It is fun (although sometimes contentious) to talk about generational differences and stereotypes; Gen Z vs. Millennials is a current war of sorts, Gen X has carved their own path, and of course, the Baby Boomers. Most everyone understands the dynamics of the Baby Boomers; born in the wake of World War II, were a gigantic generation that grew up through some of the best times of our history, some of the most divisive times of our modern history, and are now largely retired.
But not too many people talk about the implications of the largest generation of people entering retirement (and unfortunately, starting to pass away in larger numbers). Namely, a gigantic ongoing opportunity in the way of the largest wealth transfer in global history.
What is that? It is a total of $62 trillion of economic impact transferring hands. It is over a million businesses that need a succession plan, or to be sold. It is skyrocketing amounts spent on health care, leisure, and fulfilling retirement goals. And again, unfortunately, it will be a stunning amount of assets passed on to heirs.
Sadly enough, actual planning for these certainties is often overlooked. It is estimated that 40-50% of Baby Boomer business owners don’t have a succession plan, and without a plan private equity will undoubtedly swoop in and bargain prices down, or worse yet, pick apart the business owner’s life’s work and sell it for scrap.. Without a spending plan, retirees might get blindsided by end-of-life costs or general healthcare costs. And without a proper will, assets will generally go into probate before reaching your loved ones (if they do).
So what is a generational opportunity for some, either those with capital and the leverage or high-margin businesses with a corner on the market, will take advantage of this opportunity, often at a loss to the retiree. And since many of our readers are in the Baby Boomer generation, we find that unfortunate.
Moral of the story? Talk to experts and have a plan. Certified Financial Advisors are good for planning your financial assets, as they are fiduciaries and are able to take a bigger view of your retirement. Talking to an estate attorney would be wise if you have significant financial assets. And especially if you’re a business owner, consider talking to independent advisors as to how to value your company and test the market for potential buyers, unless you want to pass it on to your kin, in which case you should consult with an attorney and make sure that’s buttoned up.
You worked hard to put yourself in a great position for retirement; just because you’re retired doesn’t mean you should fall asleep at the wheel of your life when it matters most.