You have probably heard about the "great wealth transfer." The idea goes something like this: baby boomers hold a mountain of money, and as they pass away over the next few decades, trillions of dollars will flow to their kids. It sounds like a massive windfall for younger generations.
But exactly how massive? That depends on whom you ask.
Two new studies take very different approaches, and they end up with numbers that are hard to reconcile.
The two studies are not measuring the same thing.
Cerulli looks at the whole picture. It counts wealth passing from older generations - including the Silent Generation, baby boomers, and Gen X - to heirs and spouses by 2048. It includes the richest families and does not subtract out what people will spend on themselves before they die.
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Cerulli's total transferrable wealth before charity is $124 trillion, and it estimates that about $18 trillion will go to charity, leaving $105 trillion for heirs. Millennials are set to be the biggest winners, inheriting $46 trillion over the next 25 years. Gen X will get about $14 trillion in the next decade.
Visa narrows the view. It only looks at baby boomers, not the Silent Generation or Gen X. And it goes through a step-by-step process to figure out how much of the $93 trillion boomers currently hold will actually be spent by regular people.
First, Visa subtracts $5 trillion for boomer debts like mortgages. Then it removes the top 1% of boomers - those with at least $12 million - because, as Visa's chief economist Wayne Best said, "They're buying yachts and airplanes. It's all great for the economy, but that's not what the average person really thinks of." That removes another $28 trillion. Then Visa takes out $16 trillion for boomer retirement spending and $8 trillion for taxes and charity.
What is left is $36 trillion. Out of that, about $28 trillion will go into savings and investments, and about $8 trillion will be spent on things like cars, homes, and travel.
Best put it plainly: "We wanted to go through and inspect how much money will actually be spent."
So which number is right? Both are, in a way. Cerulli's research is about where all the wealth is headed so the financial industry can prepare. As Cerulli's Chayce Horton put it, "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." Visa is asking a different question: how much of that money will show up as spending.
For investors, the key takeaway is not the top-line number. It is the behavior underneath.
A lot of the money that does pass down will stay invested. That $28 trillion going into savings and investments will find its way into stocks, bonds, and other assets. That is good for markets over the long haul. The $8 trillion in spending is also real - it is just smaller than the big round numbers you see in headlines.
Wealth managers are already shifting their businesses to focus on younger clients and on keeping relationships across generations. Horton noted that spouses are often a couple years younger and live longer, so firms need to think about who controls the money after one partner passes. Cerulli projects that $4 trillion will move to spouses first, then eventually to children and other relatives.
The bottom line: The wealth transfer is happening, but it is not going to feel like a tidal wave of cash hitting everyone at once. It will be gradual, uneven, and mostly invested rather than spent. For your portfolio, the steady flow into markets matters more than the size of the headline.
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