[00:00:03] This is Sales Globe Signals, and I'm Mark Danolo.
[00:00:08] You know, I was thinking about the massive demographic shifts in our country and in the world broadly. And one thing I recall in business school, in demographics class, we talked about demographic movements that are almost certain, you know, the age of different cohorts, and, you know, that they're going to move along at a certain pace.
[00:00:31] And they talked about it as it was. It was like the pig moving through the python. It was just a matter of time before that pig moved along, and it was going to hit certain age levels and things were going to happen.
[00:00:43] And so we've got this big shift in the generations, and we've got this group called the Baby Boomers, that's the really big pig moving through the python. And we were talking about this back in the, in the 90s, early 90s, and I was thinking about this and the massive shift in wealth that's going to go along with that, and that's going to have a major impact on us personally and commercially in terms of our businesses.
[00:01:12] So in this issue of Signals, I wanted to look at that in terms of what I called the great generational wealth transfer. And I asked the question, will the kids save it or the kids spend it? And so behind that, that humor is a real movement of wealth that we have to understand and we to plan for.
[00:01:28] And so we're living through one of the biggest private wealth transfers in American history.
[00:01:34] It's guaranteed, it's predictable, and by the time it's done, we're going to have about $124 trillion that will have changed hands just in the United States alone. So I want to walk through what that means for your customers, for your products, for your growth strategy, and maybe even for you personally, because a few people that have read this have said to me, hey, that was really meaningful because I can understand what might happen or what might not to my generation and what I may or may not even inherit. And you can get the detailed numbers and you get the charts and a written version of Sales Globe signals on LinkedIn or at salesglobe.com so let's set the stage.
[00:02:14] So the headline, the Baby Boomers, like I said, the people born between 1946 and 1964, they control more than $83 trillion in household wealth just in the the US alone.
[00:02:26] That's more than 10 times what the millennials hold today. And we'll talk about the generations in a second and who they are.
[00:02:34] So the Baby Boomers are kind of the fortunate ones. They caught the Tailwind.
[00:02:39] After the Great Generation or the silent generation, they had a stock market that quadrupled during their peak earning years. So they had lots of opportunity to build wealth. They had accessible homeownership. Even though we had interest rates and mortgage rates up near 20%. Back in the early 80s, they had defined benefit pensions. These are the pensions you get from companies that just come along with a job. That was before we had 401ks when people had to decide how much of their money they were going to put away. They had these DB or defined benefit plans. And those things accumulated a lot of wealth over the years.
[00:03:14] And they had decades of falling interest rates that pushed asset values higher year after year. So when you think back to 1980, 1981, as I mentioned, we had interest rates that were up near 19 20%.
[00:03:26] And despite what everybody talks about with interest rates now, and, oh, they're so high, if you actually look at the chart all the way back to the 80s, you'll see the interest rates are historically low. So the baby boomers have basically ridden that wave for decades.
[00:03:42] And so that's going to be one of the major generations that's going to transfer wealth along with what we call the silent generation. And let me just talk about who the generations are for a second, just so you have some context.
[00:03:54] So the silent generation, those are the people born between 1980, 1928 and 1945. Those are people that are going to be 81 years old to 98 years old right now. So my dad just turned 93. He's part of the silent generation. So they weren't ostentatious. They were kind of the children of World War II.
[00:04:17] And I remember back my mom and her family and how frugal they were. I won't tell you half the stories about that, but that generation built up a lot of wealth.
[00:04:26] And then after the war, after World War II is over, the baby boomers came along. Those are people born between 1946 and 1964. So 1946, right after the World War II ended. So right now they're about 62 to 80 years old. And those are the. That's the big group that's going to be retiring and passing along wealth. And that wealth is going to go to the next three groups that I'll mention, which are Generation X, born 1965 to 1980, they're about 46 to 61 years old. The millennials, also known as Generation Y, 1981 to 1996, they're 30 to 45 years old. And then Gen Z born 1997 to 2012 and they're 14 to 29 years old. So the oldest of them are just approaching 30.
[00:05:12] So you've got roughly a trillion dollars per year that's already flowing from the silent generation and the baby boomers, those two first generations, to Gen X and the millennials and gen Z.
