Millennials Face Potential Windfall as Baby Boomer Inheritances Soar
A survey conducted by Sun Life Financial Inc. reveals that millennials may be in for a surprise when their baby boomer parents pass on their wealth. The survey shows that baby boomers who plan to pass on all their assets to their millennial children expect to leave an average inheritance of $940,000, with those working with a financial adviser expecting to leave over $1 million. However, millennials only anticipate an average inheritance of $309,000, significantly lower than what they could potentially receive. This large sum has the potential to complicate millennials' financial lives if they are unprepared. Canada is experiencing the largest intergenerational wealth transfer in its history, with up to $1 trillion in inheritances expected to be passed down by the end of 2026. It is crucial for both boomers and millennials to engage in transparent conversations about estate planning and start early to ensure a smooth transition of wealth. Failure to plan ahead could have implications for both generations, considering variables such as longer life expectancies, market volatility, rising living costs, and healthcare expenses.
The Implications of a Massive Intergenerational Wealth Transfer on New Businesses
The impending windfall that millennials stand to inherit from baby boomers, as revealed by a Sun Life Financial Inc. survey, could have a significant impact on new businesses. With inheritances expected to average around $940,000, and potentially over $1 million for those whose parents work with a financial adviser, the influx of capital into the hands of millennials could lead to a surge in entrepreneurship and investment in new ventures.
The Potential for Increased Entrepreneurship
The prospect of such a significant inheritance could empower more millennials to take the entrepreneurial leap, using their newfound wealth to fund startups and innovative business ideas. This could lead to a boom in new businesses, driving economic growth and job creation.
Increased Investment in New Ventures
Beyond starting their own businesses, millennials could also become significant investors in other new ventures. With more capital at their disposal, they could provide the much-needed funding that new businesses often struggle to secure.
However, this potential windfall also comes with challenges. The sudden influx of wealth could complicate millennials' financial lives if they are unprepared. It underscores the need for financial literacy and planning, not only to manage their personal wealth but also to make informed business and investment decisions.
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