, multi-layered, emotional event. Parents who worked hard over the course of many decades will one day face their mortality and need to determine what they’ll do with their money.
Since you can’t take it with you when you’re dead and buried, the Baby Boomer generation is in the time of their lives when they must start preparing for how much money they need to survive and thrive in the sunset years of their lives and how much they will leave to their children.
According to a recent report by global real estate consultancy Knight Frank, $90 trillion in assets will be transferred between generations in the United States over the next 20 years. This shift will make Millennials—and to a lesser extent, Generation-Z —the wealthiest generation in American history.
What Will Happen To Millennials?
The potentially great wealth handover will likely have reverberations in the job market, economy, real estate and lifestyles of the recipients of this largess. Millennials, who are contending with credit card debt, burdensome student loan repayments and the challenges of affording a new home and having children, may see their fortunes change almost overnight.
This newfound wealth will offer financial security to Millennials. The influx of funds will open doors toward homeownership, debt-free living and having sufficient resources to take career risks.
When a person isn’t bogged down by debt, they have more options when it comes to career pursuits. If you don’t have a nest egg, you’ll most likely stay in a job that you hate because you cannot afford to lose your health benefits or have long gaps in employment.
With a lofty inheritance, Millennials can approach the job market differently. Instead of chasing dollars to make ends meet, they will have the luxury of pursuing opportunities that offer meaning and purpose that fulfill social causes. They can decide to leave the corporate rat race and build their own business as a budding entrepreneur. Some may elect to take a sabbatical and enjoy a long break after working hard for many years.
The transfer of wealth is expected to make Millennials five times richer by 2030 than they were in 2019. They will also have the option of choosing an early retirement. However, their inheritance may not have as much longevity, when you factor in inflation and the high costs of living, compared to their parents’ generation.
Source: Forbes
