Baby Boomer Wealth

Investment Analysis Clubs Macro Economic Trends and Risks
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{{ “It’s astonishing how their relative wealth has taken off in the last 30-plus years,” Wolff said. “They started out as among the poorest groups in terms of wealth back in 1983.”

The wealth of baby boomers — especially those in retirement — is a reflection of the uniquely favorable economic conditions that occurred during their working lives, Wolff and other economists said. So much so that it would be difficult for younger generations to emulate, especially as they are more likely to be weighed down by debt or child care costs. }}

free link:
https://wapo.st/43DtV7X

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I think it will be very difficult for my children (aged 45 and 40 respectively), to emulate my father or me in terms of raising a family and saving enough to retire comfortably. That is why I persuaded them to work hard, live within their means, save and invest throughout their working careers. In the meantime I am still nurturing and growing the modest inheritance I received from my parents ten years ago, plus growing my Ira and taxable accounts so that the combination of their savings and my savings enable them to retire comfortably. I wish the deck weren’t stacked in favor of wealth and against earnings from labor, but I have to play the hand I am dealt.

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Sounds reasonable. Your wealth has to go somewhere in the coming decades and, as you observed, will cushion (at the least) your children’s future.

DB2

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$85 trillion in assets
I imagine the federal government might be interested in re-writing inheritance tax law.
It’s for the children and national debt.

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Yep, those in the Top 10% of the economic pyramid are the ones most likely to leave their beneficiaries a meaningful inheritance.

The other 90% of the population will be out of luck.

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The entire story has not been written yet. We are going into a depression. The Boomers will get crushed.

Coming out of a depression is the best position to be in for younger generations.

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Depends on the individuals involved. Warren Buffett claims he is leaving nothing to his kids. DW & I have no kids but will leave our nieces and nephews something but not everything. We have a couple favorite charities that will benefit. I’m sure we are not alone.

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Yes. Charitable giving should do well over the next two decades.

DB2

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Maybe not. BBB made charitable giving less deductible. Many are scrambling to donate this year before most of the changes go into effect.

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I was thinking that a large chunk of charitable giving happens upon death. For me at least, that makes the deductibility less important.

DB2

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Wealth is growing across the generations. Millennials, welcome to the 401(k) millionaire club.

“Historically the 401(k) millionaires have been Gen X and Boomers, but as they are now getting further in their careers, we’re starting to see millennials reach the million dollar milestone, which is an interesting change to note,” Michael Shamrell, vice president of workplace thought leadership at Fidelity Investments, told Yahoo Finance…

According to the analysis, 3.7% of millionaires are millennials — an increase from 1.8% a year ago, Shamrell said. “If we round, the percentages of millionaires are: Boomers 36% (because they are now pulling from their retirement); Gen X 60%; Millennials 4%.”

DB2

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His kids did receive an inheritance from their grandfather.

In 1977, when Warren Buffett’s son Peter turned 19, he received his inheritance — proceeds from the sale of his grandfather’s farm, which his father converted into $90,000 worth of Berkshire Hathaway stock.

“It was understood that I should expect nothing more,” Peter, an Emmy Award-winning musician and philanthropist, writes in his 2010 memoir “Life Is What You Make It.”

What was $90k worth today? $300K to $400k.

Now Warren’s current plan:

Instead of a single sweeping plan, Buffett said he’s handing over most of his remaining wealth to his three children’s charitable foundations, allowing them to distribute about $500 million each year.

  • $750 million worth of stock to his late wife’s organization, The Susan Thompson Buffett Foundation—which provides scholarships to Nebraska college students.
  • $250 million worth of stock to each of his children’s organizations:
    • The Sherwood Foundation, led by his daughter Susie, which helps make Nebraska a “better place to live, work, learn, and play.”
    • The Howard G. Buffett Foundation, focused on food security, conflict mitigation, and combating human trafficking.
    • NoVo Foundation, run by his son Peter, which supports historically marginalized communities.

Buffett said his children—now ages 72, 70, and 67—are at “their prime in respect to experience and wisdom” and best equipped to guide his fortune while they’re still active and engaged. However, he recognized that his own longevity has accelerated the need to act.

Still, Buffett has no intention of giving away his entire Berkshire Hathaway stake just yet. He said he plans to keep a “significant amount” of his Class A shares until his chosen successor, Greg Abel, is fully settled as the company’s leader.

Originally Buffett was linked with the Gates’s Foundation.
No longer.

https://www.inc.com/jason-aten/with-4-words-warren-buffett-explained-why-hes-cutting-off-gates-foundation-taught-a-lesson-for-every-leader.html
he will instead put his children, “whom I trust completely,” in charge of deciding what happens to his money when he dies. “I feel very, very good about the values of my three children, and I have 100 percent trust in how they will carry things out,” Buffett told the Journal .

Circumstances change; especially if one lives into their nineties.

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From the link:

The biggest group of leapers to this lofty level — millennials, those between the ages of 29 and 44.

I am definitely getting old.

I thought that millennials could not possibly be 44. I was wrong. I would have thought people born in 80s were Gen X.

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The first question the cynic in me would ask, what are their salaries at their foundation?

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Sure, but it’s concentrated at the top of the pyramid, and then even more so to families who have benefited from the stepped up cost basis over generations.

It’s tough for a wage & salary worker dragging a heavy cart of taxation to keep up, while the elites live virtually tax-fee.

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If you’re looking to provide an income for your children, setting up a charitable foundation and hiring them to run it is a very inefficient way to do it.

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Did y’all know that about a third of baby boomers are already dead. So that third has no wealth anymore, their heirs have it.

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Statistically, since poorer boomers have shorter lifespans, they are over represented in the “already dead”.

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True, and thousands of boomers die everyday. We’re well into the point at which wealthy boomers are dying rapidly. The other thing is that one of the biggest contributors to wealth is time, and for people who saved some level of wealth over their career, as time passes it tends to grow. And, of course, as time passes, more and more of them die. There’s been plenty of stuff written about the “great wealth transfer” that’s in progress.

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Perhaps conspicuous consumption will pick up driving the market higher?