At PCM Encore, we recognize that passing wealth to future generations is a priority for many of our clients as they plan for retirement and work to preserve their portfolios. Continue reading to learn more about the Great Wealth Transfer and the innovative strategies our clients can utilize to navigate estate and wealth planning. Key takeaways:
- High-net-worth individuals and family offices need to take proactive steps to prepare.
- Access to a range of private investment options.
- Diversification strategies to help preserve wealth over time.
What Is the Great Wealth Transfer?
The Great Wealth Transfer is a historic shift of wealth from the Baby Boomer and older generations to younger generations. It is estimated that over $100 trillion in wealth will be transferred through 2048 in the United States alone, with Millennials and Generation X projected to inherit approximately $85 trillion.1 This unprecedented shift of assets toward younger and more philanthropic generations demands innovative strategies to safeguard assets and preserve legacies. The wealth transfer is also expected to have broad economic implications, as the values and priorities of younger generations differ from those of Baby Boomers – potentially driving shifts such as increased philanthropic giving and a stronger emphasis on ESG and impact investing.2
Given that older households possess the majority of assets in the United States, a substantial portion of the wealth transfer is expected to come from the wealthiest 2% of American households. This cohort of high-net-worth and ultra-high-net-worth earners is expected to contribute $62 trillion, representing over half of the overall total volume of transfers over the next few decades.
Source: Fortune
By the Numbers
- Approximately $85 trillion in wealth is expected to be passed down to Millennials and Gen X through 2048
- Millennials are projected to inherit the most of any generation demographic over the next 25 years at $46 trillion
- Women are due to inherit much of the wealth, with an expected $40 trillion inheritance in “horizontal” transfers between spouses and peers to widowed Baby Boomer women
- Over 28 million women are expected to become the chief asset managers in their families3
- Over $12 trillion may be allocated to philanthropy or charitable causes
- The wealthiest 2% of high-net-worth and ultra-high-net-worth households will account for over half of the total volume of transferred wealth
- As a result of this shift, by 2030, Millennials and Gen X will manage more wealth than any previous generation
As this generational shift takes shape, we anticipate changes on the horizon – including evolving tax legislation, the continued expansion of private markets, and the transformation of philanthropic practices – presenting both opportunities and challenges tailored to the unique circumstances of each individual and family. Leveraging the guidance of our trusted advisors, PCM Encore can provide expert insights to help clients navigate this complex process.
Preparing for the Great Wealth Transfer with PCM Encore
PCM Encore is here to help families and high-net-worth individuals develop strategic plans that prepare them for the Great Wealth Transfer and position their assets for long-term sustainability. We offer structured conversations and proprietary planning tools to help our clients align their approach with their long-term philanthropic goals and estate and inheritance plans. Our team at PCM Encore is available to help address your portfolio-related questions, and offer guidance to optimize tax efficiency and safeguard generational wealth. PCM Encore allows access to innovative wealth management strategies, including enhanced exposure to diversified private market assets such as private equity, and provides clients with a broader roadmap to take control of their financial future. We specialize in estate and legacy planning, helping protect your wealth and ensuring a smooth transfer of assets to future generations. We also offer guidance on strategic gifting, helping clients maximize the impact of their charitable contributions and family gifts while optimizing associated tax benefits. To learn more about how we can help clients navigate the Great Wealth Transfer, reach out to our team at hello@encoreinvestment.com or book an introductory meeting here .
"This transformational period presents a unique opportunity for innovation and growth within wealth management. At PCM Encore, we are dedicated to helping our clients safeguard their wealth and give it meaningful purpose for generations to come."
— Michael Paulus, Founder at PCM Encore
Reference
