The $84 trillion Great Wealth Transfer set to take place over the next 10 years is expected to have a significant impact on various generations, with Generation X emerging as a major beneficiary. Contrary to popular belief, millennials and members of Generation Z may not be the primary recipients of inheritances from baby boomers, as previously thought. According to a recent study by Wealth-X, individuals in North America set to inherit fortunes worth $5 million or more are on average 46.1 years old, suggesting that members of Generation X will receive substantial windfalls in the near future.
Despite being sandwiched between the more vocal millennials and Generation Z, Generation X has been largely overlooked in discussions about inheritances and wealth transfers. While wealth management firms have been more focused on younger potential clients, the study highlights the wealth potential of Generation X, who fall between the ages of 44 and 59 currently. This generation is poised to inherit significant amounts from their parents in the coming years, making them a crucial demographic for wealth management firms, luxury companies, and real estate firms targeting wealthy clients.
The report reveals that inheritances will be highly concentrated at the top, with 1.2 million individuals worth $5 million or more expected to pass down over $31 trillion in wealth. What is particularly striking is that nearly two-thirds of this amount, 64%, will come from the ultra-wealthy individuals with net worths of $30 million or more. This means that a staggering $20 trillion will be inherited from just 155,000 people in the upper echelon of wealth. Additionally, the super-wealthy individuals with net worths of $100 million or more will account for almost half of the total wealth being transferred, indicating a significant wealth disparity.
As inheritances are passed down, there will likely be a shift in values and priorities among the recipients. Wealth managers, luxury firms, and philanthropies need to adapt to the changing landscape and cater to the unique needs and preferences of the inheritors. Millennials and Gen Z members are more likely to receive smaller sums as grandchildren, while Generation X will be the first in line to inherit substantial amounts from their wealthy parents. Understanding these generational differences is crucial for organizations looking to attract and retain clients in the midst of the Great Wealth Transfer.
The Great Wealth Transfer presents a tremendous opportunity for Generation X to secure significant inheritances from their parents. While millennials and Gen Z members have received much of the attention in discussions about future wealth transfers, it is essential not to overlook the wealth potential of Generation X. As wealth management firms and luxury companies shift their focus towards younger clients, they must consider the untapped market of Generation X individuals who are poised to inherit substantial amounts in the near future. By recognizing and adapting to the changing values and priorities of different generations, organizations can effectively navigate the complexities of the wealth transfer landscape and build lasting relationships with their clients.