The greatest generational wealth transfer in history is taking place right now, with women uniquely positioned to inherit the lion’s share. Barring a major change, experts estimate $124 trillion of the country’s wealth will transfer by the year 2048. Over the next quarter century, women will inherit an estimated 70% of this mind-boggling total. This change is a big step in the financial world, offering new pathways and protections to women, to be sure.
The Bank of America Institute’s latest women and wealth report brings some good news with an important caveat. This includes about $54 trillion that will be inherited by widows and widowers. This “horizontal wealth transfer,” as it’s called, is all too common when one spouse passes and leaves assets to the other. Transfers occur as well when parents transmit wealth to their children through inheritances.
SB 620 offers female money to raise a rich female safety net, so that pooled resources cushion women who continue to suffer financial sex cuts. Carolyn McClanahan, MD, certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, underscores this belief.
You can't bank on it 100%, but that can ease the pressure. - Carolyn McClanahan
In fact, based on McKinsey research, women will own about the same as two-thirds of the private wealth in the United States by 2030. Indeed, this will be the largest wealth transfer by gender in history. The Bank of America Institute's report reinforces this projection, noting that more than $100 trillion is expected to change hands in the coming decades.
Kay Hope is a research analyst at Bank of America Global Research. In hard numbers, she reassures us that women stand to benefit the most from this transfer of wealth. Where people live affects the new wealth transfer reality, as state laws and tax impacts differ markedly by state.
The wave of affluence brings extraordinary promise, but it poses immense problems. Financial planners advise that planning and preparation be taken in order to properly handle these sudden influxes of wealth.
Many often forget to consider the downsides that are associated with wealth transfers if they don't have a plan in place. - Christa O'Brien
That's why it's important to plan early and make sure all beneficiaries are part of financial planning conversations with trusted advisors. - Christa O'Brien
Careful planning will help make sure that beneficiaries are prepared to deal with the challenges and intricacies that are part of managing great wealth. This encompasses knowledge of the tax impacts, paths of investment, and estate planning aspects.
Whether it's an inherited 401(k), a life insurance payout or liquid assets transferring to your name, there are implications on how much you should take out, and when. - Christa O'Brien
When the next wealth transfer takes place, you're setting that beneficiary up for greater financial success. - Christa O'Brien
Additionally, it is important to be on guard against fraud and scam artistry.
To protect yourself from fraud, be cautious when sharing information with unknown sources and verify credibility before making financial decisions. - Christa O'Brien
A recent report from the Bank of America Institute recommends that this shift in wealth ownership might have significant economic implications.
Increased wage gains, coupled with the 'great wealth transfer,' position women to be key drivers of economic growth. - Bank of America Institute's report
