Boomers on Lockdown: The $84 Trillion Wealth Transfer on Hold

For years, millennials and Gen Xers have been anticipating the “Great Wealth Transfer.” With baby boomers holding an estimated $84 trillion in wealth, including $17 trillion in home equity, experts forecasted a significant generational shift in assets. However, it turns out many boomers are far from ready to part with their money and properties.

A new survey from Charles Schwab found that 45% of boomers want to "enjoy my money for myself while I’m still alive." This puts a significant delay on the projected inheritance timeline, stretching wealth transfers to potentially another 20 to 25 years.

Why Baby Boomers Are Holding On

Economic shifts over the past decade, coupled with increased healthcare costs and life expectancy, are causing boomers to rethink giving away assets early. Many need their wealth to support their extended retirement. Research from Edward Jones reveals that boomers plan to distribute only around 40% of their wealth while alive, leaving the majority to be passed posthumously.

Real Estate: The Future Inheritance Battleground

Boomer homeowners still plan to eventually pass their real estate assets to their children. In a 2024 Freddie Mac survey, three out of four boomers expressed their intent to leave their homes or the sale proceeds to their heirs. However, this won't happen immediately, with experts estimating a gradual decline in boomer-owned homes over the next decade—from 32 million in 2022 to 23 million by 2035.

The Generational Divide on Wealth Transfer

Interestingly, the mindset toward wealth distribution differs between generations. According to Schwab, younger generations—millennials and Gen Xers—are more inclined to share wealth while alive. Financial planners like Michelle Crumm emphasize the importance of early transfers, noting that “it’s the 20- and 30-year-olds who need it the most.”

In contrast, the upcoming Gen Z and Gen Alpha generations may adopt entirely different approaches to legacy planning. Schwab's findings suggest a cultural shift as younger Americans start reshaping estate planning priorities.

Implications for the Housing Market

The delayed transfer of boomer-owned homes could mean fewer properties entering the market in the short term, impacting housing supply and affordability. However, over the next decade, millions of these homes will inevitably hit the market, creating opportunities for younger buyers and investors.

Bottomline

The much-anticipated "Great Wealth Transfer" is unfolding slower than expected as baby boomers prioritize financial security during retirement. Yet, with real estate holding a key role in future inheritances, the next decade will see significant shifts in the housing market. Whether you’re planning your next move or investing in your future, having a strategy is key. Let’s connect to discuss your next steps toward living in Orange County!

Reference: Sartore-Bodo, Dina. "Boomers Are Refusing To Give Their $84 Trillion in Real Estate and Wealth to Their Children." Realtor.com, Jan 30, 2025.