NOTEBOOK – ONE GOOD READ: Older Americans have saved trillions. Now what?
KATHY A. BOLTEN Jul 7, 2021 | 2:44 pm
1 min read time229 wordsAll Latest News, Banking & Finance, Business Record Insider, Culture, The Insider Notebook
Baby boomers and older Americans have saved trillions of dollars over the past several decades and now they have started handing it out to heirs and others, write Ben Eisen and Anne Tergesen for the Wall Street Journal. According to data from the Federal Reserve, at the end of March, Americans 70 and older had a net worth of nearly $35 trillion, or about 27% of all U.S. wealth. Cerulli Associates, a research and consulting firm, has estimated that between 2018 and 2042, older Americans will hand down $70 trillion, with the majority going to heirs and the rest to philanthropy. And people aren’t waiting until they die to share their wealth, write Eisen and Tergesen. Annual gifts that taxpayers reported to the Internal Revenue Service rose to $75 billion in 2016, from an inflation-adjusted $45 billion in 2010. Real estate agents say more young homebuyers are getting help from their parents with down payments and other costs. The Wall Street Journal reports that the Biden administration, aware of the pending wealth transfers, has proposed reducing a tax break “that has been the cornerstone of estate planning for generations of Amercians.” The Biden proposal would raise capital gains taxes and would tax unrealized gains when the owner died. Currently, capital gains taxes aren’t paid until an asset like stock, a family vacation home or a business is sold.