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November 19, 2019 @ 18:14 +03:00
The rich aren’t just getting richer. They’re getting older. And, fortunately for their children, they’re set to leave plenty of money in the bank. About $36 trillion will flow from one generation to another over the next 30 years, according to a report Tuesday from wealth manager United Income. The pace of bequests has already started surging. Americans inherited $427 billion in 2016, the most recent data available, up 119% from 1989 even after adjusting for inflation.
“Wealth equal to nearly two times the size of the U.S. GDP is expected to be gifted to charities and heirs over the next few decades,” said United Income founder Matt Fellowes. “It’s a historically unprecedented amount that is almost incomprehensibly large.” The beneficiaries aren’t all that young themselves. The study, which uses Federal Reserve and academic data, shows that from 1989 to 2016 U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More than a quarter of bequests now go to adults 61 or older. “Instead of diapers and school, inheritances are increasingly going toward medical bills and retirement savings,” Fellowes said.
Even inheritances, then, are part of a dynamic that’s widening the wealth gap between generations. Americans younger than 50 held just 16% of all investable assets in 2016, down from 31% in 1989, according to the Fed’s triennial Survey of Consumer Finances, leaving the rest to households 50 and older. Age inequality is most dramatic when comparing the oldest and youngest adults. In 1989, the median household age 65 to 75 held almost eight times more wealth than families headed by 25- to 35-year-olds. By 2016, according to an analysis by the St. Louis Fed, the median baby boomer had close to 13 times more wealth than the typical millennial.