The Great Wealth Transfer: What Millennials and Gen Z Need to Know

There's a good chance you've seen the headlines. Trillions of dollars are starting to move from older Americans to their kids and grandkids, and many reports call it the biggest shift of money in history. If you're a millennial or Gen Z, it's fair to wonder what, if anything, this means for you.

Here's the honest version. The Great Wealth Transfer is real, and it's underway, but the windfall most people picture is smaller and less common than the hype suggests. The reassuring part is that your financial future doesn't hinge on an inheritance at all. Whether or not money comes your way, you can build wealth by starting early and staying consistent. Let's walk through what's actually happening and what to do about it.

What the Great Wealth Transfer actually is

The Great Wealth Transfer is the ongoing shift, where an estimated $124 trillion in assets are passed down from Baby Boomers and the Silent Generation to younger generations and charity through 2048, according to Cerulli Associates. Of that total, about $105 trillion is expected to go to heirs and roughly $18 trillion to charity.

In plain terms, it's money and property, including cash, homes, investments, and businesses, passing from one generation to the next. Most of it moves through inheritance after someone dies, though some is gifted while people are still alive. And it isn't a someday event. Heirs are already inheriting around $2.5 trillion a year, a figure that Cerulli projects will top $4 trillion around 2036.

One thing worth knowing: The $124 trillion figure is newer and larger than the number you may have seen before. It replaced an earlier and widely repeated projection of about $84 trillion from 2020. Rising home values and stock prices pushed the estimate up, so any article still citing $84 trillion is working from old data.

It also helps to understand why this is happening now. Baby Boomers came of age during decades of rising home prices and a long-running stock market, and they hold a large share of the country's wealth. As that generation ages, those assets naturally start to change hands. That's the engine behind the Great Wealth Transfer. It isn't a single event but a wave that builds year after year as more of that wealth moves to the people who come next.

Who's passing it down, and who's receiving it

Most of the money is coming from Baby Boomers and the Silent Generation, and most of it is heading to Gen X and millennials, with Gen Z further down the line. According to Cerulli, about 81% of all transfers, roughly $100 trillion, come from Boomer and older households.

The timing splits in an interesting way. Millennials are projected to inherit the most of any generation over the full 25 years, about $46 trillion. But Gen X leads in the near term, on track to inherit roughly $14 trillion over the next decade, compared with millennials' roughly $8 trillion in that same window. A large share of the money also moves sideways first: Cerulli estimates about $54 trillion will pass between spouses before it ever reaches the next generation, and nearly $40 trillion of that will go to widowed women.

Who inherits what, and when

Source: Cerulli Associates, 2024. Birth-year ranges per Pew Research Center.

If you're in Gen Z, you're earlier in this wave than your older siblings or coworkers. The money reaches Gen X and millennials first and flows to the youngest adults later, as annual transfers keep climbing toward and past $4 trillion. That's all the more reason to start building on your own now, while time is firmly on your side.

Will you actually inherit money? The honest answer

Most millennials and Gen Z will inherit far less than they expect, and many won't inherit anything at all.

The gap between expectation and reality is wide. Surveys from USA Today show 68% of millennials and Gen Z have received or expect an inheritance averaging nearly $320,000. But the average inheritance is closer to $46,200 (Federal Reserve), and even that number is pulled up by a small group of very large estates, so most people who do inherit receive much less. The wealth is concentrated at the top: high-net-worth and ultra-high-net-worth households, about 2% of all households, account for more than half of the total, roughly $62 trillion, according to Cerulli.

None of this is meant to discourage you. It's meant to keep your expectations grounded so you can plan around what's likely, not what's hoped for. If an inheritance arrives, that's a bonus. If it doesn't, you'll already be building wealth on your own terms.

So why do expectations run so high? Part of it is the headlines, which tend to lead with the eye-catching $124 trillion total and the idea that millennials could become the richest generation in history. Part of it is that families often don't talk openly about money, so adult kids fill in the blanks with optimism. The result is a lot of people quietly building their plans around money that may never arrive, or that arrives much later and much smaller than they pictured.

Why many people inherit less than they expect

Even when families have money, a few common factors shrink what eventually reaches the next generation.

People are living longer than past generations, which is good news, but it also means retirement savings have to stretch across more years. Money that might once have been passed on is increasingly spent on simply funding a longer life.

Healthcare and long-term care are a big piece of this. Costs like assisted living, in-home help, and medical bills tend to climb later in life, and they can quietly draw down even a sizable nest egg before anything is left to pass on.

There's also the horizontal transfer. When one spouse passes away, their assets usually go to the surviving spouse first, not straight to the kids. Cerulli estimates about $54 trillion will move between spouses before it ever reaches the next generation, which can delay an inheritance by years or even decades.

Finally, there's a simple communication gap. Many parents haven't talked with their adult kids about what they plan to leave, or whether they plan to leave anything at all. Without that conversation, expectations and reality drift apart, often without anyone meaning for them to.

What to do if you do inherit

If money does come your way, the smartest first move is usually to slow down. Park it somewhere safe, take a breath, and make a plan before you spend or invest a dollar. A few steps that tend to serve people well:

• Give yourself time. Big money decisions made fast are easy to regret. There's no rush.
• Build your emergency savings. Setting aside 3 to 6 months of expenses gives you a cushion for life's surprises.
• Pay down high-interest debt. Clearing balances like credit cards is one of the most reliable returns you can get.
• Invest the rest for the long term. What you don't need soon can keep working for you for years.
   

