Latest news with #GreatWealthTransfer
Forbes
2 days ago
- Business
- Forbes
The Great Wealth Transfer: 6 Reasons Why It Might Fall Short
The Great Wealth Transfer numbers are staggering. Estimates suggest that over $124 trillion is poised to change hands as Baby Boomers transfer their wealth to the next generation. But will this so-called Great Wealth Transfer really deliver the promised windfall? Well into their 60s, Bill and Lori always believed that when the time came, they would leave an inheritance to their children. Nothing extravagant—just a modest suburban home and savings accumulated over a lifetime. For their children, Diane and Adam, it provided quiet reassurance, a mental safety net they never fully depended on but always considered part of their future. (Names and identifying details have been changed to protect the privacy of individuals.) But life has a way of rewriting plans and good intentions. Bill's arthritis and early dementia have resulted in new, unexpected costs. Lori, still energetic but facing her own health challenges, is paying for in-home aides and long-overdue roof repairs. She has also decided it's finally time for that trip to Italy they've been talking about for decades. Diane and Adam understand and are glad to see their parents making the most of their retirement—yet they realize that the inheritance they once quietly anticipated may not be as certain as they had hoped. Their story isn't unique. It's the untold side of the much-discussed Great Wealth Transfer, the historic shift of trillions of dollars primarily from aging Baby Boomers to Millennials and Gen Z. The numbers—like Diane and Adam's once-predictable inheritance—don't lie, but they obscure the very real ways in which longevity, rising healthcare costs, changing family dynamics, and shifting priorities may rewrite how, when, and how much this transfer will occur. This is an untold yet unfolding story within the longevity economy. It's easy to get swept up in the headline numbers: trillions of dollars poised to change hands, a once-in-a-generation economic boost. However, as one family's experience illustrates, the story of the Great Wealth Transfer is far more complex. It's a story of longer lives, unplanned events, evolving priorities, rising costs, and the reality that financial security for one generation doesn't necessarily translate to a great handoff to the next. To understand how the Great Wealth Transfer may unfold—and why it might not be quite as 'great' as the headlines promise—we need to look at six overlooked factors shaping this massive shift of wealth. Estimates from Cerulli Associates suggest that around $124 trillion will be transferred by 2048, with nearly $100 trillion originating from Baby Boomers and older generations. Yet, over 50% of that wealth will come from high-net-worth and ultra-high-net-worth households, which make up just 2% of all families. For most younger Americans, this expected transfer may never happen because it simply isn't there. Even among families who do stand to inherit, the rising cost of healthcare is quietly eroding those assets. Fidelity estimates a 65-year-old couple today will need about $330,000 for medical expenses in retirement—excluding long-term care costs. These expenses often arrive when people least expect them: a sudden hospitalization, a chronic illness that requires ongoing care, or simply the steady rise in insurance premiums as we age. This reality is especially pronounced for women, who often outlive their husbands by years or even decades. For many, this second retirement involves managing rising healthcare costs alone—sometimes for a decade or more after their spouse's passing. What was once a couple's shared plan for an inheritance or a family legacy can become a widow's quiet struggle to pay for her care and maintain her independence. These later-life expenses can turn what was once considered a predictable inheritance into a financial safety net redirected to the daily demands of living longer. Dementia poses a significant and often overlooked threat to the anticipated Great Wealth Transfer. A report by my MIT AgeLab colleague Luke Yoquinto and our AARP partners, Karen Kali and Julie Miller, indicates that financial missteps—such as missed bill payments, risky investments, and susceptibility to scams—can occur years before a formal dementia diagnosis, leading to substantial wealth loss and eroding savings that may have been intended for a planned inheritance. Moreover, the costs associated with long-term care for individuals with dementia can devastate a family's savings. This financial strain not only depletes the assets meant for inheritance but also places a heavy burden on family members, who often take on caregiving responsibilities, further impacting their own financial stability and retirement plans. Much of the wealth held by Baby Boomers is tied up in real estate. Most are suburban homes that may not align with the lifestyles or housing needs of younger generations. Baby Boomers are remaining in these homes longer and often neglect necessary upkeep. A Business Insider article noted that many of these homes are filled with stuff that will take time and money to sort out—resulting in a real estate legacy that can feel more like a liability than a gift. For children inheriting a house in an aging suburb, the financial and emotional costs can be significant—particularly in a dynamic mortgage interest rate environment. Decisions about whether to sell, rent, or renovate become complex, especially if the property requires maintenance or if multiple family heirs are involved. The traditional notion of passing on a legacy is evolving. For many Boomers, the dream isn't to leave it all behind for their kids, but to enjoy it while they can. A significant number are prioritizing travel, experiences, and home upgrades over saving every last dollar for inheritance. A Charles Schwab study reports that nearly all wealthy Americans intend to leave an inheritance. However, 21% of Baby Boomers prefer a strategy of