Why Millennials Are F*cked [Wealth Transfer LIE]

[00:00:00]Millennials are about to receive the largest  wealth transfer in history. Over the next 20 years, more than $100 trillion will be  passed down from parents to their children.

[00:00:11]It sounds almost too good to be true. And  that's because it is. Because for most, the money will arrive too late. Others will  receive far less than expected. And for some, that money will never arrive at all. So today,  we'll show you why the so-called great wealth transfer is nowhere near as great as it seems,  who will actually receive the money, and how millennials are getting royally screwed. My name  is Nick, and you're watching the Finance Bureau.

[00:00:44]Okay, for starters, we need to get an idea of  the scale here. It's estimated that around $124 trillion worth of assets will be handed down  by older Americans to their heirs and charities between now and 2048. According to a report by  Cerulei Associates, around $18 trillion is set to go to charity, leaving a whopping $15 trillion  to be passed down, mostly through inheritance. And this makes it the single biggest intergenerational  transfer of wealth in human history. Now, the majority of that $15 trillion is expected to  be handed down to Generation X, which is those born between 1965 and 1980, and millennials, which  is those born between 1981 and 1996. Specifically, Gen X are expected to receive around $39  trillion, while millennials are expected to inherit roughly $46 trillion. But why is the  amount being passed down at record highs? Well, there are three main factors at play over here.  The first is basic adjustment for inflation.

[00:01:47]In 2020, it was projected that baby boomers,  those born between 1946 and 1964 and the silent generation before them, would pass down around $84  trillion. And that number has since been um well, should we say inflated to over $100 trillion.  And the second reason is that asset prices have exploded over the past few decades, especially  housing and equities. Asset prices exploded also more recently too between 2020 and 2023 during  the pandemic. Equities grew by 27% while real estate grew by 39%. And during that time total  US household wealth leapt from $ 108 trillion to 154 trillion. And the third reason is that older  generations have come to control a growing share of total wealth in the US and larger than the  rest of the US population. In 2020, they held 54% of US wealth. Just 3 years later, that share has  grown to 61%. In any case, for many millennials struggling to stay afloat, this wealth transfer  feels like an answer to their prayers. With over 100 trillion changing hands in the coming  years, they'll finally be able to pay off debt, buy a house, and build some retirement savings. No  need to worry then because they will be rescued by their parents' homes and investments. But as  I alluded to earlier, the reality isn't quite that. Before I tell you why though, you need to  know about the Finance Bureau weekly newsletter.

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[00:03:33]It's completely free and all you need to do is  click the link in the description or scan this QR code on the left of your screen. And now back  to the video. So then, why isn't the great wealth transfer as great as most people think? Well,  when people imagine receiving an inheritance, they often picture it arriving during the years  when the money would have the greatest impact.

[00:03:56]buying a first home, starting a business, or  investing early to take advantage of decades of compounding growth. But the thing is, guys,  inheritance usually arrives much later. Remember when I just said that the great wealth transfer  will happen between now and 2048. Well, by then, today's millennials will be between 52 and  67 years old. And that means they'll inherit this wealth long after the most important and  challenging years of their lives. They'll likely already have raised a family, bought a home, and  built wealth in some other way. And adding to that mix, people are living longer than ever. Global  life expectancy has risen dramatically over the past few decades. In many developed countries,  living into your 80s is increasingly common, and that's great for families, but it also delays  wealth transfer between generations. Now, don't get us wrong. Receiving a lump sum of cash at 60  can still be pretty useful. It could improve your retirement plans, help cover your medical bills,  or whatever else. But at that stage of your life, inherited cash has far less opportunity to reshape  your future since the biggest financial decisions were made decades earlier. The timing of wealth  matters almost as much as the amount, if not more.

[00:05:16]Time is arguably the most valuable asset in  investing since it gives your assets the space they need to really grow the way you want them to.  For example, imagine inheriting $200,000 at age of 30 and invest in it for the next few decades.  Thanks to compounding, that money has more time to grow, helping you to buy a home, retire  comfortably, or achieve other long-term goals.

