Rich Millennials and Gen Xers Aim To Share More Wealth Than Boomers — Here’s Why
Written by
Vance Cariaga
Edited by
Amber Barkley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Reaching a certain level of wealth means figuring out what to do with all your money. It’s a good problem to have, but it still requires strategizing over how much to invest, how much to spend on fun and entertainment, and how much to share with others.
When it comes to sharing, younger Americans are much more likely to do so than older ones, according to a new survey from Charles Schwab.
Also, find out how wealthy boomers are planning to pass on their money.
How Millionaires Are Sharing Their Money
The survey, released in early December, polled 1,005 high-net-worth (HNW) Americans to learn how they plan to use their wealth. Those surveyed all have $1 million or more in investable assets, with 105 boasting $10 million or more in investable assets.
Among the key findings was that millionaire millennials and Gen Xers are more than twice as likely to share their wealth with the next generation during their lifetimes compared to millionaire baby boomers.
In contrast, boomers are more likely to say they want to enjoy their money themselves while they’re alive. Younger wealthy Americans expect to distribute over twice as much of their wealth while alive compared to wealthy boomers, the survey found.
Sharing Wealth vs Using Wealth
Here’s how each of the three generations responded to the statement, “I want the next generation to enjoy my money while I’m still alive.”
- Wealthy millennials: 53%
- Wealthy Gen Xers: 44%
- Wealthy boomers: 21%
Here are the responses to the statement, “I want to enjoy my money for myself while I’m still alive.”
- Wealthy millennials: 15%
- Wealthy Gen Xers: 11%
- Wealthy boomers: 45%
In terms of how much wealth rich Americans expect to pass on, the average among the three generations surveyed was $4.1 million.
Broken down by generation, rich millennials expect to pass on $4.7 million, Gen Xers expect to pass on $4.8 million and boomers expect to pass on $3.1 million.
Breaking Financial Tradition
These findings represent a “break from tradition” in that younger HNW Americans are opting to transfer wealth during their lives rather than waiting until after they have died, according to Charles Schwab. They’re also planning a “more prescriptive approach” to how their wealth is used by planning their transfers early and determining how much they want to pass along — and when.
About 60% of wealthy Americans said it was important to them to pass some of their wealth on while they are alive, “because they can “help provide financial support and assistance to their beneficiaries (46%), share in their joy, and make memories together (36%),” Charles Schwab reported.
Nearly all millennials and Gen Xers — 97% of each generation — surveyed plan to transfer at least some of their wealth during their lifetimes, while 56% of boomers plan to do so.
“Younger Americans could be poised to reshape legacy planning and the future of how wealth is passed to the next generation,” Andrew D’Anna, managing director of retail client experience at Charles Schwab, wrote in the press release.
What To Consider If You’re Planning To Share Your Wealth
Those who do aim to pass along money while they are alive will need to plan carefully, MarketWatch reported. That’s mainly because tax rules can get complicated for both the giver and the receiver. You are strongly recommended to hire a professional financial advisor to help out.
“We very closely track the gifting that our clients do,” Brian McGraw, a certified financial planner at Hightower Wealth Advisors in St. Louis, told MarketWatch. “If we know they’re spending everything they need to and they still have so much left, we show them how much they could give their kids now and see them enjoy this money.”
More From GOBankingRates
