The great wealth transfer in the U.S. creates big opportunities with the next generations

Wealth Transfer Rises to $68 Trillion!

Wealth Transfer Rises to $68 Trillion!

by Bill High

The U.S. wealth transfer number has gone up.

As recently as early fall of 2018, the going number for the Great Wealth Transfer was $59 trillion by 2061. But the projected wealth transfer is now an unprecedented $68 trillion over the next 25 years, according to a Fox Business article that reports on a study by Cerulli Associates in Boston.

What does $68 trillion look like? A Kiplinger article from a few years back attempts to put $1 trillion into perspective in terms of buying power.


A few ways to spend $1 trillion

  1. You could buy nearly 42 million new carswith average sticker price of $23,000 with $1 trillion.
  2. A year’s salary ($55,300) for 18 million teachers—alternatively, $1 trillion would pay the salaries of America’s approximately 2 million elementary school teachers for 9 years.
  3. Lebron James under contract for 50,000 years at the price tag of $20 million per year.
  4. $12.9 billion of interest on a one-year CD at just 1.29% of interest.
  5. $1 million a day of spending for 3,000 years.

And all of those figures are for just $1 trillion. Multiply each of the above numbers by 68 to see how big the number is.


Giving it away?

Now, imagine if just 1% of that were given to Kingdom causes. It would yield $680 billion. To put that number in perspective, there are 150 Christian colleges in the U.S. and Canada. Even if we gave each of them a $1 billion dollar endowment, we’d still have $530 billion dollars left.

While the article accurately notes that much of that wealth transfer will become inherited wealth, it further notes that much of the transfer will likely be given to charity.

Millennials in particular will invest and give with the community in mind. They also may invest differently from their parents, giving greater weight to social responsibility.


Engage the wealth transfer generations

The implications are many.

Foundations and donor advised fund holders need to make sure that donor intent is documented and upheld.

Families should begin early in including the younger generation in giving decisions. Giving as a family is a great help in discovering and transferring the values that you want to pass on.

Advisors will need to embrace the relationship with the younger generation or risk losing clients as parents pass away and leave the reins to heirs.

Whether donor, heir, charity, or advisor, the message is clear: the time to plan is now.



Photo by Alex Iby on Unsplash

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Published April 26, 2019

Topics: Culture Commentary

GenerationsInheritanceWealth Transfer

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