Each generation has its own unique financial concerns, and the coming transfer of wealth from Baby Boomers to their heirs is no different. With the Baby Boomers now aged 59-77, the transfer of wealth from their estates to their heirs has become an increasingly hot topic.
For years, there has been much speculation about how much money would be transferring from these estates, with some estimates claiming it could be almost a quarter of the total wealth in America. However, recent research is now suggesting that this sum might not be as big as was originally anticipated.
For starters, Baby Boomers have scaled back their giving to their heirs as they age. This is due to their increasing financial responsibility for healthcare costs and day-to-day living expenses. There are also an increasing number of Boomers entering retirement with significant debt, which will reduce the amount of money left to their heirs.
Furthermore, as the number of Baby Boomers opting for long-term care rises, so too does the money they pay for this service. This can significantly reduce their estate before it has even been transferred to their heirs.
Finally, the cost of housing and real estate has increased dramatically since the Boomer generation grew older. As a result, the actual value of the properties they own might not be as high as it was when purchased, which means there might not be as much money to go around when the estates are eventually transferred.
To put it simply, the Baby Boomer wealth transfer might not be as big as was originally thought. This doesn’t mean that Boomers aren’t wealthy; merely that their heirs might not get as big a share of the wealth as originally anticipated.