As the baby boomer generation ages and begins to pass down their fortunes, a significant shift in wealth distribution is on the horizon. While millennials and members of Generation Z often capture headlines regarding inheritances, it is Generation X that stands to benefit the most in the near term. According to a recent study by Wealth-X, the average age of individuals in North America poised to inherit fortunes of $5 million or more is 46.1 years old, placing many Gen Xers at the forefront of this financial transition.
The Overlooked Generation
Generation X, typically defined as individuals aged between 44 and 59, has often been overshadowed in discussions about wealth inheritance. While millennials (ages 28 to 43) and Gen Z are frequently highlighted as the future inheritors of substantial wealth, the reality is that Gen X is already in line to receive significant windfalls. The Wealth-X report emphasizes that this generation may be the primary beneficiary of the anticipated $84 trillion Great Wealth Transfer over the next decade.
Interestingly, the average age of those expected to inherit even larger sums—specifically from parents worth $30 million or more—rises slightly to 47.6 years. This indicates that as baby boomers begin to pass away, their Gen X children will be the first to receive these substantial inheritances, positioning them uniquely in the wealth landscape.
Changing Focus for Wealth Management
Traditionally, wealth management firms and private banks have concentrated their efforts on millennials and Gen Z, anticipating the trillions of dollars that will eventually flow to these younger generations. However, the Wealth-X report suggests a shift in focus is necessary. With more than half of millennials expecting an inheritance of at least $350,000, it’s clear that wealth management strategies should also cater to the immediate needs and financial concerns of Generation X and where they are in the retirement timeline.
What Does This Mean for Your Financial Strategy?
If you’re in Gen X, while you may stand to inherit a large sum of money, that’s no guarantee that you will receive and keep all of it. You may lose much of it to an expensive probate process, taxes, or a poor financial strategy if you’re entering a new wealth class. In addition, without a proper estate plan for you and your parents or benefactors, there are simply more unknowns to the wealth transfer process that may lead to squandering what could be generational wealth.
If you’re interested in protecting your inheritance or making sure what you leave behind stays intact for your beneficiaries, Click HERE to reach out to one of our professionals at Haven Financial Group today for a complimentary review of your finances.