[00:05:41]And now imagine inheriting that same $200,000 at  the age of 60. It's still a significant payout, but you simply don't have the same decades ahead  to benefit from that compounding. But here's something to really add insult to injury. Over  the next 10 years, millennials are expected to receive around $8 trillion. For generation  X, the generation before the millennials, that figure is $14 trillion. And this means  that Gen X will have more money up front and more time to invest it. In other words, Gen X  will be the biggest beneficiaries of the great wealth transfer despite receiving less overall.  Now, there's another reason why millennials may wait even longer to get that inheritance money.  Uh when most people think about inheritance, they think of an intergenerational exchange where  money is passed down to the next generation. But for most families, wealth doesn't move down,  it moves sideways. It moves intragenerationally instead. Instead of being passed down from parents  to their children, wealth more often passes to the surviving spouse. And that means the transfer most  people expect can be delayed by another decade and maybe longer. Married couples typically leave  their assets to each other through their wills, but legal rules apply when someone dies  without one. The family home, savings accounts, and investment portfolios usually remain under  the surviving spouse's control. After all, they still need somewhere to live and  enough income to support themselves, especially if they expect another 10, 20, or 30  years in retirement. The result though, guys, is that many inheritances happen only after both  parents have passed away. So, if one parent dies at 70 and the other lives until 92, their kids  don't get any money until more than 20 years after they originally expected. The delay changes  the role inheritance plays in people's lives. And as life expectancy continues to increase, that  difference becomes even more apparent. Of course, some parents try to solve this by giving money  away first while they're still alive. The catch is that these gifts depend on parents having enough  financial security first before they part with those assets. And this uncertainty leaves millions  of millennials in an awkward position. On paper, their parents own significant wealth. In practice,  they have little access to it, if any. And this ties into another reason why the great wealth  transfer might not be as impressive as it first sounds. Retirement costs. Because people are  living longer, they're also spending more time in retirement. And this means their savings have  to stretch further, making retirement itself much more expensive. And this can seriously eat into  the estate as someone retiring at 70 years old may spend the next 20 years or more relying on  pensions, savings, and investment income. Even households that accumulated substantial wealth  during their working lives can gradually spend down those assets over a lengthy retirement. After  all, that money's got to come from somewhere. But it's not just about basic survival. I mean, health  care is another major factor. Those later years often involve more medication, doctor visits,  and in some cases, hospital stays. The thing is, health care costs are higher than ever and  continue to rise. Now, for perspective, the average American spent over $9,500 per year  on health care in 2014. By 2024, that figure had soared 62% to just under $15,000. It's no wonder  that 51% of Americans worry about affording health care, while 42% are concerned about paying for  prescription drugs. The costs of extended medical treatment, home care, and assisted living can take  away huge chunks of a person's wealth during their final years. And housing is another major factor  here. Many people assume that the family home will eventually become their largest inheritance.  And sometimes that happens, but in many cases, the house is sold to help fund nursing home costs  and residential care. And that's no surprise once you realize how much it all costs. Now, for  those who spend retirement in independent living, the median cost is around $3,200 per month.  And this is for people who can manage a day-to-day life on their own and usually includes  housing, meals, housekeeping, social activities, and maybe transportation, but rarely personal  care or medical support. But for assisted living, where an elder person needs help with things  like bathing, dressing, meals, and medication, the cost is almost double at $6,200 per month. And  there may also be times when they need additional support due to conditions like Alzheimer's or  dementia. And in that case, the retiree lives in a specialized environment called memory care, which  can cost $6,700 per month. And for those who need aroundthe-clock specialist care, retiring in a  nursing home is more suitable. However, it's also the most expensive with the median cost ranging  between $9,500 and $10,800 depending on the level of care, of course. Obviously, we all want to make  sure that our loved ones are cared for in their final years. But there's no denying that this also  eats into the money that beneficiaries can expect to receive. And look, retirees have all their  right to spend their money and enjoy their golden years however they damn well please. They've  already spent decades working hard to support themselves and their families. So, we should allow  the older generation to live comfortably. What we shouldn't do, though, is rely on inheritance  money to pay for our own retirement. And yet, almost 70% of millennials are doing just that.  Now, even when a sizable estate survives through all of these retirement costs I just mentioned,  the amount beneficiaries actually receive can be much lower than expected. There are often estate  taxes, legal fees, probate costs, debts, and complicated property arrangements. All of which  can take a huge bite out of what's left before that money ever reaches the next generation.  Now, one common belief about inheritance is that governments can take a huge chunk before families  ever see that money. In the United States, though, that usually isn't true. Federal estate tax is a  massive 40%, but it only applies to the wealthiest households. In 2026, the federal exemptions is  $15 million per person, meaning the overwhelming majority of American families won't pay any  federal estate taxes at all. But that doesn't mean every inheritance goes untouched. Now,  different states across the US have their own estate and inheritance taxes, each with much  lower exemption thresholds. And depending where you live, these can reduce the value of an  expected inheritance long before it touches the next generation. But taxes are only part of the  puzzle. Before heirs receive anything, they first need to settle outstanding debts, including  mortgages, personal loans, credit cards, and medical bills. And these are usually paid from the  estate before any money reaches beneficiaries who inherit what's left. In other words, if someone  dies with huge liabilities, it's not just the assets they're passing on, it's the debt, too. The  legal process also takes some time, guys, because many estates go through what is called probate  under where the court oversees asset distribution, creditor payments, and validation of the will.  While some estates qualify for simpler procedures, larger or more complex estates can spend months  in probate before anyone receives anything. And of course, legal fees, court costs, and professional  advisers all add to the final bill. Real estate can add another layer of complexity. The family  home is often the largest asset in an estate, but turning that value into cash isn't always  straightforward. Heirs can and often do disagree over whether to sell, keep, or rent the property,  and some homes also have outstanding mortgages or need major repairs. And although house prices  are rising, that doesn't necessarily make them easier to divide. By the time debts, taxes,  legal costs, and probate have been dealt with, the amount beneficiaries actually receive can look  very different from the estate's headline value.

[00:14:38]The great wealth transfer may be measured in  trillions of dollars, but individual inheritances often end up being uh underwhelming, to put it  politely. And now we get to one of the biggest misconceptions about the great wealth transfer.  The idea that it will lift an entire generation.