[00:05:27] On January 1st of 2026, the leading edge of the baby boomers already turned 80.
[00:05:32] And baby boomer deaths are projected to climb from about 2.6 million people a year today to about 4 million a year by 2037. And it's going to peak around the mid-2040s. So it's a slow trickle right now, but it's going to start to become a flood over the next two decades. And so we can actually pre this and we can see this ahead. So I want to get into a few signals and what that might mean for profitable revenue growth and for your business.
[00:05:59] So signal one is, is scale and the scale is unprecedented. We've got $124 trillion that's going to be moving through 2048 and it's going to go to two places. Most of it, about 105 trillion is going to go to AHHR, so it's going to be moved to the next generation.
[00:06:17] And 18 trillion is going to go to charity, which is really cool. So you've got a big chunk of that that's actually being given to other causes other than the families.
[00:06:26] You know, there are a lot of high net worth families that say, well, the kids aren't going to get all my money. It's actually going to go to other places that can use it versus my kids because I want my kids to learn how to work and build wealth themselves.
[00:06:37] So let's take that $105 trillion and put that in context.
[00:06:41] The United states GDP in 2023 was around $27 trillion, okay? And we're talking about $105 trillion. So the $105 trillion is going to be moving is nearly four times what our annual output is of the entire American economy.
[00:07:00] So it's huge. Some of that's happening right now as I mentioned, is starting to trickle.
[00:07:04] There are required minimum distributions from retirement accounts that are hundreds of billions of dollars annually that are going into the economy. So that has to come out of these retirement accounts.
[00:07:16] Gen Z and the older millennials, people in their late 20s, as I mentioned, to their mid-40s, who are challenged as first time home buyers. And if you remember, one of our prior sales globe signals issues, we Talked about the average first time home buyer being 40 years old. Now a lot of those people, nearly half those people are getting help from their parents with down payments on homes. So they're getting those, those inheritances early, about 20 to $50,000 at a clip, typically on down payments.
[00:07:47] And so that money's being used to help people get into home. So it's, it's having really good uses while, while those parents are still alive. So what does it mean for profitable revenue growth? And we're going to start to see some of the themes repeat here in terms of the beneficiaries, in terms of businesses and industries. So if you look at industries, obviously first up is financial services. So wealth management, investment advice, trust companies, estate attorneys, tax professionals.
[00:08:15] But they have to plan in order to get it. It's not like the money's just going to come to them because they happen to have the parents or the grandparents as clients. Only 19% of younger people who are going to inherit that money are going to continue with their parents. Financial advisors.
[00:08:31] So the big risk to your business, if you're one of those financial services companies, it's the person, the beneficiary that you've never met, it's the grandkid or the child that you've never had a conversation with. It's the relationship that you never built other than with your direct client.
[00:08:49] So there is a real risk there of doing nothing and not working on the relationship development and building to the next generation. So companies are going to invest in, in multi generational relationship models and doing the things necessary to do that. The family meetings, the digital tools, the estate planning conversations, those are the ones that are going to hold on to the assets when those assets move. So you got to plan ahead on that.
[00:09:13] Signal two is the clock is running. So this is timely. As I mentioned, some of this is already happening right now. So in terms of timing, the oldest baby boomers just turned 80.
[00:09:25] By the mid-2040s, roughly half the baby boomers are going to be gone.
[00:09:29] So they're going to pass on.
[00:09:31] And the big wave of estate transfers is going to land in the2030s to the2040s. So we know when the big transfer is going to be and we know what it's going to be. And the planning and the relationship building, the positioning all needs to happen now. You can't just show up and 2030 or 2040 and try to win the business. You've got to plan ahead for that right now. So the timing of the transfer doesn't wait until death.
[00:09:58] It's happening as we speak.
[00:10:01] So helping kids buy homes, pay tuition, fund businesses, that money's going to the next generation. So you need to look at where that money may be going whether you're in financial services, whether you're in insurance, whether you're in senior living because the kids are paying for senior care or whether you're in consumer products or other types of services.
[00:10:21] So there's some other drains to this as the, as the money is coming out and the clock is running. And one of those I just mentioned which is health care and senior care. So the boomers are entering their 80s and that's their big expenses on healthcare and long term care.