giving while living, such as creating memories through family travel and assisting adult children with home buying. Perhaps most striking is that a full 45% of Baby Boomers agreed with the statement, 'I want to enjoy my money for myself while I am still alive.' Not all families stay close. Being in what has become popularly known as 'no contact' may be quietly on the rise. One in four (27%) Americans report being estranged from a parent, child, sibling, or grandparent. These deep rifts can completely disrupt inheritance plans. Estrangement also brings up uncomfortable questions: What happens to the family home if no one wants it—or if no one is willing to talk? How does the money pass when there's no relationship? These quiet divides can turn even the most generous inheritance plans into a source of confusion and potential conflict. Thanks to increasing longevity and advancements in healthcare, inheritances are often arriving later in life than many younger generations might expect. This delay means that younger Gen Xers and Millennials, who may have already navigated significant financial milestones—like buying a home or sending kids to college—without that anticipated boost, may find inheritances to be more symbolic than transformative. For women, this extended lifespan can complicate matters further. A decade or more of living in solo retirement often leads to a different relationship with adult children and a shifting perspective on what a financial legacy truly means. Plans made as a couple may change as one partner—typically the woman—navigates the final chapter alone, balancing her own needs with the opportunity to pass something on. The numbers around the Great Wealth Transfer are extraordinary, but they fuel a headline that overshadows the underlying story: this is not just a story of dollars, but of decades of longer life, evolving family ties, and the very human decisions about what it means to live well and leave well. In the end, the Great Wealth Transfer will not be measured by bank balances, but by how families navigate these hidden complexities—balancing care, connection, communication, purpose, and legacy in a world where living longer means living differently.
Yahoo
4 days ago
- Business
- Yahoo
My mom died and left me 10 times as much as I expected, and I'm a little lost on how best to manage it
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. In the next 20 years, Americans will inherit an estimated $72 trillion as boomers pass down their accumulated wealth to younger generations in a phenomenon dubbed the Great Wealth Transfer. That means there will be a lot of people like you who are surprised — even if pleasantly so — to be inheriting money and unsure about how best to manage it. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how BlackRock CEO Larry Fink has an important message for the next wave of American retirees — here's how he says you can best weather the US retirement crisis Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) This problem stems from a lack of communication around estate planning. A 2024 Edward Jones report found that more than one in three Americans have no plans to talk about their estate with their families, even though 48% plan to leave an inheritance. You were unprepared for this windfall, but it's good to be thoughtful about how you're going to manage the money going forward so you don't waste this opportunity to improve your life now and in the future. Here are some options to explore. If you've inherited a large sum of money, one thing you could do is to put it into an investment portfolio that's earmarked for retirement. A 2024 CNBC survey found that 40% of Americans are behind on retirement planning and savings, while 21% of current retirees have no savings at all to live on. You don't want to rely on Social Security in retirement, because those benefits only replace 40% of your paycheck if you're an average earner. Plus there's a possibility of Social Security cuts in the not-so-distant future. Investing your inheritance now could give you greater retirement security, and help you build a legacy for future generations. It's important to maintain a diverse mix of assets in your portfolio. If you're years away from retirement, you might keep the bulk of your portfolio in stocks and a smaller portion in bonds. For instant diversification, consider investing in S&P 500 index funds, giving you exposure to the 500 largest publicly traded companies. For the bond portion of your portfolio, consider a mix of corporate bonds, Treasuries, and municipal bonds for tax diversification. However, diversifying outside of the stock market is equally critical, especially given its recent volatility. Investing in commodities like gold can help stabilize your portfolio and ensure your retirement fund continues to grow. A gold IRA is one option for building up your retirement fund with an inflation-hedging asset. Opening a gold IRA with the help of industry leader Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA. Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver. If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today. Another way to diversify is to invest in real estate. New investing platforms are making it easier than ever to tap into this market. For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors. With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property. With risk-adjusted internal returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets. If you're not an accredited investor, crowdfunding platforms like Arrived allow you to enter the real estate market for as little as $100. Arrived offers you access to shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted for their appreciation and income potential. Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part. Read more: You're probably already overpaying for this 1 'must-have' expense — and thanks to Trump's tariffs, your monthly bill could soar even higher. There's nothing wrong with using proceeds from an inheritance to improve your life and that of your family — right now. So think about your most pressing needs. If you're living in cramped quarters, you might use some of your money to finish off your home's basement for extra living space. Or you could buy a larger home. You can also invest in your children's education. A December 2023 Discover survey found that 70% of parents are worried about not having enough funds to cover their children's education. You could put some of your inheritance into a 529 plan toward your children's college education, allowing it to grow tax-free. Whenever your financial situation changes substantively, it's a good idea to consult a professional. A financial advisor can guide you through some of the best ways to invest your inheritance to meet your goals — and advise you on tax and legal implications. For example, income from certain assets could bump you into a higher tax bracket. An inherited IRA might be subject to the 10-year rule, meaning you have to withdraw all the funds within 10 years of the original account owner's death. You can learn more about the unique rules and opportunities your new financial situation will entail with a professional advisor found on This online platform connects you with vetted financial advisors best suited to help you develop a plan for your new wealth. Just answer a few quick questions about yourself and your finances and the platform will match you with an experienced financial professional. You can view their profile, read past client reviews, and schedule an initial consultation for free with no obligation to hire. With that kind of guidance, your surprise inheritance might additionally surprise you in all the ways it can multiply abundance in your life. Access to this $22.5 trillion asset class has traditionally been limited to elite investors — until now. Here's how to become the landlord of Walmart or Whole Foods without lifting a finger Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Are you rich enough to join the top 1%? Here's the net worth you need to rank among America's wealthiest — plus a few strategies to build that first-class portfolio This article provides information only and should not be construed as advice. It is provided without warranty of any kind. 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Business Times
23-05-2025
- Business
- Business Times
The overlooked significance of spousal wealth transfer
WHEN it comes to wealth transfer, most of the attention is placed on intergenerational flow of assets – grandparents to their children or grandchildren, for example. This is famously termed the 'Great Wealth Transfer'. However, a crucial interim step and form of wealth transfer is often overlooked: the horizontal inter-spousal transfer. In the US, between 2024 and 2048, a staggering US$54 trillion are expected to first be passed between spouses before being passed on to other generations. Of that amount, 95 per cent will go to women. This massive transfer of assets will play a powerful role in reshaping the global financial landscape, influencing wealth preservation strategies, succession planning and investment trends worldwide. For ultra-high-net-worth (UHNW) individuals, estate planning is no longer just about ensuring smooth succession for future generations. It must also include securing the financial stability of the surviving spouse, particularly when they may not have been the primary financial decision-maker. A quiet but powerful shift A key driver behind the rise in spousal transfer, especially to women, is demographic: Women, on average, outlive men by an average of five years globally. In East and Central Asia, the gap is even wider. This means inheritance will often go to the surviving widow before reaching the next generation. As a result, women in Asia are increasingly accumulating wealth and taking greater control over financial decision-making. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Yet, despite its scale and inevitability, horizontal wealth transfer is often poorly planned, highly emotional and riddled with vulnerabilities. Shockingly, in the US, 70 per cent of widows change financial advisers within a year of their spouse's passing, highlighting a significant gap in continuity and preparedness. In many cases, the issue is relational. Women are more likely to switch advisers if they do not feel a sense of personal connection or trust, underscoring the need for deeper, more empathetic engagement long before a transition occurs. It's time we change that. Across Asia, where multi-generational family businesses are common, the transfer of wealth often prompts deeper structural shifts. According to McKinsey & Company's Asia-Pacific's Family Office Boom, an estimated US$5.8 trillion in intergenerational wealth are expected to be transferred among high-net-worth (HNW) and UHNW families. However, many are unprepared for this transition, leading to avoidable financial stress, particularly during the emotionally difficult period following the loss of a family member. The problem isn't the money, it's the strategy behind it. Strategies to safeguard horizontal wealth transfer 1. Early, inclusive planning Many UHNW families in Asia still operate under traditional wealth dynamics, where the husband often takes the lead in investment decisions. Without active engagement, a widow often lacks the confidence or relationships needed to manage inherited wealth effectively. To avoid this, financial advisory firms must involve both spouses equally in financial decision-making and offer tailored solutions that ensure continuity and confidence in wealth management. 2. Integrating risk management in wealth transition Beyond asset allocation and succession planning, UHNW families should integrate life insurance solutions in their wealth transfer and preservation process. As a strategic risk management tool, life insurance can mitigate financial risks associated with wealth transfer by providing immediate liquidity for debts and taxes, creating a financial safety net for the surviving spouse, preserving asset control and avoid shareholding dilution. 