• by Sarah Mahoney  @mahoney_sarah, October 3, 2024

New research from Allianz, the global financial services giant, finds that baby boomers will likely be the wealthiest of all generations, reaping a disproportionate gain from affordable housing, booming stock markets and strong economic growth. In the analysis comparing generational wealth in global markets, millennials emerge as the poorest globally, pummeled by multiple crises just as they entered their savings years. Those mishaps include the Great Recession of 2008, student loan debt, COVID, skyrocketing housing costs, and a period of high inflation.

The study says boomers have been uniquely lucky, allowing them to build up considerable net worth. Allianz uses a hypothetical American woman named Mary, born in 1960, as an example.

Assuming an average equity ratio of 45%, an annual savings rate of 10% and 40 years of saving, beginning at age 20, she will likely have generated lifetime savings of more than 850% of her disposable income and a return of 9.1%.

By comparison, a millennial exemplar named Ashley will likely achieve savings of just 670%. Members of Gen X might be expected to fare worse, at 606% of their disposable income, while Gen Z might do better, saving 766% of their disposable income by 2063.

Gen X, millennials, and Gen Z are still in the savings period of their lives and could improve their financial health by saving more or making higher-risk investments, the deck remains stacked in favor of older people. “Even with the same savings behavior, no generation can match the wealth accumulation enjoyed by the baby boomers,” the report says.

Inherited wealth could change all that. Allianz predicts that in the U.S., more than $84 trillion in assets will be passed on to younger generations by 2045, with $53 trillion coming from boomer households.

The research also found that the U.S. remains on top in wealth, with financial assets of American households growing twice as fast as those in Western Europe, faster than the global average and about even with China. That growth means North America’s share has held steady for 20 years, with about half of all financial assets worldwide. And in per-capita assets, only the Swiss are wealthier. (Denmark, Singapore and Canada round out the top five.)