How Women Are Reshaping the Biggest Wealth Transfer in Modern History
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Here's your Money Briefing for Thursday, January 30th. I'm Ariana Aspudu for The Wall Street Journal. Baby boomer women are leading one of the biggest wealth transfers in modern history. And they're now deciding the fate of trillions of dollars. We're really starting to see this shift where women who are in their 60s and 70s are finding themselves in control of their family's finances, whether it's due to divorce or the passing away of a spouse.

And that's pretty significant because 50 years ago, this same generation of women weren't even allowed to open credit cards in their name or own their own home. Wall Street Journal personal finance reporter Oyin Adedoyin joins me to discuss how these women are managing their money after the break.

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More women over the age of 60 are now having the final word on their family finances and handling the money differently than their spouses. Wall Street Journal personal finance reporter Oyin Adedoyin joins me. Oyin, where is this shift coming from? Well, to get a sense of this shift, we have to look at the baby boomer generation, which is the wealthiest generation currently in the U.S. They have about $82 trillion. And now we're looking at their wives because they're

Demographically, women tend to outlive their husbands and a record number of Americans turn 65 this year. Odds are more of those are women compared to men. So we're really starting to see this shift where women who are in their 60s and 70s are finding themselves in control of their family's finances, whether it's due to divorce or the passing away of a spouse.

And that's pretty significant because 50 years ago, this same generation of women weren't even allowed to open credit cards in their name or own their own home. Which is not that long ago. It's not that long ago at all. It was really kind of shocking when Catherine and I were reporting out the story and found that out. And so we really wanted to get a better sense of how these women are feeling coming into lots of wealth.

What are the women that you spoke to doing with their money? Women tend to have more of an eye out for longevity, thinking about future health care costs. They don't want to be a burden on their families once they get older and may fall ill. Women are also switching financial advisors. Often when they come into this wealth, it's a bit of a shock. And maybe their husbands were the ones who were primarily taking control of planning out the family's finances and thinking about estate planning and things like that.

So usually women are coming into this cold and immediately switching to a financial advisor who they feel more comfortable with or who is recommended to them. A lot of women are also choosing to invest this money as well as put it towards travel or other plans. And what are those financial advisors saying about this? Well, I spoke to a financial advisor named Matt Cooley. He's the founder of an Idaho-based

wealth management company called Inspire Wealth Partners. And he said that one of his newest clients actually is a widow whose husband died in the summer of last year. When they first met, she didn't even know like the password for her account. She had no idea how much money was in her possession. I think he asked her to guess and she estimated maybe like a couple hundred thousand.

And once they were finally able to access her accounts, they found that she was in control of a whopping $2 million. So it's kind of like a clean slate new financial advisor to just kind of diagnose everything that you have. Yes, exactly. And that's where, you know, the magic really happens, so to speak, in this story where women start to take agency and maybe shift the priorities that may have been set by their husbands.

So what other financial decisions are they making? Women tend to invest with more of a focus on protecting capital by holding stable assets and bonds with long duration yields. But that's not always the case. I spoke with a woman named Janet who lives in Florida in a country club community. And when her husband died in 1993...

Half of his money went to her and the other half went with his three children. She put about 60 percent of that money in stocks and 40 percent in fixed income. But since then, she's actually gotten more aggressive, putting 80 percent of that money in stocks. And she says it's because she owns two homes. She has remarried. She feels really comfortable in the assets that she does have. So why not ride the stock market all the way?

And in your story, you reference a really interesting number. Last year, American women over 60 controlled about $8 trillion of liquid wealth assets, according to McKinsey & Company's Affluent Consumer Survey. How has this number grown in the past few years? It's grown pretty significantly.

That was one of the big questions that Catherine and I wanted to dig into when we started reporting this story because everyone has heard of this great wealth transfer that's supposed to move trillions of dollars into the hands of women. But we wanted to see how much of this transfer has already happened. Women's wealth as a whole has grown by about 80 percent since 2018.

which outpaces the 62% growth in total wealth over that span. This means that women are coming into wealth at a faster rate than the rest of the population. And why is this milestone so meaningful? It's meaningful because it's giving us an idea of where this money is coming from. We're looking at our grandmothers, we're looking at our mothers, and...

We're really seeing what their priorities are as opposed to maybe our grandfathers and our fathers. Women tend to think more long term. They tend to give more to charity and they tend to want to set things up financially for their kids and their grandkids. So this money is eventually going to make its way to millennials and some Gen Zers as well. So I think it's really important to see kind of where it's coming from. I always joke about.

that women in their 60s and 70s are like the first frontier of the wealth transfer in a way. So it's going to stay with them for a bit, but then it's going to move on. And I think this story gives us a better idea of where it's going. What things should someone consider if they find themselves in this position now or sometime in the future? Financial advisors are saying that couples are already starting to think about this. Couples who are maybe older are starting to

split the financial responsibilities more evenly. So they're seeing less cases where it's just the man meeting with the financial advisor. I spoke with an advisor who is meeting with a retirement age couple and they've built their wealth together. And recently, the wife actually asked her to have one-on-one sessions. She really wanted to get the basics down so that when she was in meetings with all of them, she was more up to speed and could contribute better. And, you know, in the event that

potentially her husband does pass away, she's got a little bit more control about what's happening rather than maybe being blindsided or having to learn right then and there what to do. So being kind of proactive with your finances and just knowing sort of what's happening with your spouse in that time so that if things happen, it's less of a burden. Exactly. And that's a trend that financial advisors are seeing more of with younger generations as well, that agency and that sense of being more proactive about what the plan is.

That's WSJ reporter Oyin Adedoyin. And that's it for your Money Briefing. This episode is produced by Jess Jupiter with supervising producer Melanie Roy. I'm Arianna Aspuru for The Wall Street Journal. Thanks for listening.