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The 'Great Wealth Transfer' Is Hitting a Speed Bump
Newser • • business
Key Points:
- The anticipated "Great Wealth Transfer" from baby boomers to heirs is being significantly impacted by the rising costs of aging and long-term care, which are depleting the savings many older Americans planned to leave behind.
- A Washington Post analysis reveals that the proportion of people dying with no assets left after paying for care nearly doubled from 6% to 11% between 2006 and 2022, with 41% of the poorest fifth having nothing left.
- High annual costs for assisted living and nursing homes, often between $75,000 and $130,000, are not fully accounted for in these figures, exacerbating financial strain on families.
- Medicare rarely covers long-term care, and few Americans have private insurance, forcing families to sell homes, use inheritances, and deplete savings to pay for care, often resulting in reliance on Medicaid.
- Medicaid's "estate recovery" rules can reclaim remaining assets, including family homes, further reducing the wealth passed on to future generations, especially among middle-class families.
