Six-Chart Sunday – Inheritances

6 Infographics + 1 Video (Neil Howe’s generational theory of history)

The first of the Baby Boomer generation turns 80 this year, with the fourth and likely last of the Baby Boomer Presidents well-into his second term. Leadership will eventually pass to younger generations. But Boomers still hold much of the wealth and many of the offices, and they appear in no hurry to hand things over. A brief look at generational inheritance.

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1. BIGGEST LEGACY: PROGRESS & ABUNDANCE

Boomers were born into a country where a third of homes lacked complete indoor plumbing. They turn 80 in one where nearly nine in ten have air conditioning. Diseases that killed and crippled millions then are today prevented or cured. The radio in the parlor has become a device in every pocket with access to almost everything ever recorded.

2. WEALTH & LEADERSHIP

Decades of rising earnings and asset values left Baby Boomers and older Americans holding nearly two-thirds of assets. And the wealth has outlasted the traditional handoff: Americans are living and working longer, while judges, Senators, House members and CEOs are markedly older than they were a generation ago.

Older generations are also sticking around longer in government & business… the average age of judges, Senators, House members & CEOs climbed for four decades and remains at or near record highs.

3. INHERITANCE ≠ REDISTRIBUTION

While the transfer will be enormous, the redistribution won’t be. Boomers hold $93 trillion, but after debt, retirement spending, taxes and charity, Visa estimates roughly $36 trillion actually reaches Gen X and Millennial heirs over the next two decades — about $515,000 per inheriting household. Nearly three-quarters of those heirs are already in the top 10% of net worth. Barely 1% come from the bottom half. And this is after excluding the wealthiest 1% entirely from their analysis.

4. DEBT

Boomers were born with debt held by the public at 106% of GDP. By 1974, that burden had fallen to 23%. It’s back to roughly 101% today — and rising.

5. TRUST

In 1958, while the first Boomers were still children, nearly three in four Americans trusted the federal government to do what was right all or most of the time. Today, fewer than one in five do. While material abundance compounded, institutional trust eroded.

6. VALUES DON’T TRANSFER LIKE ASSETS

The generational values gap is wide. On patriotism, religion, family and national pride, Gen Z reported strikingly different priorities from Boomers in this 2024 poll.

SO WHAT

Boomers inherited & accelerated an extraordinary postwar expansion: real disposable income per person grew to five times its 1946 level, infant mortality fell roughly 84%, and the share of adults with a bachelor’s degree is more than six times its 1950 level.

The public balance sheet moved the other way. Debt held by the public is back to its post-World War level with substantially greater future obligations. Social Security’s retirement trust-fund reserves are projected to be depleted in late 2032; the Medicare Hospital Insurance’s reserve in 2033.

The harder inheritance may be confidence. Just 33% of Gen Z in one survey called America the best place to live, versus 66% of Boomers, while fewer than one in five Americans now trust the federal government. Assets and liabilities transfer automatically… confidence must be earned anew.

VIDEO

When talking about generations, there’s no one better than Neil Howe, author of the extraordinary “The Fourth Turning Is Here.” We discussed that great book – positing that history is driven by the interaction among successive generations – when it came out 3 years ago: