The Great Wealth Transfer is set to see an estimated $54 trillion pass from one spouse to another between 2024 and 2048. According to research by Cerulli Associates, more than 95% of that wealth will go to women, as wives tend to outlive their husbands. The money comes from aging baby boomers and silent generation members who have amassed significant wealth in home equity, investments, and other assets over the years.
While much of the wealth will eventually pass to children, trillions of dollars will first transfer within the same generation, mostly from dying husbands to surviving wives. For younger Americans banking on an inheritance, this serves as a reminder that they may have to wait longer than expected. Researchers at the Wharton School of the University of Pennsylvania found that Americans are most likely to inherit between the ages of 56 and 65.
The Great Wealth Transfer to widows has implications for millions of older Americans.
Wealth transfer to women
In many marriages, especially among older generations, men handle the finances, and spouses might know little about investment and retirement accounts, bill-paying routines, and estate plans.
However, women are rapidly gaining confidence in household finance. A study by Allianz Life found that 43% of married women considered themselves the chief financial officer at home in 2022, up from 34% in 2021. Financial advisers and estate planners are being alerted to the importance of talking to both partners in a household, not just husbands.
It’s essential to establish relationships with families, rather than individuals,” an industry expert noted. To prepare for the potential death of a partner, couples should work together on an estate plan, collaborate on naming beneficiaries, share household account information, and plan for long-term care expenses. More than 80% of Americans will need long-term care at some point, according to the Center for Retirement Research at Boston College.
This significant wealth transfer emphasizes the importance of financial literacy and preparedness among all marriage partners as a new era of financial dynamics unfolds.