3. Establishing flexible trust structures Trusts have long been a preferred vehicle for preserving wealth across generations, but they must also be structured to provide the surviving spouse with sufficient control, while ensuring long-term asset protection. Flexible trust arrangements allow for income distribution, philanthropic pursuits and access to liquidity, ensuring that the surviving spouse can sustain their lifestyle while preserving family wealth for the next generation. While the 'Great Wealth Transfer' has long been viewed as a single vertical flow, the horizontal phase between spouses is increasingly recognised as pivotal. UHNW families in Asia must be prepared to navigate both the horizontal and vertical transitions strategically. Early, structured engagement with spouses, an empathetic advisory approach, and clear family governance can ease the path, preserving wealth stability and enabling UHNW families' legacies to withstand generations. The future of wealth management is not just about preparing for the next generation, it starts with protecting the present. The writer is CEO of Singapore and Malaysia, Howden Private Wealth
Forbes
22-05-2025
- Business
- Forbes
Backroads Creates New Adventure Trips For Millennials And Gen Zers
Backroads' new 30s & 40s collection Backroads, which calls itself the world's #1 active travel company, is known for its walking, biking, and multi-adventure trips all over the globe. Now it's appealing to millennials and Gen Zers with a new offering of 34 trips and more than 70 departures designed for travelers in their 30s and 40s. The company's new 30s & 40s collection is based on some of Backroads' best itineraries. It includes a Dolomites Walking & Hiking Tour, a Peru Lodge-to-Lodge Trekking, and a Berlin to Prague Bike Tour. What makes these trips different is fresh energy and the company of active travelers at a similar younger life stage. 'There was an opportunity out there to create a segment of trips with guests at a similar stage of life in their 30s and 40s.' 'We saw a huge gap in the market in terms of luxury group travel and active travel trips for guests in their 30s and 40s,' Avery Hale Smith, Backroads' Chief Experience Officer, said in an interview. Smith, who's spearheading this launch, added that 'a lot of the companies out there who do focus on millennials are focusing on either extreme sports or maybe budget trips or just solo travelers. Nobody is really doing it in the way Backroads is doing it,' Backroads' new 30s & 40s Collection The way Backroads does it is offering active travel – walking, biking, and multi-adventures –mixed with various levels of luxury, carefully planned itineraries, well-trained and enthusiastic trip leaders, memorable hotels, a focus on food and wine, and a wide range of destinations worldwide. Backroads was groundbreaking when they began segmenting their trips years ago, offering Classic trips designed for couples, friends, and solos, and then classifying family trips by children's age groups. In 2023, they launched Women's Adventures. Now they've targeted younger travelers with the same approach. Backroads' new 30s & 40s Collection 'There was an opportunity out there to create a segment of trips with guests at a similar stage of life in their 30s and 40s,' Smith said, 'and we had seen so much success with our age-segmented trips in the past. There is sort of a shared experience when you are of the same age category or bracket that leads to that greater sense of connection, and we think that this will be a huge part of the experience.' 'We are coming into the largest wealth transfer in history,' Smith said, referring to the Great Wealth Transfer, where $27 trillion is expected to pass from boomers to their offspring by 2045. 'Millennials are starting to really prioritize experiences and experiential travel. They are willing to spend money on travel more than the past generation.' These trips are also an opportunity to jump on a transforming world, as generations shift. 'We are coming into the largest wealth transfer in history,' Smith said, referring to the Great Wealth Transfer, where $27 trillion is expected to pass from boomers to their offspring by 2045. 'Millennials are starting to really prioritize experiences and experiential travel. They are willing to spend money on travel more than the past generation, and so we really want to be able to take advantage of that and meet the demand with these trips.' The '30's & 40's collection is based on Backroads Classic Trips. While they are not physically more challenging, 'we did curate this collection of itineraries in a way that we think will cater most to what in our 30s and 40s are looking for,' Smith noted. From our own market research and the guest feedback that we've gotten, there are a few themes that rise to the top in terms of what people are looking for.' Backroads' new 30s & 40s Collection Smith says that 'bucket list destinations, and off the beaten path locations, deep authenticity and cultural immersion in terms of meals and food' are important. Less so are Michelin-star experiences. Instead, she said it will likely be 'farm to table or hidden gem locations that we think might resonate better with this demographic.' Other trips that are part of the 30s & 40s collection are Canadian Rockies Heli-Hiking Tour, Vietnam & Cambodia Bike Tour, A Taste of Camino de Santiago Walking & Hiking Tour, and Alaska's Glaciers & Coast Multi-Adventure Tour. 'One of the great things about these trips is that so many of our trip leaders are within this demographic themselves,' Smith said. 'They play a really integral role in the Backroads trip experience on all of our trips, but we expect that they're actually going to enhance the trip experience of these 30s and 40s even more so can really speak to the vision behind it, including how Backroads is evolving with the next generation of adventurous travelers.' Visit the Backroads 30s & 40s collection.
