Millennials Are About to Become the Richest Generation in History

Millennials Are About to Become the Richest Generation in History

Become Wealth Editor
The ‘avo on toast’ generation, millennials, are about to be the most well-off generation ever

Millennials have been getting a bad rap for the past decade.

Ridiculed as the ‘avo on toast’ generation by boomers, they've been stereotyped as stuck renters who waste money on fancy lattes and luxurious avocados instead of saving for a house.

But things could be looking up for millennials and their dwindling bank accounts.

A new report predicts a giant transfer of riches from older generations to millennials over the next few decades, which could make them the wealthiest generation the world has ever seen.

The Great Generational Wealth Transfer

A recent Wealth Report by global real estate consultancy Knight Frank and The Intelligence Lab claims that the silent generation (born between 1928 and 1945) and the baby boomers (1946 to 1964) are poised to hand over a huge chunk of their assets – think property, stocks, and superannuation funds – to millennials (1981 to 1996).

The report, which analyses the latest global trends in property and economics, says in the United States (US) alone, this transfer of wealth is estimated at a whopping US$90 trillion in 2044 “making affluent millennials the richest generation in history”.

A study by the US Federal Reserve shows a huge gap in wealth ownership across generations currently in the US. Baby boomers hold the lion's share, with over half (50%) of all wealth, followed by Gen X (29.5%), the silent generation (11.9%), and millennials are behind at just 8.5%.

Halé Behzadi, North American head of Citi Private Bank told Fast Company the money is starting to change hands and the amounts are eye-popping.

“About 1,000 billionaires are expected to pass more than $5.2 trillion to their children over the next 20 to 30 years,” she says.

“We’re going to have a lot of wealthier, younger people.”

And it won’t just end up in the hands of their children.

“The transfer will happen to charities as well,” she adds. “A good number of billionaires will be transferring assets to different philanthropies and their own foundations.”

The Silver Spoon Advantage

A separate analysis for the Guardian, by the Institute for Fiscal Studies (IFS), found parents whose assets have been bolstered by rising property prices and final salary pensions are poised to leave their millennial children about £150,000 (about NZ$313,774) each on average.

Millennials are also set to benefit from having fewer siblings to share their inheritance with compared to previous generations - 1.8 compared with 2.5 for people born in the 60s.

Just like anything in life, wealth – and inheritances – aren’t evenly distributed. The wealth windfall won't be evenly distributed. In the UK, which it should be noted has a more inequal wealth distribution than New Zealand, it’s estimated one in ten millennials will see none of this wealth.

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The Uphill Battle

All generations have and will face challenges. Many millennials and Gen Z might feel like they’ve faced an uphill financial battle after already living through the Global Financial Crisis of 2008-09, the Covid Pandemic, a twenty year global war on terror, and the more recent New Zealand spike in cost of living and recession. Reaching milestones like homeownership seems out of reach for many younger New Zealanders, let alone saving for the future.

Record high rents which reduce the ability of renters to save, rising costs of living, large home deposit requirements, and an increase in interest rates over recent years have made it tough for millennials to buy homes. For context, some of these financial obstacles might gain little sympathy from older generations, particularly those who recall New Zealand’s record high interest rates of the 1980’s, when the usual mortgage rate was briefly above 20 percent and averaged well over 10 percent for the full decade!

Maybe that’s part of the reason why millennial’s lack of home ownership has seen them painted as irresponsible spenders – rightly or wrongly.

Take the infamous "skip the latte" mantra. This one-size-fits-all suggestion has become a pop culture punchline, thrown at millennials trying to buy a home. It's everywhere – from personal finance blogs to national news, even dinner table conversations. And lattes aren't the only target. Fancy avocado-on-toast, online streaming services, and even ride-hailing apps have all been scrutinised as millennial frivolity.

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Reality Check: Will Many Millennials Really Be That Rich?

Some of the growing hype around this wealth transfer may be overstated. There’s no doubt baby boomers have enjoyed a wealth boom unlike any other generation. Soaring stock markets, skyrocketing real estate values, and double-income families as women entered the workforce have fuelled substantial wealth accumulation.

But, before Millennials with well-off parents quit their day job and book a first-class ticket to Bali, let’s pump the brakes for a second.

Miles Workman, a senior economist at ANZ, told Fairfax nothing is guaranteed.

“As the saying goes, you can’t take it with you, so yes there will be wealth transferred across generations over time. There are uncertainties around this outlook though. The potential broadening of the tax system is the main one that springs to mind. Over the long run there is a non-zero probability that a capital gains tax, inheritance tax, or death duty is introduced which could move the dial somewhat.”

While inheriting a big chunk of change is undeniably awesome, it’s not all sunshine and rainbows. Here’s a reality check for our soon-to-be-wealthy Millennials.

Inheritances Get Squandered

If we earn it, we value it. It’s in our fundamental psychology to value what we pay for, regardless of whether we pay for it with our money or with our sweat. That’s probably why:

  • We’ve all heard of lotto winners going broke within a few years, some studies suggest up to 70 percent of lotto winners go bankrupt.
  • A full half of all inherited money is either spent or ‘lost’ within a few years, according to research.

