In short
Morgan Stanley’s Michelle Weaver discusses an “unprecedented wave” of inheritances as baby boomers live longer and transfer wealth later, potentially totaling tens to hundreds of trillions of dollars.
Guests
No guests mentioned; only Michelle Weaver (Morgan Stanley U.S. thematic and equity strategist).
Key claims
17% of U.S. consumers have received an inheritance and 14% expect one; higher-income households (43%) are far more likely than lower-income (17%). About half report under $100,000; about a third under $500,000; 10% report $500,000+.
Notable examples
Most use inheritances for savings/retirement/investments (60%) or housing/debt (about a third); 46% feel more financially secure; 22% link it to increased spending.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOThe Impact of Inheritance on Financial Lives
0:45 to 3:06
Exploring how inheritance influences financial behavior and planning.
“And understanding who's receiving, expecting, and using their inheritances is key to forecasting how Americans save, spend, and invest.”
Transcript
Automatic transcript. May contain errors.0:00Welcome to Thoughts on the Market. I'm Michelle Weaver, Morgan Stanley's U.S. thematic and equity strategist. Today, a powerful force reshaping the financial lives of millions of Americans. Inheritance. It's Friday, October 10th at 10 a.m. in New York. Americans are living longer and they're passing on their wealth later. Longevity is one of Morgan Stanley research's four key themes, and this is an interesting element of longevity. As baby boomers age, they're expected to transfer their wealth to Gen X, millennials, and Gen Z to the tune of tens or even hundreds of trillions of U.S. dollars. Estimates vary widely, but the amounts are unprecedented.
0:40And so inheritance isn't just a family milestone. It's becoming an important cornerstone of financial planning and longevity. And understanding who's receiving, expecting, and using their inheritances is key to forecasting how Americans save, spend, and invest. According to our latest AlphaWise survey, 17 % of U.S. consumers have received an inheritance, and another 14 % expect to receive one in the future. Younger Americans are especially optimistic. Their expectations split evenly between those anticipating an inheritance within the next 10 years and those expecting it further out. But here's the kicker.
1:17Income plays a huge role. Only 17 % of lower-income consumers report receiving or expecting an inheritance. but that number jumps to 43 % among higher-income households, highlighting a clear wealth divide. What about the size of the inheritance? In our survey, those who received or expect to receive an inheritance fall broadly into three categories. About half reported amounts under$100 ,000. For about a third, that amount rose to under$500 ,000. And then meanwhile, 10 % reported an inheritance of half a million dollars or more. Younger consumers tend to report smaller amounts while inheritance size rises with income.
1:57One important thing to remember about our survey, though, is it looks more at the average person. We are missing some of those very high net worth demographics in there where I would expect inheritance to rise much higher than half a million. And so when we think about this, how will recipients use this wealth? That's a really important question. The majority, about 60%, say they have or will put their inheritance towards savings, retirement, or investments. About a third say they'll use it for housing or paying down debt. Day-to-day consumption, travel, education, and even starting a business or giving to charity also featured in the survey responses, but to a lesser extent.
2:35The financial impact of inheritance is significant. 46 % of recipients say it makes them feel more financially secure. 40 % cite improvements in savings, and 22 % associate it with increased spending. Some even report retiring earlier or lightening their workloads. Inheritance trends are shaping consumer behavior and have the power to influence spending patterns across industries. To sum it up, inheritance isn't just a family matter. It's a market mover. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share thoughts on the market with a friend or colleague today.
3:14The preceding content is informational only and based on information available when created. It is not an offer or solicitation, nor is it tax or legal advice. It does not consider your financial circumstances and objectives and may not be suitable for you.
From the publisher
Our U.S. Thematic and Equity Strategist Michelle Weaver discusses how the largest intergenerational wealth transfer in history could reshape saving, spending and investment behavior across America.
Read more insights from Morgan Stanley.
----- Transcript -----
Michelle Weaver: Welcome to Thoughts on the Market. I'm Michelle Weaver, Morgan Stanley's U.S. Thematic and Equity Strategist.
Today, a powerful force reshaping the financial lives of millions of Americans: inheritance.
It's Friday, October 10th at 10am in New York.
Americans are living longer and they're passing on their wealth later. Longevity is one of Morgan Stanley Research's four key themes, and this is an interesting element of longevity. As baby boomers age, they're expected to transfer their wealth to Gen X, millennials and Gen Z to the tune of tens or even hundreds of trillions of U.S. dollars.
Estimates vary widely, but the amounts are unprecedented. And so, inheritance isn't just a family milestone; it's becoming an important cornerstone of financial planning and longevity. And understanding who's receiving, expecting, and using their inheritances is key to forecasting how Americans save, spend, and invest.
According to our latest AlphaWise survey, 17 percent of U.S. consumers have received an inheritance, and another 14 percent expect to receive one in the future. Younger Americans are especially optimistic. Their expectations split evenly between those anticipating an inheritance within the next 10 years and those expecting it further out.
But here's the kicker; income plays a huge role. Only 17 percent of lower income consumers report receiving or expecting an inheritance, but that number jumps to 43 percent among higher income households highlighting a clear wealth divide.
What about the size of the inheritance? In our survey, those who received or expect to receive an inheritance fall broadly into three categories. About half reported amounts under $100,000 dollars. For about a third, that amount rose to under $500,000. And then meanwhile, 10 per cent reported an inheritance of half a million dollars or more.
Younger consumers tend to report smaller amounts, while inheritance size rises with income. One important thing to remember about our survey though, is it looks more at the average person. We are missing some of those very high net worth demographics in there where I would expect inheritance to rise much higher than half a million.
And so, when we think about this, how will recipients use this wealth? That's a really important question. The majority, about 60 percent, say they have or will put their inheritance towards savings, retirement, or investments. About a third say they'll use it for housing or paying down debt. Day-to-day consumption, travel, education and even starting a business or giving to charity also featured in the survey responses – but to a lesser extent.
The financial impact of inheritance is significant: 46 percent of recipients say it makes them feel more financially secure; 40 percent cite improvements in savings; and 22 percent associate it with increased spending. Some even report retiring earlier or lightening their workloads.
Inheritance trends are shaping consumer behavior and have the power to influence spending patterns across industries. To sum it up, inheritance isn't just a family matter, it's a market mover.
Thanks for listening. If you enjoy the show, please leave us a review wherever you listen, and share Thoughts on the Market with a friend or colleague today.