If you read the business pages of the newspaper, you may have seen the term ‘inter generational wealth transfer’ starting to appear more frequently.
That’s because an estimated $3 trillion of wealth is predicted to change hands over the next two decades, from households of Australians age 55+ to younger generations.[i] This represents a massive shake-up in wealth ownership, given Baby Boomers (those currently age 45-64) own more than half the country’s net wealth[ii].
At the other end of the spectrum, the potential recipients of some of these funds – Gen Y (those age 25 to 34) – are rich in income but comparatively poor in terms of net wealth. Australian Bureau of Statistics figures[iii] put the household net worth of Gen Y at $268 800, less than half that of Gen Xers, who are only a decade older. Both pale in comparison to the net wealth of Baby Boomers, who have a net wealth nearly five times that of Gen Y. This stark contrast is the result of a dramatic shift in economic conditions over the last fifty years, which has seen property prices grow to be out of reach for many young people, while cumulative investment returns have been significant for those now age 55 or older.
What does all this mean for you?
Families have a unique opportunity to take a strategic approach to wealth management and wealth transfer via aged care planning and estate planning. We can help to guide you through a process of family meetings and discussions to develop a plan to support your family goals.
Whatever generation you’re from – don’t leave your future and your family’s hard-earned wealth to chance. We are seeing a marked increase in estate planning and have witnessed some remarkable strategies both from planning phase through to activation. We are here to help so please call us with any questions. Call one of our qualified accountants on 5437 9900.
[1] McRindle Research, 31 May 2016, https://mccrindle.com.au/insights/blog/australias-household-income-wealth-distribution/[1] McRindle Research, 31 May 2016, https://mccrindle.com.au/insights/blog/australias-household-income-wealth-distribution/