Magazine article The Futurist

Huge Wealth Transfer Predicted: Bequests May Be Safe, despite Recession and Longer-Living Benefactors. (Economics)

Magazine article The Futurist

Huge Wealth Transfer Predicted: Bequests May Be Safe, despite Recession and Longer-Living Benefactors. (Economics)

Article excerpt

At least $41 trillion will transfer from parents to children and from philanthropists to charities in the next 50 years, according to the Social Welfare Research Institute (SWRI). It will be the largest wealth transfer in history, the research group claims.

This forecast, four times higher than the previous highest estimate of wealth transfer, is expected to hold in spite of increased life spans, recession, and other recent economic conditions.

Contrary to expectation, personal wealth has not dropped significantly below the 1998 estimate of wealth. World War II and baby-boom generations will be giving away just as much wealth as their predecessors.

The researchers looked at how increased life span would affect the wealth transfer and found that people's increased consumption at the end of life is being balanced by other trends, says SWRI's John Havens. "Two of the most important are later retirement age and the increased tendency for the elderly to work at least part time during retirement."

Havens also says that retirees can easily spend a larger chunk of their wealth without affecting the wealth-transfer estimate, meaning that the $41 trillion figure could be a conservative one. "The relevant question is not whether $41 trillion will be transferred, but how much more than $41 trillion will be transferred, SWRI researchers write. …

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