Boomer economy: The wealthiest generation and when that could change

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This week saw a high-profile Senate hearing on the looming social security crisis [https://seekingalpha.com/news/4569041-senate-budget-committee-explores-solutions-for-looming-social-security-crisis]. The Boomer generation is now deep into retirement… but continues to hold the most wealth in the U.S.

Baby Boomers, or people born from 1946 to 1964, in the U.S. have more than $88T in household wealth, according to recent data from the Federal Reserve.

That means Boomers account for half of the overall household wealth in the U.S. while making up just 20% of the country's population.

In contrast, Millennials — who were born between 1981 and 1996 and make up about 20% of the U.S. population — have a little over $18T in wealth.

To be fair, Boomers' wealth is not equally distributed. Boomer households overall owned $77T in wealth in 2022, of which 71% was held by the top 10%.

The generation's wealth gains were largely driven by housing affordability relative to their income, rising real estate values, significant bull markets (1980s, 1990s and 2010s), and defined benefit pension plans.

Spending in the demographic focuses on healthcare players like Pfizer (PFE [https://seekingalpha.com/symbol/PFE]), Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]), and Boston Scientific (BSX [https://seekingalpha.com/symbol/BSX]), as well as senior living stocks such as Welltower (WELL [https://seekingalpha.com/symbol/WELL]) and Ventas (VTR [https://seekingalpha.com/symbol/VTR]). Travel stocks like Expedia (EXPE [https://seekingalpha.com/symbol/EXPE]) and Carnival (CCL [https://seekingalpha.com/symbol/CCL]) have also been in focus due to plenty of disposable income.

But things are expected to turn around for Millennials and Gen Z (born in 1997-2012) over the next two decades with the so-called "Great Wealth Transfer."

Wealth transferred through 2048 will total $124T, of which $105T is expected to be inherited by heirs and the rest will likely go to charity, according to projections by consulting firm Cerulli Associates.

Gen X (born in 1965-1980) stands to inherit the greatest portion of assets in the next 10 years, totaling $14T compared to millennials' $8T. But Millennials are seen inheriting [https://www.cerulli.com/press-releases/cerulli-anticipates-124-trillion-in-wealth-will-transfer-through-2048] around $46T over the next 25 years — the most compared to any generation.

The "Great Wealth Transfer" will bring focus to wealth management stocks like Blackstone (BX [https://seekingalpha.com/symbol/BX]), JPMorgan (JPM [https://seekingalpha.com/symbol/JPM]), BlackRock (BLK [https://seekingalpha.com/symbol/BLK]), and Bank of America (BAC [https://seekingalpha.com/symbol/BAC]).

Here's a look at each generation's share in U.S. household wealth since 2015:
[Wealth distribution by generation]
Wealth distribution (Fed data)

MORE ON U.S. ECONOMY

* The Wealth Distribution [https://seekingalpha.com/article/4886245-the-wealth-distribution]
* Girding For Higher Inflation [https://seekingalpha.com/article/4886220-girding-for-higher-inflation]
* Mortgage rates continue to rise, but housing market is gradually improving [https://seekingalpha.com/news/4569440-mortgage-rates-continue-to-rise-but-housing-market-is-gradually-improving]
* CRFB proposes capping Social Security benefits at $100K for wealthy couples [https://seekingalpha.com/news/4568117-crfb-proposes-capping-social-security-benefits-at-100k-for-wealthy-couples]