When Baby Boomers started to reach retirement age in the 21st century, many thought the wealth transfer from them to their children and grandchildren would be huge. But, in recent years, it has become clear that Boomers may not be able to transfer nearly as much wealth to their heirs as expected.
The reason for this is simple: the amount of wealth Baby Boomers have accumulated is often not enough to cover their own expenses in retirement and leave anything significant behind for their heirs. Many Baby Boomers have not saved enough to have any money left over after retirement. And, with the rising cost of healthcare, housing, and other items, retirees often find they need to dip into their wealth to get through life after retirement.
Also, Boomer wealth is often tied to their homes, which they do not inherit, and investments that may not return as much as predicted. With the stock market being volatile over the past few years, Boomers have seen their investments take a hit, likely leaving little to nothing behind.
The high cost of college tuition has also led to fewer Boomers leaving money for their children’s educations. Instead, student loans and grants become the main source of funding for college, leaving Boomers with little inheritance for their heirs.
Ultimately, when one looks at the facts, there is an understanding that the wealth transfer from Boomers to their heirs will not be as large as expected. With retirees having to use their own wealth to support themselves, high costs of tuition, and investments taking a hit, it is likely that Boomers will not have much money left over to pass on their children.
