Uncovering the Real Story: Why Boomer Wealth Transfer to Heirs May Be Shrinking

In the coming years, the number of Baby Boomers preparing to pass wealth to their heirs has risen. However, recent research indicates that the expected wealth transfer from these individuals may not be as large as originally estimated. According to a survey conducted by PricewaterhouseCoopers (PwC), Baby Boomers are expected to pass over $68 trillion in net wealth to their heirs. But while this amount is still far larger than any previous transfer of wealth, studies have revealed that a large portion of this amount will not be passed directly to the intended heirs. In fact, experts suggest that only around $30 trillion of that estimated $68 trillion will be transferred through inheritance. The other $38 trillion is expected to be used up or redirected to charity or other recipients. The reasons for this decreased expected transfer of wealth are largely due to changes in the economic landscape. For example, the rising cost of living, healthcare costs, and taxes, are all taking a larger portion of Boomer’s net worth than originally estimated. In addition, government regulations have placed a tax burden on Boomers that was not previously considered. And this combined with higher medical costs, have left many Boomers with fewer resources to pass to their heirs. And while some Boomers may still be able to pass on significant amounts of wealth, it may be in the form of nonfinancial assets, such as retirement accounts, real estate holdings, and other financial instruments, rather than a large lump sum. Furthermore, many Baby Boomers are now living longer than in previous generations. This means that while they may not be able to pass more wealth to their heirs, they will still need to be supported financially for a longer period of time post-retirement. The takeaway from this research is that while the Baby Boomer generation is still very wealthy, the wealth transfer to their heirs may not be as large as once expected. It is important to plan ahead and think strategically, as changes in the economy and government regulations may have an unexpected and significant impact on the amount of money to be passed on.