[00:10:37] When you look at the median annual cost of a private nursing home, it can be over $100,000 a year now and it keeps climbing. And so healthcare spending is going to be the single biggest drain, the single biggest variable affecting how much actually is going to get passed to the heirs.
[00:10:54] So what it means for profitable revenue growth. Well for industries if you serve the older population, health care, home care, assisted living, hospice, medical devices, you've got enormous near term demand. And again it's not just going to come to you. You're going to plan for that, you're going to have to position for that. We do a lot of work in the senior care industry and the senior care industry is very competitive is it's all about customer experience and seniors today are looking for very different things than they did years ago in terms of quality of life, community, things of that nature. So they're going to have to win that business. The longevity economy, if you think about senior care is around $8.7 trillion in global spending today and it's projected to hit about 15 trillion by 2030. So it's big financial advisors. I mentioned the window to position for the the boomer wealth planning is narrowing so they're transferring wealth now. They're not waiting till 2030 or 2040.
[00:11:53] The, the these clients are alive today so they can make decisions. You don't have to wait till it happens and wait till their kids don't know you and they're, they're making the decision and the beneficiary children are also here today and you can create that next generation relationship signal. 3 the wealth is concentrated.
[00:12:13] So numbers like 105 trillion are huge numbers but it's not spread over the entire country. It's concentrated in specific places that we can understand and we can focus on as businesses. Here's some interesting stats on where the wealth is 2% of the US households are going to account for about 50% of all the transfers. So these are the high net worth and ultra high net worth families.
[00:12:39] That's roughly $62 trillion, around the top 7%. So that's households with at least a million in investable assets are going to account for 68% of total wealth transferred. So right there we've taken up a huge chunk of it. Just with those first two groups on the other end, the bottom 50% of the boomer and silent generation households, they're going to pass down about 6 trillion collectively.
[00:13:03] And so when you put it all together, there's only about 22% of the baby boomers that actually plan to leave an inheritance. So a lot of money, but you've only got about 22% that say they're going to leave something in the next generation. So almost 80% of Americans are going to receive little or nothing.
[00:13:22] So from a geographic perspective, we look at it from that angle.
[00:13:25] The boomer wealth sits in mostly the coastal markets and the major metros and in the sun belt retirement spots. And as one example, in Florida, just on the west coast, if you look at cities like North Port Bradenton, Naples and Cape Coral, the retirees there own around $97 billion in real estate. So some huge numbers that's not even looking at at Miami or other major metros in Florida.
[00:13:51] So what does it mean for profitable revenue growth? Well, the highest value opportunity isn't the mass market, it's the affluent and the high net worth segment.
[00:13:59] It's that 22% that I mentioned earlier that plan to pass assets in the next generation. So you've got 1.2 million individuals with a net worth above $5 million and they're projected to pass down more than 38 trillion over the next decade. So we can focus in very specifically on where that's going to come from.
[00:14:18] For financial advisors, they need sophisticated estate planning, trust services, family governance, tax optimization.
[00:14:25] It's way beyond a standard financial plan because you're going to have that next generation that's going to receive substantial ass.
[00:14:31] And we'll talk about what those assets are in a minute. But they're going to have to have sophisticated planning to know what to do with it. For real estate developers, retailers, consumer businesses that are wealth adjacent geographically, the retirement markets, like I mentioned, the coastal, the metro markets, the Sunbelt markets, those retirement markets are also the inheritance origin markets. So when those assets are received and those assets are not going to all be cash, a lot of those are going to be located in those markets, and they're going to be opportunities in those markets. So if those assets are real estate as an example, they are going to be sitting in that in those markets, and those markets are going to have an opportunity around those assets.
[00:15:11] So, so these locations shape where the heirs are going to sell their property and where they might reinvest it as well.
[00:15:18] For consumer goods, companies focus on what I call the mighty middle. So it's not just the high net worth.
[00:15:25] The people who will get a modest but a meaningful inheritance can make big behavioral changes. So even somebody that gets $50,000 in inheritance can accelerate a home purchase, they can fund a business, or they can do new types of investment. So it's not just the alternate high worth that have that opportunity.
