It is no secret that the generations of the Baby Boomers have made their fortune in the last several decades. But a new study suggests that wealth transfer from Baby Boomers to their heirs may not be as large as expected.
According to the study conducted by the Global Wealth Databook, the wealth belonging to members of the Baby Boomer generation is expected to transfer to their heirs at a smaller level than previously thought. This is mostly due to the fact that Baby Boomers have had more years of life expectancy than past generations, allowing them to accumulate more assets and become increasingly frugal with their spending.
Furthermore, the study suggests that due to the costly costs of aging and medical care, Baby Boomers are beginning to reduce their investments and spending levels, which in turn, shrinks the amount of money available for potential transfers to their heirs.
As a result, the study predicts that the wealth transfer from Baby Boomers to their heirs will be much less than what is commonly believed. That said, wealth accumulation of Baby Boomers will still be extremely valuable to their children, but in a different way.
Unlike generations past, the greatest gift that Baby Boomers are likely to leave their heirs with is not one of wealth, but rather a legacy of money management and financial independence. With this, Boomers’ heirs will be equipped with the skills to handle finances more responsibly and efficiently.
This is why it’s important for the heirs of Baby Boomers to learn the value of fiscal responsibility as early as possible. Not only will this help them to one day receive inheritance money, but it will also set them up for financial success throughout their life.
By analyzing the patterns of wealth transfer from Baby Boomer to their heirs, this study has provided a new insight into the potential impact of generational wealth. While it is unlikely that wealth transfer from this generation will be as large as predicted, there is hope that it will still leave a lasting impact on its heirs.
