The Impacts of the Boomers Dying Out: A Colossal Wealth Transfer Could Follow

As baby boomers—generally taken as those people born between 1946–1964—begin to experience the end of their lives, their departure from this world will not only carry implications for societal and cultural trends, but a also a massive potential for a colossal financial transfer of wealth. This shift will have a direct impact on the economic contributions of younger generations, with those further into their retirement years expected to be the most affected.

Within the current job market and economic climate, Gen Xers are the ones who will likely see the effects of the baby boomer's passing first. Perhaps under-prepared for their role as economic stewards, they are likely expecting to see an increase in monetary debt and other financial security measures, as they take on the responsibility of providing for themselves, their parents, and even their children.

As the boomer population passes away, there's also the consideration of rising tax rates and potential regulations on their estates— such as the increases seen in inheritance taxes in France, Italy and other European countries. In some cases, this could lead to a situation where the recipients of the transferred wealth—often those of the younger generations—end up with far less than expected, due to hefty taxes. If the younger generation did not expect these changes in the law and fail to plan in advance, then they may not be able to take advantage of any benefits or exemptions that might be made available by the government.

Furthermore, those of the boomer generation who amassed large quantities of wealth often did so through business success—not just through more traditional means of estate transfers or inheritance. As such, much of the wealth transfer which takes place post-mortem could be impacted by situations such as: highly leveraged businesses, high stock prices, management changes, liquidity issues, and/or lack of diversification. This may not only result in a greater financial burden and further strain on Gen Xers, but also a different type of wealth transfer that is far from the traditional meaning.

In addition to the transfer of more traditional types of wealth, the deaths of the baby boomers could also lead to other social and cultural impacts. While much of the responsibility for taking care of the retired generation was put on the shoulders of the boomers themselves—resulting in a smaller family size—as time progresses so too does the worry of"social gaps" and large debt gains placed upon the younger generations.

The passing of baby boomers could also lead to shifts in attitudes toward intergenerational contact — including the rise of various types of exchanges such as grandparenting, mentorship, and other elder care services — as well as a gradual decrease in the traditional values of respect and collaboration. There's also the consideration of cultural trends such as the emergence of influencers and celebrities as voices of authority, instead of the older generations — creating a lack of understanding and in some cases resentment as the younger generations try to make sense of their new roles and responsibilities in the face of a rapidly changing world.

The potential for a colossal wealth transfer brought about by the eventual passing of baby boomers has potential consequences for both those leaving an inheritance and those who are receiving one. Along with the potential for generational stress, the younger generations must be cognizant of changes to laws, estate regulations and liquidity considerations to ensure that they can take advantage of any potential benefits in order to maximize their wealth transfers.

This economic trend has the potential to affect multiple generations, as well as the entire global economy as a whole, making it important to recognize and be prepared for the possibilities which could unfold.

In doing so, all generations involved must practice responsible fiscal management, prepare for the long term—such as by establishing bank accounts and investment plans—and maintain an open dialogue in order to ensure that all parties involved are aware of the changes that are coming down the pipeline. In doing so we can ensure that the shift in wealth doesn't lead to economic disaster, but rather to a smooth transition which provides the best possible outcome for each side.