Boomers inherited $9TRILLION over last 30 years and now have 13 times more wealth than millennials

Boomers have become wealthier over the past three decades, widening the wealth gap with younger people, according to a new study.

From 1989 to 2016, Federal Reserve and academic data shows that US households inherited more than $8.5 trillion, concluded the report released Tuesday by United Income, a money manager. 

The study also found that Americans inherited $427 billion in 2016, according to the most recent data available, up 119 per cent from 1989 after adjusting for inflation.

Money manager United Income found that Americans inherited $427 billion in 2016, according to the most recent data available, up 119 per cent from 1989 after adjusting for inflation. The above chart shows total inheritance received over a 30 year period

'Wealth equal to nearly two times the size of the US GDP is expected to be gifted to charities and heirs over the next few decades', says United Income founder Matt Fellowes (pictured). 'It's a historically unprecedented amount that is almost incomprehensibly large'.

‘Wealth equal to nearly two times the size of the US GDP is expected to be gifted to charities and heirs over the next few decades’, says United Income founder Matt Fellowes (pictured). ‘It’s a historically unprecedented amount that is almost incomprehensibly large’.

‘Wealth equal to nearly two times the size of the US GDP is expected to be gifted to charities and heirs over the next few decades’, United Income founder Matt Fellowes tells  Bloomberg.

 ‘It’s a historically unprecedented amount that is almost incomprehensibly large’.  

Those who have inherited wealth also are older. The average age of recipients over the past 30 years rose from 41 to 51, according to study’s findings, and more than a quarter of bequests now go to people who are 61 or older.

‘Instead of diapers and school, inheritances are increasingly going toward medical bills and retirement savings’, Fellowes tells Bloomberg.

The findings show how the wealth gap is widening between the young and the old. Americans who are younger than 50 held only 16 per cent  of investable assets assets in 2016, a decline from 31 per cent in 1989, according to the Fed’s Survey of Consumer Finances, reports Bloomberg. 

The remainder is held by households 50 and older. 

Age inequality stands out even more when comparing the wealth of generations. 

The median household age 65 to 75 in 1989 held eight times more wealth than families headed by 25- to 35-year-olds. 

By comparison, in 2016 the median baby boomer had close to 13 times more wealth than average millennials. 

While the overall value of inheritances more than doubled in the past 30 years, United Income wanted to see if the increase was driven by the ultra-wealthy, or if it was more a general trend among households.

The study considered the average size of estates, finding that the mean inheritance in 2016 was worth about $295,000, up from about $169,000 thirty years ago, adjusted for inflation.

United Income's study considered the average size of estates, finding that the mean inheritance in 2016 was worth about $295,000, up from about $169,000 thirty years ago, adjusted for inflation. The above chart tracks the increase

United Income’s study considered the average size of estates, finding that the mean inheritance in 2016 was worth about $295,000, up from about $169,000 thirty years ago, adjusted for inflation. The above chart tracks the increase

But because that average can be pulled up by ‘high-outliers’, United Income looked at median estate sizes.

Looking at what it called a ‘more accurate assessment of the central tendency, or typical inheritance,’ United Income found that the median is $55,000, once adjusted for inflation, an increase of $15,000 over the same 30 year period.

‘Most inheritances are going to older adults who have little in the way of retirement savings,’ said Fellowes, a former Brookings Institution scholar. ‘People receiving inheritances are pretty middle class’.

United Income found that only about 9 per cent of estates include a house or other property. The average estate also was about 46 per cent stocks, bonds, cash and other liquid investments. 

The estimates don’t include gifts made during donors’ lifetimes – a move in estate planning for ultra-high-worth individuals which often relies on the use of trusts. 

United Income still found a widening gap that has isolated the ultra rich from everyone else.

The median inheritance has risen only $15,000 in three decades, while it’s more than doubled for the 0.3 per cent of Americans who inherit at least $1 million. 

Those among the wealthiest of individuals in 1989 averaged an inflation-adjusted $2.7 million, which by 2016 rose to an average $6.6 million.

The median household age 65 to 75 in 1989 held eight times more wealth than families headed by 25- to 35-year-olds. By comparison, in 2016 the median baby boomer had close to 13 times more wealth than average millennials, according to the United Income analysis (file photo)

The median household age 65 to 75 in 1989 held eight times more wealth than families headed by 25- to 35-year-olds. By comparison, in 2016 the median baby boomer had close to 13 times more wealth than average millennials, according to the United Income analysis (file photo)

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