Ouch. Impulse buying that holiday might not be the wisest move. It may be that by the time many millennials buy a new boat, a holiday or two, and a few luxury consumer items, they’ve squandered about half of what their parents worked so hard to accumulate.

Legal Costs

There’s limited New Zealand data on how many wills are challenged, but the numbers might be higher than you’d expect.

Challenges to wills come for many reasons:

  • Jealousy between siblings, which has been made more likely due to blended families, including the increasing instance of stepsiblings.
  • Perceptions of overestimated wealth. In this case, one child may believe their parents are wealthier than they are and may challenge a will thinking another sibling has done better than them somehow.
  • Often, the involvement of the beneficiaries’ spouses. In this case, beneficiaries will most likely be the adult children of wealthy baby boomers. Anecdotally, the beneficiaries’ spouses are often the ones who start squabbling, and inflame relations between siblings who would not have otherwise quarrelled.
  • Legal technicalities, including doubts over the legality of the will. This is especially the case if the will was written when the deceased was unwell, including terminally ill. In these cases, it is sometimes suggested a carer, or one family member had undue influence over the will.

Challenging an estate is nearly always expensive, lengthy and can leave you with less money than your loved one intended. Most often in our experience, it’s only the lawyers that win.

Paying Off Debt

Many millennials are saddled with large student loans, personal debt, and mortgages. It’s not unusual to hear of millennials in Auckland with mortgages that total the better part of $1 million, while other major centres aren’t far behind.

In these cases, it might be wisest the inheritance just goes straight towards repaying those debts, an often-overlooked factor in this conversation.

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Healthcare Costs

As we age, we nearly always spend more on our immediate health needs.

Rising healthcare costs, especially for the elderly, are already eating into the inheritances of millennials as baby boomers fund their own healthcare. This includes long-term care, medications, and non-publicly funded medical bills, which all need to be factored in.

In New Zealand, we’re fortunate to have a good public healthcare system. But the system has limits. Take aged care, for example. If you are over 65 years old and go into an aged care facility, you’ll need to pay for your own care. There are taxpayer-funded subsidies available, but these are dependant on an asset test, to see if you can afford to pay for care yourself, and limits are quite low. Without going into too much detail, if you’re a baby boomer widow who needs to go into care, let’s say for dementia, in most cases you’ll need to pay your own way until you’ve only got $273,628 in total net worth left, which is the threshold of when taxpayer-funded subsidies will start paying for your care. If the widow was living alone in a family home before needing care, the home will have needed to be sold to help fund the care. (This is just an example, be sure to check any personal situation with the Ministry of Social Development, who administer the subsidy).

So, any millennials expecting a windfall might need to adjust down any lofty expectations.


An often-overlooked aspect of the great wealth transfer is siblings, as any inheritance is usually equally divided among the children of the deceased. It’s not clear exactly how many children each baby-boomer raised to adulthood, but let’s assume it’s 2.7 per family, which is the current New Zealand family size.

Dividing the inheritance by 2.7 will still probably leave something meaningful to each adult child, just a lot less than you might think at first glance.

Another Approach: Early Inheritance

Some parents are giving their children at least a part of their inheritance early, so their adult children can afford to buy a house while the parents are still alive.

Some are giving over cash and investment properties, which means their children need to be making wise decisions with how they choose to spend it.

Millennial Inheritance Tips

So, what are some key takeaways for any Kiwi Millennial readers?

  • Any inheritance you do receive may be smaller than you first expect, for reasons including your siblings and your parents’ healthcare needs.
  • Don’t rely on anything being given to you, and instead focus on what you can control: your career, your earnings, your investments, and so on.

If you do receive a lump sum, consider:

  • Take a breath: pause and evaluate the situation. You surely don’t want to be like a lotto winner who soon blows all their winnings!
  • Pay down debt: get rid of those pesky student loans and mortgages. This will free up your cash flow and give you more financial breathing room.
  • Invest for the future: don't let your inheritance languish in your bank account. Invest it wisely to grow your wealth over time.
  • Plan ahead: don't wait until the money hits your account to figure out what to do with it. You can work alongside your parents to create an estate plan. Talk to a financial adviser and develop a plan to manage your windfall wisely.

Learn more: What to do with a windfall

The Bottom Line: The Great Wealth Transfer

Forget the "latte-loving renter" stereotype. Millennials are set to inherit a fortune and may just be the richest generation ever.

This might create a generation of financially secure individuals who can do the same for their own children, or according to some, this could exacerbate existing inequalities.

If you are one of the ones to inherit from your parents or grandparents, it’s important to consider talking with a professional – a financial adviser like the team here at Become Wealth.

Careful planning could turn your inheritance into a springboard for financial security and inter-generational wealth. But it could also just as easily dwindle away due to financial illiteracy or impulsive spending sprees.

One thing is certain: how millennials navigate this inheritance will shape their future and the future of wealth distribution for generations to come.

Our trained professionals are standing by to help you work through any of the topics mentioned above, so get in touch to book your obligation-free consultation.

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