The ‘Great Wealth Transfer’ Is a Delusion

The Great Wealth Transfer sounds like a heist film or a game show. It’s neither.

It’s a (rather morbid) shorthand for the massive amount of money boomers are expected to leave to their millennial kids — making those adult children the “richest generation in history,” according to some headlines. This, we’re told, will help solve the student debt crisis; allow cash-strapped 30- and 40-somethings to finally get into the housing market; and even help them make up for lost time on saving for retirement. Thanks for the parting gift, Mom and Dad!

I don’t buy it.

“The typical boomer is not in a position to leave any money at all,” says Teresa Ghilarducci, a labor economist, one-time Bloomberg Opinion columnist and author of the new book, Work, Retire, Repeat: The Uncertainty of Retirement in the New Economy. Historically, about three out of four parents have intended to leave something to their kids, as she noted in a 2020 column. But according to data from the Federal Reserve, only about one out of four kids actually receive an inheritance — and the odds are even lower if you’re not White. Generous intentions run into hard math.

True, as a group, boomers are holding on to a huge sum — maybe as much as $90 trillion, or half the wealth in the country. So perhaps this time will be different. But I doubt it.

One thing distorting the averages: There are an awful lot of baby boomers. (The clue’s in the name.) They account for about 20% of the population, with people over 65 making up a bigger share of the US than at any point since the government began keeping track a century ago.