Update: June 2024
Wealth: we all chase after it. We all want to be debt-free and worry-free, and to provide for our family and friends.
Millennials, in particular, are increasingly relying on their parents’ inheritance to achieve financial stability and achieve financial milestones. Milestones their parents achieved when they were younger than their children are now. This demographic, born in the early 80s, has been dealing with the economic instability brought upon by the 2008 recession. Wages have stagnated, houses are out of reach for many Millennials, and these trends are driven by multiple factors.
Many millennials are finding it extremely challenging (to say the least) to save for homeownership, retirement, or starting a family. Consequently, many view their parents’ inheritance as a crucial financial cushion that can help bridge these gaps (Generation Z may have it even worse). All this is to say that generating wealth for younger generations has become exceedingly difficult.
People are grappling with high inflation, stagnant wages, skyrocketing housing costs, and working “side hustles” to pay the bills. Did you know that even wealthy people are feeling this way? In 2023, 59% of what could be described as “affluent” U.S. citizens feel secure in their assets. Compare this to the whopping 72% of Americans who felt the same just a year earlier, in 2022.
The wealthy are like us: worrying about rampant inflation. They’re not investing; they’re not taking risks with their money; they’re holding on to it, which could be a sign of how shaky the economy is right now.
The wealthy are saddled with substantial debts: they (much like the average Joe) are struggling to pay off their mortgages, car loans, and credit card balances. Yes, they probably struggle less than the average Joe to pay off their debts, but struggling to pay them off may lead to excessive borrowing. Just like the average joe, the wealthy too, should avoid maintaining credit card debts and pay off loans they have as soon as possible (easier said than done.)
One of the most pressing concerns for wealthy Americans is how much they have saved for retirement. Not just retirement, but their overall estate planning, which includes paying taxes, paying off loans, ensuring you have good life insurance, managing health issues, etc.
These are all things that people across every generation should think about, even cash-strapped Millennials and Gen Z.
Taxes are going to become a concern heading into 2024: many households could see tax increases. A number of taxes enacted in 2016 are set to expire in 2026. This means taxes would increase for many families. Getting creative with estate planning is the answer.
One way to get around these tax cuts is to gift large trusts to children and other family members.
Hopefully, you’re off to a good start in 2024. You may be able to increase your wealth if you follow sound advice and do your research on estate planning. Start by doing your Will today!