Thoughts on the Market

An Unprecedented Wave of Inheritances Is Coming

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Oct 10, 2025

A colossal wealth transfer is on the horizon as baby boomers pass generational fortunes to younger Americans. Estimates suggest this inheritance could reach up to hundreds of trillions of dollars. Interestingly, 17% of consumers have received an inheritance, with younger generations expressing strong optimism about future inheritances. However, significant wealth divides exist, influencing expectations. Most recipients plan to save or invest their inheritances, which could enhance financial security and allow for earlier retirements.

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INSIGHT

Unprecedented Intergenerational Wealth Transfer

Baby boomers are transferring unprecedented wealth to younger generations as they age and pass it on later in life.
This massive intergenerational transfer could reshape financial planning, saving, spending, and investment behavior across the U.S.

INSIGHT

Who Expects Inheritances

Survey results show 17% of U.S. consumers have received an inheritance and 14% expect one in the future.
Younger Americans are more optimistic, splitting expectations between the next 10 years and further out.

INSIGHT

Wealth Divide In Inheritance Expectations

Income strongly affects inheritance expectations: only 17% of lower-income but 43% of higher-income consumers report receiving or expecting inheritances.
Inheritance sizes cluster under $100k for half, under $500k for a third, and $500k+ for 10%, with higher amounts for wealthier demographics.

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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.

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