[00:15:46] Signal 4 There are different types of assets. Real estate and equities are going to be the big ones. So financial assets, equities, mutual funds, pensions, they're going to be about 29% of the total holdings. And real estate, if we just look at it, net of mortgage debt, it's going to be another 23%.
[00:16:06] So together they're more than half of what's being transferred. So they're roughly equally balanced. And the form of the asset determines how and when the transfer is going to happen and what's going to happen to it.
[00:16:16] And what's interesting is there's actually a cycle between the two, between the financial assets and between the real estate.
[00:16:23] So the financial assets or equities pass cleanly. They can be sold, they can be diversified, they can be reinvested within months.
[00:16:32] And there's about 20 trillion sitting in tax deferred retirement accounts. And you've got, as I mentioned before, the required minimum distributions that are moving hundreds of billions into senior spending and giving right now on an annual basis.
[00:16:45] So equities pass. Clearly they can be sold, they can be diversified, they can be reinvested in a matter of months. There's about 20 trillion sitting in tax deferred retirement accounts. Equities pass pretty cleanly. They can be sold, they can be diversified, they can be reinvested within a period of months. You've got about 20 trillion sitting in tax deferred retirement accounts. A lot of those you got required minimum distributions that are moving hundreds of billions into senior spending and giving on an annual basis.
[00:17:13] So that money in equities, that money in financial assets tends to flow into consumption or reinvestment fairly quickly after it's been transferred.
[00:17:24] But real estate, the other type, is a bit messier. So you've got factors of distance and location, where the property sits. You've got capital gains issues. So if, if a property is received as an inheritance, sometimes the recipient has to pay taxes on it. You've got carrying costs to maintain the property. You've got to figure out what to do with it. You've got to work to manage that property. And a lot of people decide they don't want to hold on to those properties. So most of the $2.4 trillion that's going to be inherited over the next decade in real estate will be sold rather than retained, which means it gets converted back into cash. That has to go somewhere back into those financial assets. So you can see the cyclical relationship here. What does this mean for profitable revenue growth?
[00:18:09] Well, let's look at some industries for real estate professionals. Right now inventory is being held back. About 80% of retirees say they don't want to pass along the assets while they're still alive. Which means there's going to be a pent up supply when these people pass away.
[00:18:26] So when it's passed along, it's going to happen quickly and it's going to go right into the property market.
[00:18:31] For financial institutions again, building the next generation of relationships, creating holistic solutions. Because the heir, the person who receives that money, that walks in with a mix of things like real estate and securities and retirement accounts, they're going to need integrated advice across areas like taxes and how to liquidate assets, how to put together a portfolio, how to move real estate into cash, for example.
[00:18:58] And for insurance companies, people that inherit who sell the property and end up with proceeds looking for income might find annuities or life insurance vehicles like whole term life. They might be options.
[00:19:10] Signal 5 is about the cascade. And so the cascade means that it's not just one lump sum coming from one generation to the next. This is very interesting. You've got a cascading from one generation to the next to the next.
[00:19:24] And it flows to each level differently. So generation X is going to receive inheritance first. Those are the people between 45 and 61. So they're going to inherit about $14 trillion over the next decade. And if you think about this generation, they're the ones that took the deepest hit in 2008 as a whole, they lost 38% of their median net worth.
[00:19:44] And they've been pragmatic about money ever since.
[00:19:48] So these people are going to be in their 50s as a midpoint when they receive these inheritances and they're going to be right in the midst of retirement planning at that point. So they're probably not going to be spending it as if they were younger. They're going to be looking for, how do I do retirement planning now that I've received that inheritance? So that's a pivotal moment for them.
[00:20:08] The millennials, those are the people between 30 and 45 today. They're going to get the most. They're going to ultimately inherit about $46 trillion by 2048.
[00:20:19] So these are the ones that are the big student debt holders.
[00:20:22] They've got 1.5 trillion in collective student debt.
[00:20:26] They've experienced two recessions before the age of 40.
[00:20:30] They had a housing market where median prices rose more than 400% between 1990 and 2024. And they didn't necessarily get to take advantage of that.
[00:20:39] And this is the generation that's been feeling it. And this is their first real foothold in terms of building assets through inheritance. So it's going to be a big opportunity for them. And again, they're a bit younger than Gen X, so their needs will be a little bit different. They're going to be doing retirement planning, but they may also be thinking about different uses for that money than the prior generation.
