Four years ago, sociologist Paul Schervish accomplished a mathematical feat that proved to be more controversial than he ever imagined. He and his colleagues at Boston College calculated the sum of all American inheritances to be distributed over the next half-century. The amount was $41 trillion. Schervish's research seemed especially good news for the Baby Boomers, who stood to gain $7.2 trillion over the next 50 years â€” roughly $92,000 per person, by Schervish's calculation.
Although Schervish still stands by his estimates, in this month's cover story, Contributing Editor Michael J. Weiss describes how the impending generational transfer of wealth in America may be more myth than reality. In fact, Weiss reports, most Baby Boomers are in for a rude awakening. Not only has the size of their future windfall been vastly inflated, so too has the number of Boomers likely to receive any inheritance at all.
â€œA weak economy, a sputtering stock market and a Social Security system that may run dry are all fueling skepticism regarding the size of the transfer of wealth from Boomers' parents to their children,â€? Weiss writes. â€œSince 2001, the stock market meltdown has erased some $8 trillion in shareholder wealth, slashing the net worth of Boomers' parents. Plus, Americans are living longer and increasingly tapping their nest eggs to fund their own extended retirements. Despite heated debate about the exact size of the bequest, there's universal agreement on one stark point: The vast majority of Boomers will never inherit one single dime of inheritance.â€?
Even so, a small percentage of Boomers are expected to claim a legacy. And, despite the newly deflated estimates of the wealth transfer, businesses are still vying to help Boomers spend their parents' money. In his article, â€œGreat Expectations,â€? Weiss offers up several industries most likely to benefit. Look for his story on page 26.
This month, there's a transfer of sorts taking place at American Demographics as well. After three years as editor, I'm leaving the magazine. Although a successor has yet to be named, I'd like to take the opportunity to thank everyone I've worked with over the years â€” especially our readers. We've always encouraged an open forum with you, and have been delighted when you've made the extra effort to contact us. It has been a privilege to edit a magazine whose readers are as passionate about the material as we are.
One parting note: Editors are only as good as the people they work with. We have a small but hardworking staff of writers, editors and designers. It's been an honor to work with them over the past three years. They, and our talented pool of contributors, have provided flashes of brilliance along the way â€” for which I am eternally grateful. To all, thank you for your dedication, and best wishes.