Recent projections on the magnitude of wealth passing from older generations to their heirs have generated considerable discussion within the financial industry. Visa Business and Economic Insights released an estimate of $36 trillion in baby boomer wealth that will transfer to Gen X and millennials over the next 20 years, while Cerulli Associates projects $105 trillion will pass from older generations to heirs by 2048. The substantial discrepancy between these figures has prompted questions about the scope and consequences of this intergenerational wealth transfer.
The methodological differences between the two analyses account for much of the variance in their findings. Visa’s analysis began with the approximately $93 trillion in wealth currently held by baby boomers and systematically removed several categories of funds: $5 trillion in liabilities such as mortgage debt, $28 trillion in wealth held by the top 1% of earners, $16 trillion in retirement spending projections, and $8 trillion allocated for taxes and charitable donations. Visa’s chief economist Wayne Best explained that the company sought to calculate how much inherited money would actually be spent by typical consumers, excluding the spending patterns of ultra-wealthy individuals who purchase items like yachts and airplanes. After these deductions, Visa concluded that $36 trillion would be passed down, with $28 trillion going to savings and investments and $8 trillion directed toward consumer spending on vehicles, homes, travel and retail goods.
Cerulli’s broader approach examined total wealth transfers from all generations rather than focusing solely on baby boomers. The research firm included transfers occurring by 2048 and incorporated wealth from the Silent Generation and Generation X members aged 46 to 61. Cerulli estimated that roughly half of the $100 trillion-plus total would originate from high net worth and ultra-wealthy families. The firm projected that $4 trillion would first pass to spouses, predominantly women, before moving to children and other heirs, with approximately $18 trillion directed to charitable causes.
Analysts on both sides emphasize the significance of these transfers for various industries. Cerulli’s associate director of wealth management, Chayce Horton, noted that the greatest impact will likely occur in the wealth management sector rather than consumer-focused companies. According to Cerulli’s projections, Gen X will inherit $14 trillion within the next 10 years, while millennials will eventually receive the largest share at approximately $46 trillion over the next 25 years. Horton cautioned that companies serving wealthy clients should not underestimate the importance of this wealth transfer, noting that one in four wealth management clients currently derive wealth from inheritance, a figure second only to business owners and founders.