$90,000,000,000,000 Transfer of Wealth Will Be Worthless for Many Due To Single Overwhelming Expense: Report

$90 trillion Transfer of Wealth May Dissolve in the Face of Overwhelming Health Care Costs, Warns Report

A staggering transfer of wealth from baby boomers to younger generations is currently unfolding, but a closer examination reveals that many individuals may not receive the windfall they anticipate. According to CNBC’s analysis, the exorbitant price of healthcare is poised to deplete the majority of boomers’ assets before they can be passed on to Gen Xers and Millennials.

One compelling report from Fidelity sheds light on the extent of individual savings required to cover medical expenses. For individuals turning 65 in 2023, the report estimates that they may need about $157,500 saved after taxes to meet healthcare costs in retirement. For couples, this figure leaps to $315,000.

To provide context, the Transamerica Center for Retirement Studies conducted a 2023 survey that examined the current levels of retirement savings among the relevant generations. The median savings stood at $289,000 for boomers, $82,000 for Gen Xers, and $49,000 for Millennials.

While the wealth transfer is underway, the majority of individuals will likely receive significantly less than expected. CNBC ponders who will have the financial means to endure the exorbitant expenses associated with healthcare. “The eye-popping figures surrounding the wealth transfer often obscure the reality that health care for the elderly is incredibly expensive and frequently wipes out people’s life savings. Boomers who are concerned about their own financial fate may be more aware of that fact,” the report states.

A study conducted in 2022 by wealth management firm Cerulli Associates discovered that 42% of the substantial wealth transfer will originate from high-net-worth and ultra-high-net-worth households, despite constituting only 1.5% of all households.

The transfer of $90 trillion in wealth may ultimately dissolve into insignificance when faced with the astronomical expenses tied to healthcare. Society grapples with the question of who will truly benefit from this wealth transfer as the burdensome costs associated with aging and healthcare come to the forefront.

Generated Image: Midjourney