The Great Wealth Transfer is a highly anticipated economic phenomenon in markets today that has been invoked to support everything from a floor under home prices to a boost in demand for luxury items, travel, and other discretionary spending. Today, baby boomers hold more than $94 trillion in assets—just over half of the total U.S. household net worth—and a meaningful share will pass to younger generations over the next two decades. This transfer of wealth is already underway and is set to accelerate as the oldest baby boomers turn 80 this year. The interesting questions, in our view, are: How much of the gross actually reaches heirs once retirement spending, taxes, and charitable giving are stripped out? Which households receive it? And what are they likely to do with it?
In this Economics Weekly, Richard de Chazal works through each of these questions and concludes that the transfer is large but narrow—it stays within families already near the top, deepening the concentration of wealth rather than easing it, with the impact on consumption far more muted than expected.