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Boomer wealth transfer unlikely to boost Gen X, Millennials due to healthcare costs

In an era where financial security is uncertain for many, the expected generational wealth transfer from baby boomers to younger generations may not be the windfall some anticipate.

According to wealth management firm Cerulli Associates, baby boomers are projected to transfer approximately $53 trillion to their Gen X, millennial, and Gen Z heirs over the next 25 years.

However, the reality of this wealth transfer is complicated by the high costs of healthcare in later life, which is expected to significantly diminish the inheritances of many.

Finger Lakes Partners (Billboard)

While the narrative of a substantial inheritance is appealing, especially for younger generations grappling with economic challenges like student debt and the lingering effects of the Great Recession, the healthcare expenses of aging boomers are likely to absorb a large portion of this wealth.

The Cerulli study indicates that 68% of the transferred wealth will come from households with at least $1 million in investable assets, representing a small fraction of the total population.

This concentration of wealth means that the expected transfer will largely occur within already wealthy families, offering little relief to the majority.

Additionally, the escalating costs of healthcare, particularly in the later stages of life, are set to further reduce the potential benefits of this wealth transfer. These costs are so significant that they could deplete the savings of many boomers, leaving less for their heirs and raising concerns about the financial well-being of both the retiring and upcoming generations.



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