Visa Business and Economic Insights released a projection last week estimating that $36 trillion in baby boomer wealth will transfer to Gen X and millennials over the next 20 years, a figure significantly lower than Cerulli Associates' estimate of $105 trillion passing from older generations to heirs by 2048. The $60 trillion gap stems from fundamental methodological differences: Visa focuses exclusively on baby boomer wealth available for consumer spending after removing debt, top 1% fortunes, retirement spending, and charity, while Cerulli examines total wealth transfers across all generations including the ultra-wealthy. The competing estimates highlight the importance of these projections for wealth managers and companies preparing for generational wealth shifts.
Visa Strips $57 Trillion from Baby Boomer Wealth Calculation
Visa started with $93 trillion in total baby boomer wealth and removed $57 trillion through a series of deductions. The company subtracted $5 trillion in liabilities including mortgage debt, $28 trillion held by the top 1% (those with at least $12 million in wealth), $16 trillion for baby boomer retirement spending, and $8 trillion for charity and taxes. "We wanted to go through and inspect how much money will actually be spent," said Wayne Best, chief economist at Visa. "A lot of people think about the $93 trillion or $124 trillion and think 'All that money's going to be available for spending; this is going to be incredible.'" Of the remaining $36 trillion, Visa estimates $28 trillion will go to savings and investments, with $8 trillion directed to consumer spending on cars, homes, travel, and retail.
Cerulli Projects $106 Trillion to Heirs Across All Generations by 2048
Cerulli Associates calculated $124 trillion in total transferrable wealth across all generations, subtracting $18 trillion for charity to arrive at $106 trillion passing to heirs and spouses by 2048. Chayce Horton, Cerulli's associate director of wealth management, said half of the transfers will come from high net worth or ultra-wealthy families. The firm estimates $4 trillion will initially transfer to spouses, primarily women, before passing to children and other family members. "When you look at that demographic, on average, spouses are a couple years younger, and those spouses live a couple years longer," Horton said. Cerulli factors in retirement spending, taxes, and debt in its calculations, and notes that one of every four wealth management clients currently come from inherited wealth.
Gen X to Receive $14 Trillion in Next Decade, Millennials $46 Trillion Over 25 Years
Gen X will inherit $14 trillion in the next 10 years as the first major recipients of the wealth transfer, according to Cerulli. Millennials will eventually inherit the largest amount at $46 trillion over the next 25 years, followed by Gen Z. Horton emphasized the importance of wealth managers maintaining relationships across spousal and intergenerational lines. "The focus of our report when we do this analysis is understanding where the wealth is today, and where that wealth will be moving tomorrow so the wealth and asset management industry can adapt," Horton said.
FAQ
Why do Visa and Cerulli's wealth transfer estimates differ by $60 trillion?
Visa focuses exclusively on baby boomer wealth over the next 20 years and removes the top 1% fortunes ($28 trillion), retirement spending ($16 trillion), debt ($5 trillion), and charity/taxes ($8 trillion) from $93 trillion in total boomer wealth, resulting in $36 trillion. Cerulli examines all generations through 2048, includes ultra-wealthy transfers, and subtracts only $18 trillion for charity from $124 trillion in total transferrable wealth, leaving $106 trillion for heirs.
How much will millennials inherit from the great wealth transfer?
Cerulli Associates estimates millennials will inherit $46 trillion over the next 25 years, making them the generation that will eventually receive the largest share of transferred wealth, more than Gen X's projected $14 trillion over the next 10 years.
