Millions of US boomers are refusing to give their $84 trillion in real estate, wealth away to their adult kids — here’s why and what it means for the US economy

on to younger generations.

It's been called the Great Wealth Transfer, and many younger individuals are likely looking forward to being a part of it.

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It appears that younger Americans may not be in line for the significant inheritances they're anticipating.

About 45% of wealthy baby boomers, those with over $1 million in investments, plan to spend their money during their lifetime, whereas only about 15% of wealthy millennials and 11% of wealthy Gen-Xers share this intention, which could have significant economic effects.

Why Baby Boomers Are Holding onto Their Wealth

It's not a guarantee that their wealth will be inherited by their descendants.

Only about 22% of baby boomers plan to leave an inheritance to younger generations. Additionally, only 11% of boomers consider leaving a gift for their children or future generations to be their top financial priority.

Many baby boomers are showing a lack of concern about transferring their assets, with a staggering 40% having not even created a will. For 17% of this group, their hesitation stems from uncertainty about who they want to inherit their assets.

As the Financial Independence, Retire Early (FIRE) movement has gained momentum in recent years, so too has the "die with zero" philosophy, where people prefer to use up their wealth during their lifetime rather than leaving it behind.

Another reason baby boomers might not be thinking about leaving inheritances is that they're dealing with their own significant expenses.

Inflation has been steep in recent years, forcing many older Americans to raid their savings to a larger degree to keep up with their costs. And then there's health care and long-term care to consider.

About 70% of adults who live past the age of 65 are likely to need.

The median annual cost of assisted living is estimated to be around $64,200. For a private nursing home room, that number jumps to $116,800. It's possible that Baby Boomers' decision to spend down their assets may not be driven by a reluctance to share, but rather by the numerous expenses that often come with aging.

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The Baby Boomer generation's position could have significant repercussions.

It's fair to say that a significant number of baby boomers are likely to pass on their wealth to younger generations. However, if that number declines as boomer priorities and expenses change, it could have a profound impact on the financial security of millennials and Gen Z individuals.

Northwestern Mutual discovered that 32% of millennials and 38% of Gen-Zers expect to receive an inheritance. Additionally, 59% of millennials and 54% of Gen-Zers consider inheritance a crucial or extremely crucial factor in their financial stability.

With housing prices increasing rapidly, it's possible that a significant number of younger Americans will struggle to afford a home purchase without an inheritance to cover the down payment. This could lead to a significant widening of the wealth gap, as homeownership has traditionally been a key factor in building and maintaining personal wealth and financial stability.

Younger Americans may also face challenges in retiring comfortably without receiving an inheritance to help them start saving for their retirement.

In the United States, the average student loan debt for Americans under 35 was approximately $19,000, whereas it was about $45,000 for individuals between the ages of 35 and 44.

Many millennials and members of Gen-Z are struggling with student loan debt, which is making it difficult for them to save for their retirement or buy a home. They may be in for a surprise if they're counting on inheritances to improve their financial situation, which may not materialize.

It's discovered that 35% of Americans intend not to bring up the topic of wealth transfer with their families.

Not having these conversations could have serious consequences for many younger people's financial futures, and also lead to family conflicts. So, having open and honest discussions about inheritances is really the best approach for everyone.

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This article is intended for informational purposes only and should not be taken as advice. It is provided without any guarantee of its accuracy or reliability.