How many times have you read that a large percentage of baby boomers (as in more than 20 per cent) have exactly zero savings for retirement? I know I’ve seen that figure quoted in numerous articles. So, it may come as a surprise that, according to Fortune magazine, the average boomer has a worth of $1.2 million! That means a large chunk, perhaps 80 per cent of boomers, have been socking away the savings for retirement and to pass along to their offspring.
What’s going to happen to most of that dough? Good news for millennials…they are looking at a $68 trillion windfall by the year 2030. Some are calling it the greatest wealth transfer of modern times. Their current worth averages only $100,000. Millennials will end up being five times wealthier than they are today.
Sadly, much of the inherited wealth will end up in the hands of millennials who are relatively well-off. If you’re a struggling millennial, it’s likely that your boomer parents have struggled as well. The parents may run out of savings and be counting on their children for help, in which case there is no wealth transfer, but rather it may become a wealth drain for millennials.
Try to imagine you’re a millennial who has been through two recessions in your lifetime and grappled with trying to save for a home purchase, college expense for your children, and a retirement fund. Then you inherit a piece of that $68 trillion and your fortune(s) literally changes overnight. Experts warn that failure to fix the Social Security Trust fund before 2033 could put a major damper on this wealth transfer, so even millennials with well-off parents might be wise to not rely on a big payday falling into their laps.
What effect will this wealth transfer have on the lucky recipients? Will it change their outlook on life? Alter their ideals? No one knows or can predict the outcome. We boomers may not live long enough to see how it all turns out. Just one more outcome that’s beyond our grasp. Too bad. I just hate not knowing how the movie ends.
Jay Harrison is a writer and creative consultant for DesignConcept. You can also visit his author page here. His newest mystery novel, Rio Puerco Demise is available on Amazon. His first mystery novel, Head Above Water, is also available on Amazon. But that’s not all. You can also purchase the Best of BoomSpeak on Amazon.