Millennials & Gen X to Gain $83.5 Trillion Inheritance, But Spouses First

The stage is set for a monumental wealth transfer over the next two decades, with Millennials and Generation X poised to inherit a staggering $83.5 trillion fortune.1 

However, this massive influx of wealth for younger generations won’t occur in one fell swoop. A huge portion of this financial windfall is destined to change hands beforehand, landing first in the wallets of a specific demographic—spouses.

Spouses as Initial Beneficiaries of $9 Trillion

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According to UBS’s Global Wealth Report 2024, a substantial portion of this wealth, currently held by the boomer generation, will be passed on within the next decade. This is due to the fact that individuals over 75, primarily from the boomer and postwar generations, currently possess about a fifth of the world’s total wealth.

UBS anticipates this wealth transfer to occur sooner rather than later, considering the average life expectancy falls between 82 and 86. Currently, the average age of those passing on their wealth is just over 84, with recipients averaging around 59 (Gen X).

In the next decade, this wealth will increasingly pass to younger generations, potentially making millennials the “wealthiest generation in history.”

“Horizontal” Wealth Transfer

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While inheritance is often seen as a downward transfer from older to younger generations, a horizontal element also exists. UBS notes that due to age differences between couples, one spouse often outlives the other. This means that for an average of four years, one individual typically inherits before passing it on.

UBS estimates that approximately $9 trillion of wealth will be transferred horizontally between spouses, with this trend being more pronounced in the Americas than anywhere else globally.

Primary Horizontal Beneficiaries

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In heterosexual married relationships, wives are statistically more likely to outlive their husbands and thus inherit their wealth. This is due to a combination of factors:

  • Life Expectancy: American women have an average life expectancy of 80.2 years compared to 74.8 years for men.(ref)
  • Age at Marriage: Women tend to marry at a younger age than men, averaging around 28 compared to 30 for men.(ref)

These factors contribute to the prediction that over 10% of the $83.5 trillion wealth transfer will be passed on by women.

More Millionaires on the Horizon

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The UBS report also notes positive news for consumers. Not only is climbing the wealth ladder easier than falling down it, but individuals across all income levels in the U.S. are expected to become wealthier.(ref) This upward trend in wealth is projected to result in a higher number of millionaires by the end of the decade, leading to even larger sums of wealth being passed on.

UBS predicts a 16% increase in the number of U.S. millionaires between 2023 and 2028, rising from just under 21 million to over 25.4 million. Notably, this wealth growth isn’t limited to millionaires; individuals across all asset levels are experiencing increased prosperity.

A More Equal Distribution of Wealth

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Inequality still persists in the U.S. According to the Income in the United States: 2022 report by the U.S. Census Bureau, real median household income in the U.S. experienced a decline, dropping 2.3% to $74,580 from 2021 to 2022.(ref)

However, individuals are now three times more likely to be classified as millionaires. This reality, coupled with the recent decline in median household income, presses the continued need for financial planning and responsible money management for all generations.

Source:

  1. Global Wealth Report 2024
Nancy Maffia » nancy
Nancy Maffia
Author & Editor |  + posts

Nancy received a bachelor’s in biology from Elmira College and a master’s degree in horticulture and communications from the University of Kentucky. Worked in plant taxonomy at the University of Florida and the L. H. Bailey Hortorium at Cornell University, and wrote and edited gardening books at Rodale Press in Emmaus, PA. Her interests are plant identification, gardening, hiking, and reading.