Wednesday, March 19, 2014
In today's America, the top 1% of households owns about 35% of the nation's wealth, which is more than the entire bottom 90% does. However, this wealth inequality has not yet resulted in a big uptick in inheritances. Since the 1980s, the value of inherited wealth has only drifted upward slightly. In fact, wealth transfers as a proportion of net worth have fallen, from 29% in 1989 to 19% in 2007.
This will change once the baby boomer generation accelerates retirement, which will create a flood of princelings and some potentially worrisome consequences for social mobility in the United States, as the immense earnings of an already stratified economy are entrusted to a new generation. A study by the consulting firm Accenture identifies 2031 as the point when the transfer of wealth will peak. What's unclear is what the country will look like afterward.
See Annie Lowrey, What Comes After Rich Baby Boomers? Kids with a Big Inheritance, The New York Times, March 11, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) and Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.