The Global Wealth Report by UBS forecasts a momentous transfer of wealth worth $9 trillion between spouses globally in the coming decades, signifying a potential, unprecedented shift in global wealth. Women are predicted to play a crucial role in this wealth transfer, mainly attributable to a superior life expectancy.
This massive asset transition will significantly influence the world’s economic landscape, affecting investment strategies, philanthropy, and wealth management. Financial institutions must anticipate and adapt to these changes to remain efficient and valuable to their clients.
In a remarkable revelation, Millennials and Generation X are set to inherit an astounding $83.5 trillion. This immense generational wealth transfer may radically transform the economic landscape, providing significant investment opportunities. Therefore, it’s important for these generations to manage these inheritances prudently for sustainable growth and stability.
The majority of this wealth comes from those aged 75 or older, who currently hold a fifth of the world’s total wealth. This transfer of riches may significantly influence global wealth distribution and cause a vast shift in financial power, potentially impacting global investment patterns and market dynamics.
The report underscores the ‘horizontal’ transfer of wealth, where wives typically inherit before passing it down again.
Decades-long shift in global wealth impending
This pattern, driven by women’s longer lifespans, presents a distinct feature in the inheritance process. The ‘vertical’ transfer of wealth from parents to children often exacerbates economic disparities. It’s vital to comprehend these wealth transfers’ societal and financial implications.
Due to a longer lifespan and a younger age at marriage, women often inherit and pass on about 10% of the $83.5 trillion projected inheritance. Factors like higher life expectancy and younger age at marriage drive this trend.
The report divulges that climbing the wealth ladder in the U.S. is easier than falling, indicating a positive wealth accumulation trend. The number of American millionaires is expected to surge by 16% from 2023 to 2028, signifiering a continuous growth in affluence.
Despite a slight improvement in wealth equality since 2000, the U.S. continues to display a high income inequality index score, symbolizing persistent wealth disparity. The few continue to concentrate wealth, raising urgent concerns over the wealth gap that needs immediate attention.