[00:20:59] And then Gen Z ultimately is going to get about what Gen x gets, about $15 trillion. But it's going to arrive during their prime earning years. And here's something that surprised me. The average Gen Z investor thinks a lot differently about investing than the baby boomers did, or Gen X or the Millennials. They made their first investment at age 20, and for boomers, that average was age 31. In fact, I remember we didn't. We couldn't make online investments because we didn't have online. There was nothing online. You had to go to a broker. How do I get a broker? Right. So it's very different now. They go on in their day trading, and so it's a very different generation. So Gen Z is getting a start earlier and they've got a lot of Runway, so it's very exciting for them.
[00:21:45] And then there's another layer that's hugely important that you can put on top of all the generations, which is gender. Women are going to be the inheritors in disproportionate numbers because wives statistically outlive husbands. We're going to have $54 trillion moving horizontally to widowed women before flowing in the next generation.
[00:22:05] So when you think about your products, your services, your offers, if they're designed around a male audience or male clients, especially in the investment area, you're going to have to rethink that because you've got a gap there. So you've got a lot of opportunities you need to think about in terms of how to serve your female clients.
[00:22:23] And Signal 6 will they spend it or will they save it? So we get to the big question here. So when the money lands, what happens?
[00:22:31] The early evidence is a little more positive for the financial services and financial companies and investment companies than for consumer companies companies.
[00:22:41] A citizens bank survey found that 60% of inheritors plan to invest part of any windfall and 51% plan to use it to pay off debt. Remember all that debt and that student loan debt?
[00:22:53] They're not racing out. They're not buying new cars or dream vacations, at least initially. So they're taking care of business.
[00:23:00] Values matter, especially for millennials and Gen Z.
[00:23:04] So unlike us baby boomers, they think a little bit differently. So 72% of wealthy millennial and Gen Z investors believe you can't get above average returns from traditional stocks and bonds anymore.
[00:23:16] They're more open to private equity.
[00:23:18] Direct investments in companies, impact funds and alternatives and things like ESG influence 82% of investors between the ages of 24 and 43 compared to 41% of all investors.
[00:23:32] So as their assets grow, the direction of capital is going to shift. So they're thinking about what's being done with that money versus just what the returns are.
[00:23:40] Long term care is another important area. As I mentioned before, with assisted living costs, it's going to take a big chunk of wealth before it's transferred.
[00:23:48] And the inheritors expect to pay too. So 53% of millennials and Gen C, they expect to be financially responsible for their aging parents. 52% say it's already affecting their financial planning.
[00:24:00] And here we have what's widely called the sandwich generation, the generation taking care of kids and parents at the same time.
[00:24:08] What does it mean for your profitable revenue growth? Well, some of the same industries are going to benefit investment managers, fintech firms, consumer companies, positioning to the inheritors, senior care institutions and to follow the flows. The retail banks are going to have a unique view. They can watch the deposit flows when inherited assets show up, which is cash from sold real estate or brokerage transfers or estate checks. They typically sit in checkings and savings accounts before they're being allocated out to other places. So there's a period of time the bank holds those assets. So the bank that holds those assets for that 90 day window after a transfer has the highest conversion opportunity to other financial services offers. And if you can get any visibility on those bank flows, that will tell you something about money that's sitting and ready to be reinvested, spent or redeployed.
[00:25:01] Your call to action. So let me bring this home. The great generational wealth transfer is not a trend to watch. It's a structural shift. It's already reshaping markets. We can see it moving. We can plan for it, but we have to plan for it. We can't wait till it just gets here. And so look at these signals from two angles. How are they going to affect your customers and their ability to grow? And how they're going to affect your own business and your customer base, your product mix, your distribution model and your competitive positioning. And if you take one thing from this episode, take this don't be the company that wakes up in 2035 wondering where the next generation of clients, customers, assets and spending went. You've got to plan ahead for it. If you'd like to talk about what it means for your business, reach out to us at infoalesglobe.com or visit
[email protected] this has been Sales Globe Signals. I'm Mark Danolo. Thanks for listening and we'll see you next time.
