Generational Divide: Millennials and Gen X Want to Share Wealth Now, Boomers Prefer to Wait Until Death
A recent survey conducted by Charles Schwab has revealed a significant generational divide in how affluent Americans view the transfer of wealth to their heirs. Millennials and Generation Xers are keen to share their wealth during their lifetimes, whereas Baby Boomers tend to prefer waiting until after their deaths.
The survey, which included over 1,000 Americans with at least $1 million in investable assets and was released in December, found that wealthy Millennials and Gen Xers were more than twice as likely as Boomers to agree with the statement, “I want the next generation to enjoy my money while I’m still alive.”
Nearly half of Millennials (50%) and 44% of Gen Xers expressed this sentiment, compared to only 21% of Boomers. Conversely, 45% of Boomers indicated that they want to enjoy their money for themselves while they’re still alive, a perspective shared by just 15% of Millennials and 11% of Gen Xers.
This survey highlights a clear contrast between the generations, especially regarding the timing of wealth transfer. Younger generations are more inclined to see the benefits of sharing wealth during their lifetimes, while older generations appear more reserved, preferring to leave their wealth behind after they pass away.
Michelle Crumm, a certified financial planner based in Ann Arbor, Michigan, points out that Millennials and Gen Xers often face greater financial challenges and have limited access to resources. “It’s the 20- and 30-year-olds who need it the most,” Crumm explains. “Those two decades are the ones that have the highest needs and the lowest ability to have any money coming in.”
This generational divide also highlights the changing landscape of financial planning. Younger Americans are driven to pass on wealth while still alive, leading to a shift in wealth management from traditional stock picking to a more family-oriented and values-driven approach.
While Millennials and Gen Xers are generally more willing to share their wealth, many Boomers tend to be more cautious. Research, including a report from Northwestern Mutual, indicates that only 22% of Boomers anticipate leaving an inheritance, in contrast to 38% of Gen Zers and 32% of Millennials who expect to inherit.
Some Boomers, like a client of Crumm’s, resist the idea of giving away their wealth while they are still alive. Their reasons vary, from a reluctance to spend to a desire to maintain control over their financial situation. Financial planners observe that many Boomers are concerned about outliving their savings, which may explain their reluctance to transfer wealth before they pass away.
Another reason for the wealth transfer gap is the challenges younger generations face in achieving traditional success markers, such as homeownership. Federal data reveals a significant rise in home prices during the pandemic, coupled with increasing childcare costs, making it harder for Millennials and Gen Xers to accumulate wealth.
Consequently, younger generations are more inclined to seek financial help from their parents. A 2024 Pew Research report found that 60% of parents with adult children have provided them with financial support, often at the cost of their own financial stability.
The trend toward more immediate wealth transfer reflects broader changes in financial planning. Nowadays, financial planning is more centered around family, with advisors engaging in conversations about values and long-term objectives, rather than just focusing on investment strategies.
Wealthy Millennials and Gen Xers, in particular, are increasingly shaped by these discussions with financial advisers, who encourage them to consider the purpose of their wealth and how it can benefit future generations while they are still alive.
As financial planning continues to evolve, it appears that younger generations are leading the way in this shift.
