$30 Trillion Boomer Giveaway Could Pay National Debt, Twice
NEW YORK (BankingMyWay) --Conventional wisdom says that Baby Boomers are the beneficiaries of the greatest wealth transfer in history.
To some extent, that's true. According to a study by Accenture, Boomers are already in the process of receiving some $12 trillion in inheritance from their parents -- those parents popularly known as coming from the Tom Brokaw-dubbed "Greatest Generation," who grew up in the Depression Era and saw America through World War II.
If the Boomer generation experienced the biggest familial giveaway in history, that's only because they haven't had a chance yet to give away all of their massive wealth. It's the Boomers' kids that really stand to clean up on the inheritance front.
The big Boomer giveaway will almost triple the inheritance money bag that their parents left them, from $12 trillion to $30 trillion, when it comes time to dole out their life's savings over the next few decades.To put that number into perspective, the current U.S. national debt stands at $15.9 trillion. So forget about the Greatest Generation and start thinking about what Accenture calls "The Greater Wealth Transfer." We'll affectionately, and informally, dub these recipients the "Silver Spooners," or "Spooners," for the amount of wealth the sons and daughters of Boomers are about to inherit without doing an iota of work to merit the fortune. (You may already know them as Gen-Xers and Gen-Yers, but you didn't know just how much money they are about to come into, did you?). Maybe you did (in fact, maybe you are one of the many about to become very "fortune-ate.") "At its peak between 2031 and 2045, 10 percent of total wealth in the United States will be changing hands every five years. The accelerating pace of this transfer, combined with the generational differences in the demands and expectations of wealth management service providers, makes this massive transfer of wealth between generations a defining issue for the wealth management industry," the Accenture study states. Of course, this won't be the case for Warren Buffett's children, who stand to receive very little, as the second-richest American behind Bill Gates, don of American capitalism and CEO of Berkshire Hathaway (BRK.B), has made it clear that not only does he want the existing 1% to pay more in taxes before they give it all away to their kids, but he won't allow his kids to become part of a new 1% by doing nothing more than sitting back and inheriting bags of money (Buffett has created the GivingPledge organization to get the wealthiest global citizens to donate at least half of their fortune to charity upon their death.) The Accenture data is predicated on the idea that Boomers won't spend all that money before they are done, and there's recent evidence that Boomers are doing as much as possible to dip into the $30 trillion before completing the generational giveaway (though they aren't necessarily stepping up to pay the federal deficit with it.)
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