Real Estate

Baby Boomers To Inherit $750 Billion In Largest-Ever Canadian Transfer Of Wealth

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  • Jun 7th, 2016 8:16 pm
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Deal Addict
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Sep 23, 2014
1927 posts
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Toronto, ON

Baby Boomers To Inherit $750 Billion In Largest-Ever Canadian Transfer Of Wealth

http://www.huffingtonpost.ca/2016/06/06 ... ref=canada

"The bank says there are currently about 2.5 million Canadians over the age of 75 with a total net worth of $900 billion or more."

It says the average inheritance received by the 50-75 age cohort over the past decade was $180,000.

No one can escape the arrow of time and from 2014/2015 - 268,056 Canadians (100K in Ontario) alone went to see their maker to enjoy the afterlife. So with the flow of time, more capital will be unleashed into the market, further stoking whatever fire we have, and setting off new embers and the seed of life for future prosperity!
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18 replies
Member
Sep 18, 2012
388 posts
323 upvotes
BRAMPTON
That works out to be a net worth of about $360K/person = not that much. When this inheritance money eventually filters down from baby boomers to gen-x and millenials, it might not be enough to cover the stagnant income growth we have been seeing for decades. Also, when you look at the distribution of that $900billion, I wouldnt be suprised to see it heavily concentrated in the hands of say the top 5-10%. The long term trend will likely be a growing gap between the rich and the poor.....much like the US.
Deal Addict
Dec 10, 2012
3618 posts
1041 upvotes
Canada
how about some stats on how much of that goes unclaimed??? Banks have got billions of dollars in unclaimed money...
Deal Addict
Nov 29, 2005
1290 posts
184 upvotes
Winnipeg
a lot of that networth is tied up in real estate. What happens when an increasing number of people enter into retirement and may end up needing to cash in their home to pay for their retirement care (assisted living, etc)? Demand for realestate will see a sizeable drop in the decades ahead...unless we completely open the immigration floodgates.
Jr. Member
Dec 10, 2011
159 posts
154 upvotes
514
Government should increase the taxes and keep that money for the CPP as the baby boomers' pension contribution is extremely low compared to what my generation will have to pay for them.
Member
Sep 1, 2013
403 posts
96 upvotes
Really doesn't mean anything at the macro level. Debit one account, credit another. Most - if not all - of those between 50 and 75 already own real estate. It may. however, affect the preference for property types on margins.
Deal Fanatic
Jul 3, 2011
5825 posts
2976 upvotes
Thornhill
Well this is a tad misleading.

Boomers will be inheriting 3/4 of the boomer wealth, which can only mean that the $900 billion is currently sitting in the 70+ crowd while their children who are at least 52 now have but a scant $150 billion between them.

I haven't read the piece because on face value it doesn't add up. The millenials are the inheritors of most of that money not the generation with a 23 year gap between them and their parents so I suspect there was an agenda of some sort behind this fluff piece.
Penalty Box
Dec 27, 2013
8003 posts
3989 upvotes
Toronto
traderjay wrote: http://www.huffingtonpost.ca/2016/06/06 ... ref=canada

"The bank says there are currently about 2.5 million Canadians over the age of 75 with a total net worth of $900 billion or more."

It says the average inheritance received by the 50-75 age cohort over the past decade was $180,000.

No one can escape the arrow of time and from 2014/2015 - 268,056 Canadians (100K in Ontario) alone went to see their maker to enjoy the afterlife. So with the flow of time, more capital will be unleashed into the market, further stoking whatever fire we have, and setting off new embers and the seed of life for future prosperity!
yeah when my boomerang parents die my sister and I inherit 5 mil.. wooooooo...

so explain to me why I need a RSP?
Deal Addict
Aug 30, 2011
3462 posts
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Ottawa
I'm a boomer, and was paying 16-20% mortgage interest while my mother was getting 21% interest on her CSBs. The over-75 age group did well, boomers less so, same with each subsequent group.
Deal Guru
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Mar 31, 2008
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Toronto
I've said this before.. alot of that $$ will be shared with those poor millennials. Or eventually passed on 30 years from now.
Deal Addict
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Mar 26, 2015
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BC
Increase in paper money - limitless debt. Something is wrong folks.
Go Raptors, Go!
Deal Addict
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Dec 23, 2015
2124 posts
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Newmarket, ON
My parents spent all their money and I will inherit almost nothing. I hate those lucky bastards who will inherit millions.
Sr. Member
Sep 11, 2011
654 posts
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Toronto
Annnnnd because of taxes, you'll either get less than half of that "inheritance" or it'll end up offshore. Thanks tax man! (or woman)
Deal Addict
Aug 30, 2011
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Ottawa
ApocDeals wrote: Annnnnd because of taxes, you'll either get less than half of that "inheritance" or it'll end up offshore. Thanks tax man! (or woman)
Incorrect. We don't have any inheritance taxes in this country. Probate may apply, but that is nothing to do with the "tax man".
Deal Fanatic
Nov 24, 2013
6214 posts
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Kingston, ON
I think people confuse taxes due on liquidation upon death of registered investments (RRSP/RRIF) with an inheritance tax.
Deal Expert
Feb 29, 2008
26697 posts
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Montreal
Mike15 wrote: I think people confuse taxes due on liquidation upon death of registered investments (RRSP/RRIF) with an inheritance tax.
WHich can be significant. If no surviving spouse exists, all RRSP/RRIF funds are added to the final year tax bill as ordinary income. In other words, 50% marginal rate of you have a few hundred grand sitting in there.

Also, all non registered investments, and non principal residences are considered to have been disposed at the time of death, triggering capital gains.

No inheritance, but it leads to a fairly large tax bill.
Deal Guru
Feb 9, 2009
11184 posts
9672 upvotes
I can imagine the gov't licking their chops at all of the trigger gains they will be collecting in the next 20-30 years.

House at 2 mil and no spouse? Tax. Capital gains? Tax.

So if $750 bil is the true number, gov't collecting a good chunk of that cash baby!
Deal Addict
Mar 10, 2011
2308 posts
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Toronto
Sanyo wrote: I can imagine the gov't licking their chops at all of the trigger gains they will be collecting in the next 20-30 years.
House at 2 mil and no spouse? Tax. Capital gains? Tax.
So if $750 bil is the true number, gov't collecting a good chunk of that cash baby!
If that $2 Million house is a principle residence, then there is no capital gains tax. It would be subject to Probate which is 1.5% max in Ontario.

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