$17.2 trillion expected to transfer between generations through 2045
California accounts for 19.8%, averaging $2.9 million per household
Growing wealth divide could further widen housing and asset inequality
The “Great Wealth Transfer” is gaining momentum as enormous amounts of wealth accumulated by baby boomers and other older Americans begin passing to younger generations.
More than $17 trillion in assets held by homeowners age 65 and older could change hands over the next 20 years, with California alone expected to account for nearly one-fifth of the nationwide total.
An analysis by real estate and financial marketplace LendingTree, using data from the U.S. Census Bureau, Federal Reserve and other sources, estimates that homeowners 65 and older will transfer approximately $17.2 trillion between 2026 and 2045. That works out to an average of about $859 billion a year.
The transfer is expected to be particularly large during the early years. An estimated $1.4 trillion could change hands this year, followed by $1.3 trillion in 2027, $1.2 trillion in both 2028 and 2029, and $1.1 trillion in 2030. Annual transfers are projected to remain above $1 trillion through 2031.
California stands out.
An estimated $3.4 trillion in wealth is projected to be transferred in the state over the next two decades, representing 19.8% of the national total. In other words, roughly one out of every five dollars transferred nationwide through inheritances, gifts and other means could come from California. The state’s projected total is greater than those of Florida and New York combined.
California has approximately 2.72 million homeowner households headed by people 65 and older, with an average home value of about $982,000.
The total wealth potentially available for transfer averages approximately $2.9 million per household, second only to Hawaii at $3.1 million. California is projected to see an average of about $171 billion in wealth transferred annually.
But the massive transfer of wealth will not benefit everyone equally.
Matt Schulz, LendingTree’s chief consumer finance analyst, warned that because wealth transfers are unevenly distributed, affluent families could become even wealthier while households with little or nothing to inherit may find it increasingly difficult to build assets. The result could be a widening of the nation’s existing wealth gap.
The disparity could be especially pronounced in California, where decades of rising real estate values have created enormous amounts of housing wealth. As those assets pass to the next generation, the ability to buy a home and accumulate wealth could increasingly depend on whether a family receives an inheritance.
LendingTree noted that California’s already significant concentration of wealth could further intensify the state’s housing affordability problems.
There is also a substantial gap between what younger Americans expect to inherit and what older Americans actually plan to leave behind.
Among people under 65, 33% expect to receive an inheritance or financial gift in the future. The percentage rises to 53% among those earning at least $100,000 annually. By comparison, only 43% of people 65 and older said they plan to leave an inheritance or financial gift.
More concerning is the extent to which some Americans are already incorporating expected inheritances into their retirement plans. Among those expecting an inheritance or financial gift, 43% said their retirement plans depend significantly on receiving that wealth.
Financial experts caution that such expectations can be risky. Medical and long-term care expenses, inflation and market fluctuations could substantially reduce the assets older Americans ultimately have available to pass on.
The projected $17.2 trillion Great Wealth Transfer over the next two decades could reshape homeownership, retirement and investment patterns across the country.
In California, however, it could also create an increasingly important economic dividing line — between families that inherit substantial wealth and those that do not.