[00:14:57]In reality, wealth is never distributed equally  and inheritances are no different. That's simply because families with valuable homes, businesses,  and investment portfolios can pass on far more than families whose wealth is more limited.  And when it comes to the great wealth transfer, it's not like the numbers are skewed just a little  bit. It's estimated that out of the $ 105 trillion that will be passed down, a massive $62 trillion  will come from high netw worth and ultra high netw worth households. That's more than 50% of the  total coming from just 2% of all households in the US. That's crazy. And to make things worse,  this imbalance also affects the amount that each person is expected to get. The average expected  inheritance is somewhere between $320,000 and $335,000. But that's only because rich households  push the number up. Most people will get nowhere near this. In fact, it's highly likely that around  50% of Americans won't inherit anything at all.

[00:16:07]But that doesn't mean that middle-class families  won't leave an inheritance of some kind. Many will pass on homes, retirement accounts, or  savings that make a genuine difference to their children. The point though is that there's a huge  difference between inheriting, say, $10,000 and inheriting a paid off home and a sevenfigure  portfolio. For just a handful of millennials, the great wealth transfer will be absolutely  lifechanging. For millions of others, though, it will be little more than a small financial  boost. This may be the so-called great wealth transfer, but it's certainly not the great wealth  distribution. Just a small number of recipients, those from families with lots of money already,  will receive lifechanging gains. And this helps to explain why so many economists tend to focus on  wealth inequality rather than income inequality.

[00:17:01]Two people can earn the exact same salary, but  they can have dramatically different financial futures if one inherits a substantial wealth while  the other receives very little. And this is where the great wealth transfer becomes much bigger  than inheritance itself. And that's because it underscores how these days financial success isn't  just determined by your salary or your career.

[00:17:25]It also depends on whether your family is in a  position to provide financial support long before inheritance even enters the picture. Across the  US, family support has become an important factor in buying a home as some parents help with the  down payments. Others allow adult children to live with them rentree while they save or they  contribute money toward closing costs. And this usually happens decades before any inheritance  at the point when this support makes the most difference. And that advantage compounds over  time. Someone who gets help buying their first home at 28 starts building equity immediately  and benefits as house prices continue to rise.

[00:18:06]Someone without that same support network can earn  exactly the same salary but spend years renting while saving for a down payment. By the time  they eventually do buy, assuming they ever do, the gap in accumulated wealth will be huge. And  it's not just in housing. Wealthier parents are generally better positioned to help pay for  college, provide emergency financial support, or even help the next generation start a business.  Together, these advantages create very different financial paths with those who receive support  building wealth considerably faster than those who don't. Put simply, the great wealth transfer  could make financial inequality even more apparent. The irony though is that millennials  are often told to work harder, save more, and invest consistently. And to be clear,  those things are important, but family wealth is becoming more important for future financial  success than it was for previous generations.

[00:19:05]Despite the headlines, the great wealth transfer  isn't the financial rescue that millennials have been hoping for. It's a redistribution of wealth  within families, not across an entire generation.

[00:19:18]Many will only receive a modest inheritance later  in life. Others won't inherit enough to change their financial position in a meaningful way,  and millions more won't inherit anything at all.

[00:19:31]If anything, the great wealth transfer could  leave millennials even more divided than they are today. Wealth generates more wealth. Those  who will benefit most will be able to grow their wealth exponentially, while those who inherit  very little or indeed nothing will be left behind. This could make the K-shaped economy  even worse than it already is. And of course, this also means that the great wealth transfer  won't solve the affordability crisis that many millennials are facing. Housing prices won't  suddenly become cheaper. Student debt won't just disappear. And wage growth won't accelerate  just because wealth is changing hands. Those problems will still remain. And what might all of  this mean for the markets, you might ask? Well, that really depends on how millennials spend  their inherited wealth. But because the older generation seems to be shifting towards passing  money down now while they're still around, this suggests that the impact on the market could  be felt sooner than 2048. Some millennials will stick to investing in the same assets as their  parents, like stocks, bonds, and real estate.

[00:20:38]However, a survey with the Bank of America  found that 72% of wealthy millennials and Gen Z believe it's no longer possible to make above  average returns by only investing in traditional assets like stocks and bonds. In fact, wealthy  investors aged between 21 and 43 would rather invest in higher risk alternatives like crypto  and private equity. Alternatively, they'd rather make direct investments in companies, not just  their stocks or start a company of their own.

[00:21:09]As for the non-wealthy individuals that can't  afford to take on such risk, the great wealth transfer is more likely to cause frustration than  anything else, as they see their peers benefit from the biggest transfer of wealth in human  history while they get left behind. All right, folks. That's quite enough from me today, but  we want to hear from you. Are you expecting to inherit a small fortune, or are you one of the  millions of people that will be watching this one from the sidelines? Let us know your thoughts in  the comments down below. And if you want to learn more about how the government is being controlled  by corporate lobbying, then you can check out our video right over here. And if you want to see  why the housing market is about to collapse, then check out this video right over here. Thank  you all for watching and I'll see you again soon.