Senior Spotlight: A Data Drop On Baby Boomers & ‘The Great Wealth Transfer’

Happy New Year! Our first Senior Spotlight of the New Year is here and based upon just-released articles from The Boston Globe and Business Insider with regards to Baby Boomer wealth. Both publications outline the benefits that this generation has seen economically in the post-World War II economy, notably declining tax rates on high income households, a strong stock market and double-digit gains (or more!) in home values.

With regards to wealth accumulation, a New York Times analysis of Federal Reserve data asserts that Boomers have held the most real estate wealth of any generation for the past two decades. Boomers held 44% of real estate wealth in 2021, with a peak share of 49% in 2011.

Other Numbers To Know:

| Baby Boomer average net worth is $1.2 million, which is almost double the net worth Americans had at retirement age twenty years ago.

| Baby Boomer median net worth is $206,000 (the large difference between the median and average net worth reveals what a wide spectrum of wealth exists; the highest net worth’s are pulling that average up, but the median figure tells you that not all Boomers are millionaires).

| Those born between 1946 and 1964 are expected to account for the biggest wealth transfer in history; by 2045 – older Americans are projected to give away $84.4 trillion to heirs & charities.

| 40% of the wealth will come from the wealthiest population, the 1.4% of households with assets over $5 million.

| Despite the vast wealth held by a small number of retirees, the typical Boomer over age 65 has just $58,035 in savings; in 2019 the Insured Retirement Institute conducted a survey which revealed that 45% of Baby Boomers had no savings (half of these individuals had savings at one time but had to cash it out for other needs prior to retirement age).

These are just a few of the eye-opening statistics that were revealed by The Boston Globe and Business Insider. We encourage you to read the articles in full to gain even more insights as to Boomer wealth distribution and the differences in financial security across the generation.

In summary, there is going to be a great wealth transfer in the next 25 years, however, the largest portion of this wealth is held by a small percentage of individuals. Wealth differences between Baby Boomers and their heirs are likely to create an even larger gap between income classes. The impact of the wealth on the economy as a whole will be largely driven by the values of the heirs - which could include causes such as flood & wildfire support, social injustice, environmental initiatives, educational reform and pharmaceutical discoveries.

While some challenges of retirement are going to be impacted by wealth (affording healthcare and hiring caregivers), there are some aging issues that all Americans will face. Labor and housing shortages could lead to challenges finding home caregivers, accessing long-term care and even receiving health services. Public policies and community programs will no doubt need to address the issues faced by a growing aging population.  

All my best,

Bobbi Decker
DRE#00607999

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