Yahoo
21-05-2025
- Business
- Yahoo
The Best Stocks to Invest $50,000 in Right Now
Visa processes around 234 billion transactions per year. Robinhood is growing fast, and is popular with younger investors. The fundamentals of Meta Platforms are impossible to ignore. 10 stocks we like better than Visa › Building a stock portfolio from scratch can be a challenge. There are thousands of stocks to choose from, and most of them won't outperform the major stock market indexes. However, by choosing a diversified set of stocks with solid fundamentals, savvy investors can build a portfolio that not only survives but thrives. Below, I'll discuss how I would construct a hypothetical portfolio today if I had $50,000 to invest. To get things started, I'm turning to Visa (NYSE: V). The company's business model is one of my favorites within the entire stock market because of its simplicity and asset-light nature. Moreover, it benefits from an enormous network effect that keeps growing stronger every year. Visa partners with card-issuing institutions (e.g., banks and credit unions). Those institutions provide debit and credit cards to their members, and the cards are used to perform transactions across Visa's payment network. In exchange for access to the payment network, the company collects fees on each transaction, which is how it generates the bulk of its $37 billion in annual revenue. All told, it processes around 234 billion transactions per year with a staggering value of $16 trillion. For comparison, that value of transactions is roughly equal to the entire gross domestic product (GDP) of either China or the European Union. For my hypothetical portfolio, I'll allocate $20,000, or 40%, to this stalwart of the financial industry. The online brokerage industry is nothing new. Investors have been able to place orders and track investments there for at least 30 years now. However, Robinhood (NASDAQ: HOOD) is by far the fastest-growing major brokerage firm. According to research by The Motley Fool, Robinhood ranks ninth in assets under management (AUM), with around $100 billion, as of the end of 2023. It easily takes first place when it comes to the speed at which it's growing its AUM. As of the end of 2023, its AUM growth rate stood at 96%, blowing away its next closest competitor, Ally Financial, with 47% growth. Much of this is due to Robinhood's popularity among younger investors, who are drawn to the company's focus on crypto, futures, and live-event trading. Moreover, the company looks well placed to benefit from the Great Wealth Transfer, as trillions of dollars in investment-related accounts pass from baby boomers to their heirs. For my hypothetical portfolio, I'll allocate $5,000, or 10%, to Robinhood. Lastly, there's Meta Platforms (NASDAQ: META). Simply put, Meta's fundamentals are too good to ignore. For example, over the last 12 months, here are some of the key figures the company has reported: $170 billion in revenue $67 billion in net income $52 billion in free cash flow Over the last five years, those figures increased by 127%, 183%, and 178%, respectively. By comparison, Home Depot, which generates roughly the same amount of annual revenue as Meta, grew revenue and net income by only 34% and 25%, respectively. Home Depot's free cash flow also fell by 7% over the last five years. Meta's fundamentals are growing shockingly fast for a company of its size. That's the power of scale, and it's a power that Meta wields, thanks to its global user base. The company has nearly 3.5 billion daily active users, so it can generate a staggering amount of advertising revenue. Furthermore, buy-and-hold investors should be rewarded for years to come, thanks to the company's strong free cash flow and fortress balance sheet. Although Meta only pays a meager dividend right now, the company will likely gradually increase it over the long run. For my hypothetical portfolio, I'll allocate $25,000, or 50%, to Meta to round out my $50,000 investment pool. Before you buy stock in Visa, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Visa wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Ally is an advertising partner of Motley Fool Money. Jake Lerch has positions in Visa and has the following options: long January 2026 $30 calls on Robinhood Markets. The Motley Fool has positions in and recommends Home Depot, Meta Platforms, and Visa. The Motley Fool has a disclosure policy. The Best Stocks to Invest $50,000 in Right Now was originally published by The Motley Fool
