Wealth Transfer Will Boost Richest Families Most
(Bloomberg) — An unprecedented wealth shift in the coming decades could disproportionately benefit America’s wealthiest families, boosting their fortunes by trillions of dollars, according to a report. July report From Visa Inc.
Three-quarters of what baby boomers are expected to inherit are in the top 10% of household net worth, the report found.
“This is far from a broad distribution of wealth,” the report said. “These transfers will be highly uneven, entrenching pockets of prosperity and quietly shaping who benefits most — and how much of the fallout from this windfall will ultimately be seen in spending rather than savings.”
High-income households are less likely to use their inheritances immediately than wealthier ones, meaning more money goes into savings, investments and property purchases, he said. Visa business and economic understanding Analysis. This shift is expected to create new opportunities for banks, wealth managers and other financial organizations, the report said.
Read more: Billionaires are fighting for control of heirs from beyond the grave.
The expected “great wealth transfer” – billed as the largest in history, with $93 trillion in assets changing hands – may be less dramatic than the headlines, according to a Visa analysis. After accounting for liabilities, pension costs, charitable donations, taxes and fees, the report estimates that less than 40 percent of wealth, or about $36 trillion, will ultimately be passed on to younger generations. That comes to $515,000 per inherited family. The analysis excludes the wealthiest 1% of households, whose spending patterns differ significantly from the general population.
Ultimately, Gen Z and millennial families are expected to spend about $8 trillion on transportation, housing, travel and retail, among other categories, with inherited wealth, Visa said.
Some of that transfer is already underway, with grandparents helping to finance house payments and family vacations, the report said.
