Somewhere this morning a woman in her seventies is sitting across a desk from a man she has met once. There is a folder in front of her. Her husband’s name is printed on the tab, and the number inside is one she never had to think about.
She is the biggest story in American finance and almost nobody writes about her.
The standard version goes like this. Roughly $124 trillion changes hands by 2048. The children collect, and the wealth managers chase thirty-year-olds.
Read the same research one line further down and the picture changes completely.
$124T
Total projected to change hands by 2048
$54T
Of that moves sideways to a spouse first, before any heir sees a dollar
$40T
Of the sideways money goes to widowed women in this cohort and older
Forty trillion dollars. Hold that one, because it is the number the industry actually plans against.
Gen X inherits $14 trillion over the next decade. Widows in our own cohort get nearly three times that.
The reason is ordinary arithmetic. Women in this generation tend to marry slightly older men and then outlive them. So the household’s assets stop at one desk before they move on.
That pause can last twenty years. A whole investing lifetime. It sits inside a transfer everybody describes as a handover to the young.
And when it stops at that desk it usually stops as cash. Accounts get consolidated. A house sometimes gets sold. The proceeds sit still through the year that follows a funeral, and what still money earns is set in Washington on Wednesday.
The last aisle, read from the receiving end instead of the giving one.
The research firm did not bury the implication. It wrote the number up as an opportunity for providers.
Two honest limits. The money is far more concentrated than the headline suggests. Some 68% of transfers come from households holding a million dollars or more. Only 6.9% of American households are in that group.
And the timing is cruel for both sides of that desk. The industry’s great opportunity arrives in the worst twelve months of anybody’s life for decisions. The good ones do nothing for a year.
The arithmetic
All transfer figures are from Cerulli Associates. About $124 trillion is projected to change hands through 2048, with roughly $105 trillion going to heirs and about $18 trillion to charity. Around $54 trillion passes horizontally to spouses before transferring to the next generation, and nearly $40 trillion of that goes to widowed women in the Baby Boomer and older generations. Gen X is projected to inherit about $14 trillion over ten years, against roughly $8 trillion for Millennials, with Millennials inheriting most over twenty-five years at about $46 trillion. The concentration figures, 68% of transfers from households with at least $1 million in investable assets and only 6.9% of households holding that much, are also Cerulli’s. The characterisation of these flows as an opportunity for providers is Cerulli’s own wording in its press material. The twenty-year pause, and the read on who profits, are Boomers Trade’s own. This is a letter about money and markets, and it is not financial advice.
Watch the sideways number rather than the headline one. Everything written about this describes the second leg. The first leg is bigger, sooner and aimed at this cohort. If you are the one in your house who handles the statements, the useful thing this weekend costs nothing. Sit down with the person who does not, and walk them through where everything is.
Andrew
Boomers Trade is written by someone getting older right alongside you, and watching who profits from it.
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