The greatest wealth transfer in history refers to the baby boomers (those born between 1946 and 1964) retiring and transferring their mass amounts of wealth to their heirs or charities of their choice in the next 20 plus years.
This ‘great transfer’ has erupted many points of discussion among political economists and businessmen; being that some argue that the GWTH has been miscalculated and overstated. For instance, the severe national debt that the government has accrued for our children to deal with, coupled with inflation and taxes, will negate any mass windfall that future generations could receive. One Huffington Post blogger claims that the GWTH is already happening; right under our noses – it’s not about transferring wealth to our heirs, but transferring $700 billion to countries that provide us with oil. Regardless of the varied arguments in debate of when, how, and what the great wealth transfer is, the fact still remains the same – baby boomers will pass on an estimated $30 trillion (CNBC.com).
How Baby Boomers Behave with Their Money
Why will boomers pass on such a large amount of cash? Currently, baby boomers make up almost a quarter of our population (Population Reference Bureau). With so many baby boomers still around, working or about to retire, they naturally control much of the economy with their spending and saving habits.
Baby boomers outspend any other demographic by $400 billion each year. And it’s been reported that the boomer generation spends more on education, healthcare, mortgage debt and financial support for adult children (NCPA.org). But they also make the most money of any demographic as well; totaling 42% of all after-tax reported income (Resources 50+ Fact & Fiction). The boomer generation sets the tone for the economy and will continue to do so as the years pass and their wealth is transferred.
Insulating Your Money to Make It Last
With the GWTH causing so much money to circulate through the economy, it’s important to protect, or shelter what you’ve earned – so you can pass the maximum amount to your beneficiaries, or receive a retirement income. Some financial advisors suggest investing in hard assets like gold and silver, but you can also insulate your money in Whole Life Insurance.
By protecting your money through whole life insurance, you are guarding it from inflation (as cash value insurance earns interest), and if you want to pass money to family or use your insurance for retirement, you are avoiding heavy taxes and fees.
For more information on how Baby Boomers can successfully make it through the GWTH read:
Infinite Wealth: A Different Kind of Retirement