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“The Great Wealth Transfer:” How Women Should Be Preparing for Their Financial Futures

“The Great Wealth Transfer:” How Women Should Be Preparing for Their Financial Futures

May 13, 2024

A seismic financial shift is coming, and women stand to be the beneficiaries on an unprecedented scale. Dubbed the "great wealth transfer," this phenomenon is poised to reshape the global economy and society as trillions of dollars change hands from older generations to their heirs.1 This is poised to be one of the largest intergenerational transfers of wealth in history, coming in around $84 trillion (yes, that’s trillion with a “t.”) What’s interesting to me is that, central to this transformation, is the increasing role of women as both inheritors and stewards of wealth. This seismic shift, as I see it, holds many significant implications for women across our financial lives from retirement to generational wealth to philanthropy to the economy at the broader scale.

Let’s unpack it.

The Great Wealth Transfer By the Numbers

The scale of the great wealth transfer is nothing short of staggering. That $84 trillion in assets set to transfer is roughly three times the annual U.S. GDP for 2023.3 Significantly, women are expected to inherit a considerable portion of this wealth, with projections indicating that by 2030 they will control around $68 trillion changing generational hands.4

I believe that this is an unequivocally important moment for women and how we think about and act upon our financial power. Indeed, I think of it as a watershed moment in my career as an advisor.

I’ll tell you why.

Closing the Gender Wealth Gap

Despite recent financial progress by women that I’ve written about before, the gender gap persists. Women generally have lower levels of wealth and financial assets compared to men, a disparity that is influenced by factors such as gender pay gaps, caregiving responsibilities, and lesser access to financial resources and education overall.5 But this seismic shift in financial control may go a long way toward leveling the playing field for women.
As an advisor and a woman, I believe it’s not just my job but my duty to work as hard as I can to work toward that aim, for my clients and for culture as a whole.

I can do that in a few ways.

Preparing for Inheritance

Estate planning, while important, will only take you so far. I’d argue that crafting a plan to sustain and grow that wealth is as important –if not more so – than the estate planning itself. This is true regardless of gender. And the data bears this out. A recent article in Kiplinger reported that, ”studies have found that 70% of the time, family assets are lost from one generation to the next, and assets are gone 90% of the time by the third generation.”6

And I think the worst part of a statistic like that is that it’s largely avoidable, with the right planning and trustworthy financial advice.

While there are plenty of ways to lay the foundation for this -- including open and honest, intergenerational communication, and, raising financially-informed kids of your own— constructing an informed team of professionals you trust is top on my list. This list would include advisors, attorneys, tax professionals, for example. It’s also worth noting that the way inheritances are bequeathed subsequently handled can vary in terms of legal and tax implications, particularly for married couples. So, getting sound advice is key. If you already have one of these professionals you trust, you can start there by asking for a referral. But always do your due diligence by interviewing more than one. A little bit of legwork up front can potentially save you a lot of headaches down the line.

Philanthropy and Social Impact

Women's increasing control of wealth also has profound implications for the future of philanthropy. Research has shown that women generally engage in charitable giving in larger numbers than men, regardless of wealth level.7 It stands to reason, then, that as women come into more wealth and assuming a greater amount of financial power, charitable giving can anticipate a bump in financial engagement and volunteerism.

As you think about your financial future and planning for a generational transfer in your family, it can be helpful to get ahead of philanthropic or charitable goals you and your family may have and plan for those in advance. Again, I always recommend doing so with an advisor you trust.

On balance, the coming “great wealth transfer” represents an historic opportunity for women and the families we are planning and raising. As women inherit and control a growing share of global wealth, we have the potential to inform investment practices, close the gender wealth gap, and drive meaningful social impact.

Information is key, so make sure you educate yourself.

1 “The Great Wealth Transfer: What It Means For Women And For The World,” by Holly Corbett, Forbes, February 24, 2024.
2 “We’re in the midst of the ‘great wealth transfer’: How some Gen X, millennials, and Gen Z are getting rich,” by Sam Becker, Fast Company, January 26, 2024
3 Bureau of Economic Analysis, February 28, 2024
4 “The $68 trillion great wealth transfer is ‘an unprecedented time’ for women, advisor says. Here’s why,” by Jessica Dickler, CNBC, December 12, 2023
5 “Gender pay gap in U.S. hasn’t changed much in two decades,” by Carolina Aragao, Pew Research, March 1, 2023
6 ‘Five Strategies to Keep Your Heirs From Blowing Their Inheritance,” by Anne Kates Smith, Kiplinger, January 19, 2024
7 “Appealing to Women Donors,” The Chronicle of Philanthropy