Generation X, typically defined as individuals between the ages of 44 and 59, has been largely overlooked in discussions about the impending Great Wealth Transfer. As baby boomers prepare to pass down their fortunes to the next generation, it is clear that Gen Xers stand to benefit the most in the near term. According to a recent study by Wealth-X, individuals in North America set to inherit fortunes from parents worth $5 million or more have an average age of 46.1, while those expected to receive inheritances from parents worth $30 million or more have an average age of 47.6. This places Generation X at the forefront of the wealth transfer wave, overshadowing the expectations of millennials and Gen Z.
Wealth management firms, luxury companies, and real estate firms have been primarily focused on attracting younger clients in anticipation of the impending wealth transfer. However, the study suggests that it is time to shift the focus towards Generation X. While more than half of millennials anticipate inheritances of at least $350,000, it is the members of Generation X who will be the first in line to inherit from their wealthy parents. This crucial insight challenges the conventional narrative that the younger generations will be the primary beneficiaries of the Great Wealth Transfer.
The study reveals that the wealth to be transferred in the next 10 years will be highly concentrated at the top. A staggering $31 trillion is expected to be passed down by 1.2 million individuals worth $5 million or more. Of this amount, 64% will come from the ultra-wealthy, defined as those worth $30 million or more. This means that nearly $20 trillion will be inherited by a mere 155,000 individuals in the upper echelon of wealth. The super-wealthy, including those worth $100 million or more, are projected to account for nearly half of the total wealth being transferred. Even billionaires are expected to pass down approximately $5 trillion, underscoring the immense concentration of wealth within a select group of individuals.
Adapting to Changing Values and Priorities
As inheritors from the Great Wealth Transfer, members of Generation X are poised to bring about a shift in values and priorities compared to previous generations. Wealth managers, luxury firms, and philanthropies will need to adapt their strategies to cater to the unique preferences of this cohort. While millennials and Gen Z are often highlighted in discussions about inheritances, it is clear that Generation X holds significant potential that should not be overlooked.
Generation X stands as the untapped reservoir of wealth potential in the upcoming Great Wealth Transfer. By recognizing their pivotal role in the transfer of wealth from baby boomers, wealth management firms and luxury companies can position themselves to capitalize on this overlooked demographic. As the landscape of inheritances continues to evolve, adapting to the changing values and priorities of Generation X will be vital for navigating the complexities of the wealth transfer process.
Leave a Reply