A massive transfer of wealth from baby boomers to Gen Xers and Millennials is currently underway, but a new report from CNBC reveals that many may not receive as much as they expect. The main culprit? The overwhelming cost of health care.
According to a recent analysis, the cost of health care will drain the wealth of most baby boomers before they can pass it on to the next generation. A report from Fidelity estimates that single individuals who turn 65 in 2023 may need around $157,500 saved after taxes to cover their medical expenses in retirement. For couples, that number jumps to $315,000 saved.
In comparison, a 2023 survey from the Transamerica Center for Retirement Studies found that baby boomers have a median savings of $289,000, while Gen Xers have $82,000 saved and Millennials have just $49,000 saved.
Despite the ongoing wealth transfer, CNBC questions who will be “rich enough to endure illness” as health care costs continue to rise. A study from Cerulli Associates predicts that 42% of the wealth transfer will come from high-net-worth households, who make up only 1.5% of all households.
The reality is that health care for the elderly is incredibly expensive and often wipes out people’s life savings. As the transfer of wealth progresses, it’s becoming clear that many may not receive as much as they had hoped for. Stay informed by subscribing to email alerts from The Daily Hodl and following them on social media.
