How the Great Wealth Transfer Could Worsen Inequality

By: Anneken Tappe · June 25, 2024 · Reading Time: 2 minutes

In the coming years, baby boomers are expected to pass down trillions of dollars in property, stock portfolios, cash, and businesses to younger generations — a phenomenon known as the Great Wealth Transfer.

But in spite of the massive sums of wealth expected to change hands, data suggests it won’t do much to close the racial wealth gap in the U.S.

Inheritance Gap

White households stand to inherit most of this wealth, according to a report from the Urban Institute , which could perpetuate or even worsen wealth inequality relative to Black Americans.

The story of wealth inequality is a story of generational wealth; homeownership is a key aspect of that. In the U.S., however, there is a growing homeownership gap.

White seniors have a homeownership rate of 82.6%, compared to 58.5% for Black seniors, according to Urban Institute data. This gap is wider now than in the 1960s, partly due to discriminatory policies like redlining, according to the research. And since homeownership is one of the most powerful ways to build wealth, this divide has exacerbated financial inequality as well.

But even excluding the value of their primary residence, White seniors still hold an outsized portion of wealth in the U.S. — $70.4 trillion in assets, compared to just $0.9 trillion for Black seniors. As this wealth is passed down, it stands to worsen the divide between White and Black households.

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