Who Actually Wins the Great Wealth Transfer?

It's been billed as the greatest financial windfall in history, a tidal wave of wealth washing from the richest generation ever onto their heirs. But the reality is far more complicated.

Aptly named the great wealth transfer, it's the handoff that research firm Cerulli Associates projects will total $124 trillion through 2048, with $105 trillion flowing to heirs and $18 trillion donated to charity. That wealth is flowing from the aging silent generation and baby boomers down to their children and grandchildren.

Once you account for a few other factors, though, "great" may be better described as "just OK." Visa Business and Economic Insights argues the spendable transfer is actually closer to $36 trillion from boomers over 20 years, once you deduct things such as debt, taxes and retirement spending.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Whatever the true figure turns out to be, the $60-trillion-plus gap between the two estimates shows how slippery this forecast really is. And it points to a bigger truth: Not everyone stands to catch the same share of this falling wealth.

Here's a sharper picture of who actually benefits — or doesn't — and how your own situation compares.

To those who already have much, much will be given

If you come from a wealthy family, chances are you'll be among the biggest beneficiaries of the Great Wealth Transfer. Cerulli estimates that households worth $10 million or more — about 2% of all households — account for roughly half the entire transfer.

The averages reflect that skew. While the average U.S. inheritance is about $46,200, according to Federal Reserve data, the median is far lower, because a handful of enormous transfers pull the average up. The bottom half of recipients average around $9,700; the top 1% average about $719,000.

Ultimately, most people get nothing at all, as only about one in three Americans ever receives an inheritance. So, if you're not expecting one, then — congrats, I guess? — you're in the majority.

Millennials stand to get a greater share, but may have to wait

If you came of age watching Dawson's Creek or Buffy the Vampire Slayer, there's a good chance you're set for a larger slice of the transfer.

That's because Cerulli's research projects that millennials will inherit the most of any generation over 25 years — around $46 trillion. But it's those who grew up with MTV, Gen X, that will inherit the most in the next 10 years, with $14 trillion versus millennials' $8 trillion.

Those hoping for a windfall to cover a home down payment or help start a family may have to wait. Federal Reserve analysis finds inheritance receipt peaks around age 60 — a natural result of a typical lifespan near 80 and a roughly 20-year gap between parent and child.

However, the growing recognition that heirs often get the money when they least need it is nudging some families to pass wealth on sooner. More than four-in-five parents (82%) said they have given their adult children financial help since age 18, according to a new survey by Morning Consult commissioned by Kiplinger for our Trillion Dollar Talk campaign.

Popularized by figures like Bill Perkins, author of Die With Zero, the idea is to help while children still need it, rather than when they're nearing retirement themselves.

The transfer won't touch the racial wealth gap

If any single factor sorts the winners from everyone else, it's this one. As with nearly every measure of pay and net worth, there's a stark racial disparity here.

White households are about 2.8 times more likely than Black households to receive any inheritance at all. And when they do, they inherit roughly 5.3 times as much as Black households and 6.4 times as much as Hispanic households, according to Penn Wharton estimates. Around a third of white families ever inherit, versus roughly one in 10 Black families, according to a 2023 study by the Boston Fed.

The gap holds even among those expecting something. An Urban Institute analysis finds the median Black renter who anticipates an inheritance estimates it at about $48,000, compared with $200,000 for the median white renter.

The Federal Reserve Bank of Boston study found that lifetime earnings and pension assets — not bequests — explain most of the racial wealth gap, which is a big reason the coming transfer is unlikely to close it.

Women benefit from the transfer before the transfer

When it comes to which sex comes out ahead, it's women who are positioned to receive more than men. But there's a key caveat.

The first handoff is often horizontal, not generational. Cerulli projects that some $54 trillion will move between spouses before it ever reaches a younger generation, with nearly $40 trillion of that going to widowed women in the boomer and older cohorts, who tend to outlive their husbands.

For many women, then, the wealth transfer is less a true inheritance than a stretch of sole control over a shared nest egg, frequently while absorbing the very late-life costs that shrink what's left to pass on.

Not all the wealth is inheritable, or at least, easily inheritable

An important distinction rarely makes the headlines: Not everything older generations have accumulated can actually be passed down.

A traditional defined-benefit pension typically pays income for life and then stops at death, or continues at a reduced rate to a surviving spouse. It generally leaves no lump sum for the kids. A 401(k) or IRA, by contrast, is an asset heirs can inherit outright.

As a result, two retirees with identical incomes can leave very different estates. The one living comfortably on a generous pension may pass on little, while the one who saved that same income in a 401(k) leaves behind a balance. Through 1980, nearly 40% of Americans had a traditional pension. The long shift toward 401(k)s and IRAs since then has, paradoxically, made retirement wealth more inheritable.

Parents on the older edge of the boomer cohort or in the silent generation more often spent full careers under traditional pensions that leave nothing behind, while those on the younger edge came up saving in 401(k)s. So, whether there's a balance to inherit at all can hinge partly on where your parents fall within their own generation.

A large share of boomer wealth isn't liquid, either. It's home equity. Realtor.com found boomers hold about $19 trillion in real estate, and for many families the house is the single biggest asset. Unlike a brokerage account, which heirs can sell and split in a day, a house is a single, illiquid asset that usually can't be divided without selling it.

Some states will tax you more

Where you and your parents live shapes what heirs keep. Thirty-three states levy no estate or inheritance tax at all. Twelve states plus Washington, D.C., impose an estate tax (paid by the estate), and a handful — Kentucky, Nebraska, New Jersey, Pennsylvania and Maryland, which has both — levy an inheritance tax (paid by the person who receives the money).

The catch is the exemption. The federal estate-tax exemption sits at a lofty $15 million per person in 2026, but several states start far lower — $1 million in Oregon, $2 million in Massachusetts — low enough that an ordinary home plus retirement savings can trigger a bill. It's part of why Florida, Texas and Nevada, which levy neither tax, are such popular landing spots for retirees.

To the original savers may go the spoils

Ultimately, the ones who benefit most from all this wealth just might be the ones who saved and invested it in the first place.

Many boomers intend to spend it themselves. In a Charles Schwab survey of affluent boomers, 45% said they'd rather enjoy their money while they're alive than preserve it as an inheritance.

Longevity is the main driver, with healthcare acting as much the culprit as hedonism. Fidelity estimates the average 65-year-old will spend about $185,000 on healthcare in retirement before long-term care even enters the picture. Money once earmarked for the kids becomes money spent on aging.

And boomers are increasingly aging in place. One survey even found 68% live in homes at least three decades old, many overdue for renovation, and most in no rush to downsize. That points to wealth that's more likely to be used up than passed on — put toward renovations or drained by late-life care.

Whether you're a clear winner or loser or something in between, it might be best to treat any inheritance as a bonus rather than a foundation. And have the awkward family conversation, because nearly 30% of American parents have no formal estate plan, including a will, the Kiplinger/Morning Consult survey found. In the end, the winners won't necessarily be the ones who receive the most. They'll be the ones who planned ahead.

More Trillion Dollar Talk

• The Great Wealth Transfer Is Creating a New Generation of Family CFOs
• Could You Handle a Sudden Windfall?
• Manage an Inheritance Like a Pro in Just 7 Steps
• How to Organize Your Financial Paperwork for Your Heirs