Homeownership Key to Baby Boomer Wealth Levels

Many Americans ages 18 to 42—68% of millennials and Generation Zs—are poised to inherit a collective $84 trillion from their baby boomer parents and grandparents in the coming years.

Real estate holdings are to thank for such robust savings among Americans in the 60-78 age demographic, according to experts.

“One of the primary reasons baby boomers’ wealth ballooned over the past several decades lies with homeownership,” writes personal finance author Julie Sherrier for USA Today in collaboration with Blueprint, an analytical comparison service.

“Home values have increased nearly 500% since 1983, when the first wave of boomers bought their first homes,” she notes. “When you also factor in investment growth, higher incomes and lower debt levels than their offspring, boomers have had the benefit of time and more favorable economic factors in which to increase their riches.”

Data analysts say 20% of beneficiaries surveyed plan to use their inheritance to pay off their mortgages. However, added the author, almost 76% of respondents expecting an inheritance said they will “sock it away for the future.”

In an expert-verified article, Sherrier expounded on the results of this survey, which explored what percentage of millennial and Gen Z adults expect to receive an inheritance, what percentage will not, and how this speculation impacts their plans for the future.

She explained that those who expect to receive an inheritance are looking at $320,000, on average.

More specifically, some 84% of survey respondents getting or expecting an inheritance anticipate receiving amounts of more than $100,000 or $200,000; 15% expect amounts over $500,000; and 6% expect upward of $1 million.

The majority of those who stand to inherit around $320K, 76%, say they plan to save or invest it, while another 40% plan to pay off other debts. That includes student loans (millennials and Gen Z hold roughly 36% of the $1.63 trillion of federal student loan debt) and credit card debt (about $5,649 for millennials and about $2,854 for Gen Z, on average).

In addition to cash inheritance, 62% of heirs to Boomer fortunes expect to receive real property. Additional transfers of assets could include cash, vehicles, or other investments.

A large number of young Americans, 33% of all respondents, already are, or expect to soon be, financially supporting their parents.

Finances, saving, homebuying, and debt management in many cases will be trickiest for adults in their 40s who are most likely to be both raising children under 18 while having parents over 65.

“As their children become young adults and as their parents’ health declines with age, this group may find themselves not only helping out their adult children financially, but also their parents,” Sherrier noted.

About 57% of survey respondents, including approximately 54% who have or expect to receive an inheritance, say they believe this so-called “great wealth transfer” will perpetuate existing wealth inequality in the U.S.

That’s backed by PEW Research and the New York Times, which has reported that the wealthiest 10% of households will benefit from this transfer the most.

For a more detailed breakdown of findings, methodology, and further commentary, visit USAToday.com.