Women will be in control of a large portion of the trillions of dollars soon to be moved in the Great Wealth Transfer.
The Great Wealth Transfer is set to occur as aging baby boomers die and leave an estimated $84.4 trillion in assets to their heirs. The money will likely go to Gen X and millennials though about 2045.
While 57 percent of millennials said they’re set to inherit $1 million or more in the Great Wealth Transfer, according to a new study from Equitable, a group that is even more likely to reap the benefits of the trillions left over by boomers is women.
Many billions are going to women as inheritance. Statistically, as men tend to die earlier, much of it will be spousal benefits following the deaths of baby boomer men.
Women are set to inherit billions of dollars during the upcoming Great Wealth Transfer.
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Roughly, 34 percent of pre-retiree women said they expected to receive more than $1 million, according to the 500-person survey.
Some of the women will need to start an investment portfolio. According to the report, 68 percent of women aged 55 and older do their own investment research. Meanwhile, 81 percent of women between the ages of 35 and 44 said they were interested in taking control over their investments.
“As unappealing as it is, those set to benefit from the Great Wealth Transfer are going to have to develop a game plan for how to use their inheritance,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“So many believe they would manage a lump sum properly, but data shows us otherwise. Much like lottery winnings, inheritance amounts can be squandered in just a few years if not budgeted to maximize their potential.”
Michael Ryan, a finance expert and founder of michaelryanmoney.com, said he became a financial planner after witnessing his aunt navigate her new finances as a young widow.
“When my uncle passed away unexpectedly at a young age, my aunt found herself in a situation that was all too common,” Ryan told Newsweek. “She didn’t even know how to write a check. Here was this intelligent, capable woman suddenly thrust into a world she wasn’t prepared for.”
Today, money is set to change hands rapidly, and it marks a “seismic shift” in who holds the economic power, Ryan said.
“Women generally live longer than men, which means they often inherit wealth from their spouses and family members,” Ryan said. “The days of women being excluded from financial decisions are long gone. With advancements in education and careers, women are increasingly taking charge of wealth management.”
Ryan said the transfer of wealth could end up making a dent in the gender wealth gap, and the uptick in financial resources could also increase the number of women-led start-ups.
But women in this position need to act now to protect their investments later. Ryan recommends working with advisers who understand the unique challenges and goals and thinking long-term when it comes to the new wealth.
“In my experience, women often excel at planning for the future,” Ryan said. “Leverage this strength to your advantage.”
LendingTree’s chief credit analyst, Matt Schulz, called the upcoming wealth transfer a “really big deal” for families and the larger economy.
“Since so few people have pensions anymore and so many people struggle to build their own savings because of just how expensive life is in 2024, this inherited money is nothing short of a godsend,” Schulz told Newsweek. “It is literally life-changing. It will allow people to contemplate retirement when they might not have been able to otherwise.”
The extra money also could allow Americans to afford medical treatment that was previously out of reach to dramatically impact their quality of life. But still, those who believe they’re going to inherit a substantial amount should tread carefully, Schulz said.
Regardless of what may be in your financial future, Schulz recommends Americans invest and build savings as if no inheritance is coming.
“My primary advice for those who think they’ll be receiving a big inheritance is that they shouldn’t count on it,” Schulz said. “It may sound strange, but the fact is that there’s no guarantee that you’ll see a cent of it. Medical emergencies can eat away at inheritances in a hurry. So can ill-timed stock market crashes.”
