A useless story about inheritances

“Generation X stands to gain the most from the $84 trillion wealth transfer,” an NBC News headline blared on Tuesday, June 18, 2024.

The story (read it here) begins, “Generation X may be the biggest beneficiary from the $84 trillion Great Wealth Transfer in the next 10 years, according to a new study.” Yeah, well, that’s what you’d expect because Baby Boomers are now the senior generation and Gen Xers are their children.

As you read the article, it becomes increasingly useless, because nothing has changed: A few people still have most of the money, and unless your family is wealthy, you’re reading about “trust fund babies” from the outside looking in — just as most Baby Boomers did in their youth and middle age.

Let me bring up an anecdote. Years ago, I was driving on a two-lane highway stuck behind a huge expensive-looking RV with a bumper sticker that said, “We’re traveling on our kids’ inheritance.” Although meant as a joke, it probably wasn’t. They literally were.

As this bumper sticker points out, the only inheritance that matters is yours. Boomers acquired a reputation for being self-indulgent and selfish; whether that’s true or not, the only parents that matter are yours. But lacking that information, I necessarily have to write here in terms of generalities.

If you’re a typical Gen Xer, with typical Boomer parents, the “Great Wealth Transfer” probably will look pretty modest to you. Many Boomers were lousy savers, some have nothing but Social Security because by their generation pensions were gone, many are ill-prepared for retirement and may outlive their finances, and they’re living longer which means less money left over to transfer to their descendants.

What does a typical Boomer’s estate look like? According to Business Insider, as of 2022 a typical Boomer had “a median net worth of $206,700” (see story here). Even if a Gen Xer is an only child, today that inheritance won’t even buy a starter home. And with pensions now almost extinct, and the prospect of Social Security cuts in the future, they’d better sock it away in retirement accounts.

The bottom line is the 5 minutes it takes to read the NBC article about the “$84 trillion wealth transfer” is, for most people, a wasted 5 minutes, because that’s other people the article is talking about.

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