On taxes, the basics are friendlier than many people assume. Inheritances generally aren't treated as taxable income at the federal level for the person receiving them. Inherited assets usually get a step-up in basis, which means their value is reset to what they're worth on the date of the original owner's death. And only very large estates owe federal estate tax, with the 2026 exemption set at $15 million per person, so most families never pay it. Some states have their own rules, so it's worth checking with a tax professional about your situation.

One more thing worth saying: try not to build your whole financial plan around an inheritance you haven't received. Longevity, healthcare costs, and a parent's own choices can all change the picture. Treating an inheritance as a possible bonus rather than a guaranteed plan keeps you in control either way.

How to build wealth without an inheritance

Here's the most important part of all of this: you don't need an inheritance to build wealth. Starting early, investing consistently, and letting your money compound over time can do the heavy lifting.

Tap into compound growth

Compound growth is the reason. When you invest, your money can earn returns, and over time those returns can earn returns of their own. It's like a snowball effect, where the longer it rolls, the bigger it gets, which is why time is the single biggest advantage a younger investor has. If you're curious how it works in practice, here's a plain-language look at how compound interest works.

Staying consistent

You don't need a big balance to begin, either. Small, regular amounts add up, and consistency tends to matter more than perfect timing. Trying to guess the market's highs and lows is hard even for professionals, and getting it wrong can be costly. Investing a set amount on a regular schedule, an approach called dollar-cost averaging, can better smooth out the bumps. You buy a little more when prices are low and a little less when they're high, all without having to predict anything. The old saying captures it well: it's about time in the market, not timing the market.

The math also rewards starting young. Because of compounding, a dollar invested in your 20s has decades longer to grow than the same dollar invested in your 40s. That head start is the real advantage younger investors have. You don't have to invest a lot to start. You just have to start, and then keep staying invested.

Diversify your portfolio

It also helps to spread your money across a mix of investments rather than betting on any single one. Acorns does that for you with expert-built, diversified portfolios of ETFs matched to your goals, and it keeps the whole thing automatic so you can set it up once and let it run. For most people, automatic and a little bit boring is exactly what works, because it removes the temptation to tinker and lets time do its job.

Before you put much into the market, it's smart to keep a little set aside for emergencies so you're never forced to sell investments at a bad moment. Once that cushion is in place, the rest can go to work. The path to wealth for most people isn't a lucky break. It's a habit of investing what you can, keeping at it, and giving it time.

Here's how to start investing and put your money to work.

How to pass wealth to the next generation

If you're thinking a generation ahead, you might be wondering how to pass something on yourself. The good news is you don't have to be wealthy to begin. Common options include custodial accounts, known as UGMA and UTMA accounts, which let you invest on behalf of a kid, and 529 plans, which are built for education costs. Acorns offers Acorns Early Invest, a custodial (UGMA/UTMA) account, that makes it easy to invest for the kids in your life, with the same automatic, expert-built approach as the rest of Acorns.

Frequently asked questions

What is the Great Wealth Transfer?

The Great Wealth Transfer is the ongoing shift of an estimated $124 trillion in assets from Baby Boomers and the Silent Generation to younger generations and charity through 2048, according to Cerulli Associates. About $105 trillion is expected to go to heirs and roughly $18 trillion to charity. It's already underway, with heirs inheriting around $2.5 trillion a year, and the $124 trillion estimate replaced an older $84 trillion projection as home and stock values rose.

How much is the average inheritance in the U.S.?

The average inheritance in the U.S. is about $46,200, according to Federal Reserve data. That figure is skewed upward by a small number of very large estates, so the typical amount most people receive is lower. In short, the average is a lot smaller than the six-figure sums many young adults expect.

Will millennials and Gen Z actually inherit money?

Some will, but most millennials and Gen Z will inherit far less than they expect, and many won't inherit at all. Surveys show 68% of younger adults expect an inheritance averaging nearly $320,000, while only about 1 in 5 households actually receive one, and the wealth is heavily concentrated among the highest-net-worth families. The safest plan is to build your own wealth and treat any inheritance as a bonus.

What should you do with inheritance money?

If you inherit money, slow down before you spend it. A common approach is to build your emergency savings to cover 3 to 6 months of expenses, pay down high-interest debt like credit cards, and invest the rest for the long term. Inheritances generally aren't taxed as federal income for the person receiving them, but tax rules vary by state and situation, so it's worth talking to a tax professional.

What is generational wealth?

Generational wealth is money or assets passed down from one generation to the next, such as investments, a home, savings, or a business, that gives the next generation a financial head start. You don't have to be rich to start building it. Investing consistently over time, even in small amounts, is how most families can build potential wealth.

Do you pay taxes on an inheritance?

In most cases, no. Inheritances generally aren't treated as taxable income at the federal level for the person receiving them, and inherited assets usually get a step-up in basis that resets their value as of the original owner's date of death. Only very large estates owe federal estate tax (the 2026 exemption is $15 million per person), though a handful of states have their own estate or inheritance taxes. Check with a tax professional about your specific situation.