The children of the country’s oldest generations, along with countless charities, are in line to inherit more than $84 trillion by 2045. But in many cases, the wealth won’t go directly to them: Since women statistically outlive men, a significant chunk of the “great wealth transfer” will first go to widows.
Research firm Cerulli Associates estimates that of the $84.4 trillion to be transferred, $72.6 trillion will go to family members and other heirs, and $11.9 trillion will be donated to charities. The generations preceding the baby boomers are projected to transfer $15.8 trillion, most of it over the next decade. But the bulk of the wealth transfer, more than $53 trillion, will originate with baby boomers, Cerulli projects.
Worth noting: The growing popularity of living legacies, in which wealth is given away during one’s lifetime, means many of the individuals donating to younger generations and charities will be around to see the results of their generosity.
Financial advisors are taking steps to prepare female clients for the increase in financial responsibilities after their husbands die—in part to ensure they remain clients after their spouse dies.
“The key to keeping widows as clients is that it starts long before a spouse passes away,” says Morgan Stanley advisor Deborah Montaperto. “It starts by building trust, making sure they’re comfortable asking questions, and making sure you’re speaking to both people in the meetings.”
Although reliable statistics aren’t available, advisors agree that it’s common for women to leave advisors after their husbands die. The prime reason appears to be that too many advisors focus their attention primarily on the men—whom they assume to be the decision makers—and discount the perspectives of their wives. Newly widowed women then vote with their feet, says Montaperto: “You can’t show up after the funeral and say, ‘Well, now I really care about charitable endeavors, or helping you with the kids, or helping you understand what’s been going on.’”
Forward-thinking advisors seek to involve both spouses, and often their heirs, in planning as early as possible. “If the women feel like they’re the client, and not just their spouse, I think that will really make sure that women stay with your practice,” says Ali Flynn Phillips, president of Obermeyer Wealth Partners.
When advisors begin working with a widow, the couple’s broad estate plan may stay intact, but spending priorities might change. Marla Petti, an advisor at MAI Capital Management, says the first step in this stage of life is reassessing the widow’s financial goals. “They may be the same, they may be different, but we’ll adjust the investment strategy to reflect the new risk tolerance and the new cash-flow needs,” she says.
Cash-flow needs might change because of reduced travel. A widow may downsize real estate. When widows start spending less, they may choose to provide more support for family members. Estate plans are revisited over time to make sure beneficiary designations are up-to-date.
Along with financial guidance, advisors typically will lend new widows emotional support. That is especially true if they have spent years building an inclusive relationship with both spouses. “I am often one of the first people a client will contact when their husband is in hospice or their husband dies,” says Merrill Lynch advisor Debbie Jorgensen. “I’ve gotten comments like, ‘Debbie, you’re not only our financial advisor, but you’ve also been a friend and confidant to the family over all these years.’”
The Shrinking Retirement Savings Gap
One of the most important advances women have made when it comes to investing is narrowing the disparity in retirement savings with men. Although the average baby boomer woman’s retirement balance is 63% of male counterparts, the gap has narrowed steadily with each new generation. Gen Z women’s balances are 98% the size of men’s.
Earlier generations trailed men in retirement savings because of factors like the gender pay gap and more frequent career interruptions for caregiving. What’s more, women on average live five years longer than men, necessitating more retirement savings.
How have younger women narrowed the retirement-savings gender gap? One clue comes from a 2024 TIAA study, which found that by a 54% to 44% margin, more Gen Z women than men were using 401(k) plans to save for retirement. Gen Z is young, with the oldest members not yet age 30. The generation’s savings gap could widen if women start working less—thus contributing less to workplace plans—as they have children or take care of aging parents. But the steady progress seen from baby boomers to Gen X to millennials suggests the narrowing gap isn’t a statistical fluke.
Investing With Care
Women as a group tend to describe themselves as careful investors, with 97% identifying as “conservative” or “moderate,” according to a Fidelity Investments survey. But Gen Z women are proving to be less conservative.
Being a conservative investor can mean you’re a less confident investor, or that you’re so well off that you can afford to play it safe. But it can also signal patience and an understanding of the long-term power of compounding. “I think there is a misconception that being conservative means you’re not going to have good long-term gain,” says Obermeyer’s Phillips. “Our job as advisors is to make sure our clients have the appropriate amount of conservatism, but not too much.”
Moderate-risk investors—which describes the bulk of Gen Z women—are comfortable taking on more risk to build long-term wealth. But they, like many women, are less likely to chase returns or to try to time the market, says Morgan Stanley’s Montaperto. “They are somewhat more long-term focused, more disciplined, with less frequent trading or knee-jerk reactions to the market” compared with men, she says, referring to women in general. “They may be thinking of their family and their legacy, as opposed to how much money they might be able to make this month or this year.”
Few women describe themselves as aggressive investors—which suggests day trading or dabbling in options or crypto—and even fewer Gen Z women do. That probably isn’t a bad characteristic for the average investor to have, because you can lose your shirt by engaging in short-term trading, and many successful long-term investors use a buy-and-hold strategy. “Women tend to focus on their financial goals versus, ‘How did the market do?’” says MAI Capital Management’s Petti. “They prioritize wealth preservation over aggressive investing.” Still, very wealthy investors with money to burn can be forgiven for taking a big swing every so often.
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