Millionaire Gen-Xers and Millennials are more than twice as likely to prioritize sharing their wealth with the next generation as Baby Boomers, a new survey has found, with less than a third of Boomers planning to leave an inheritance behind after they die.
The study, conducted by financial services company Charles Schwab, surveyed 1,000 Americans with a net worth above $1 million in investable assets, asking them about how they intend to use their fortunes before and after their deaths. According to the survey results, 97% of wealthy Americans plan to pass on their financial assets at some point, with 36% “preferring that the next generation enjoy their wealth while they’re still living” and 39% “preferring to preserve their money for the next generation until after they pass away.”
When broken down by generation, however, the timing and method of this wealth transfer varies widely.
According to the results, sharing wealth with family and loved ones has become an increasingly popular option among younger generations of millionaires. 53% of Millennials and 44% of Gen-Xers prefer lifetime transfers, compared to just 21% of Boomers, ages 60 to 78.
Per Schwab: “A generational shift is emerging among wealthy Americans planning to pass their wealth…as younger wealthy Americans break from tradition by opting to transfer their wealth during their lives rather than waiting until after death.”
In contrast, the Baby Boomer generation largely seems to favor using their wealth on themselves during their lifetime. The statement “I want to enjoy my money for myself while I’m still alive” was met with 45% agreement from Boomers, compared to just 11% of Gen X and 15% of Millennials.
Of those who plan to leave assets behind, wealthy Boomers expect to leave a smaller than average inheritance compared to their younger counterparts, expecting to pass along $3.1 million compared to the $4.7 million and $4.8 million of Millennials and Gen-Xers respectively. Boomers will also distribute a far smaller percentage of their wealth while alive, averaging 19% compared to 52% for Millennials and 49% for Gen X.
Among those of all generations who plan for a lifetime wealth transfer, the most common reasons mentioned were providing financial support and assistance to their beneficiaries (46%) and making memories together (36%).
“It’s encouraging to see that a majority of wealthy Americans who plan to pass their wealth have started to formalize those plans and documents and communicate with their families,” said Susan Hirshman, director of wealth management for Schwab Wealth Advisory and Schwab Center for Financial Research. “In addition to those foundational steps, we encourage families to ground discussions and planning around shared values and goals for wealth being transferred. These conversations can help heirs see themselves as wealth stewards, rather than just beneficiaries, and gain important perspective on the meaning of wealth, legacy, and the responsibilities that come with it.”
Connor Walcott is the lead writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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