Market Insights: Why longer lifespans could reshape portfolios 🧓

With the older generation now richer than ever in history, there’s lots of talk on how much the next generation is set to inherit.

So just how large is the Great Wealth Transfer?

By 2045, an estimated $84 trillion is expected to pass to Millennial and Gen X heirs in the US. Of that total, about $16 trillion is set to change hands within the next decade alone.

Today, we’ll be walking through what next generation of markets are set to look like… and how our aging population will impact some sectors. While we’ll be focusing on US retirement figures today are these are the most publicized, this analysis more than likely permeates the global market.

What Happened In Markets This Week?

🌍 Trump tariffs risk isolating US from global trade ( ABC News )

• What happened: Trump’s floated tariffs on 10 countries, including allies like Canada and Germany, have triggered warnings that the US could be sidelined in future trade deals. Global partners are already cutting deals without the US.
• How it impacts investors: Escalating trade tensions could fuel long-term supply chain shifts and reduce global demand for US goods. In the short term, expect volatility, especially in autos, agriculture, and commodities.
• Next steps: Use our Discover function to find investing ideas in sectors and investment narratives that we’ve curated. Use the Stock Screener tool to customize your search.

📱 Apple can’t secure enough chips for surging iPhone demand ( Bloomberg )

• What happened: Demand for the iPhone 17 is outpacing Apple’s chip supply, with suppliers struggling to ramp up chip production. Some regions are reporting month-long waitlists for top-tier models.
• How it impacts investors: Supply constraints could cap iPhone sales growth in the near term, even as demand surges. It’s a reminder that Apple’s AI push is still hardware-dependent and bottlenecks matter.
• Next steps: Review Apple’s metrics to find out how much this bottleneck could impact future revenue.

🚀 OpenAI eyes Q4 IPO to beat Anthropic to the market ( WSJ )

• What happened: OpenAI is reportedly preparing to go public in late 2026, aiming to get ahead of Anthropic’s anticipated IPO. It could be one of the biggest listings of the year, driven by surging enterprise demand for its models.
• How it impacts investors: The AI IPO wave is heating up. OpenAI’s move could set new valuation benchmarks for the entire sector. But it also raises questions about capital intensity and competitive pressure in a still-early market.
• Next steps: Dive into our high growth tech & AI screener to monitor similar companies and explore second-order winners (think chipmakers, cloud infra, and enterprise platforms).

🧠 Microsoft dives 10% in a day after earnings miss ( CNBC )

• What happened: Microsoft dropped 10% on Thursday, wiping $357 billion in market value, its worst one-day loss since 2020. Despite 39% growth in Azure, that figure came in just below consensus, and investors were spooked by weaker guidance for Windows and operating margins.
• How it impacts investors: The sell-off shows how unforgiving markets are when AI growth doesn't meet sky-high expectations. Microsoft’s prioritisation of internal tools like Copilot over cloud customers raised questions about strategic focus.
• Next steps: Watch how Microsoft reallocates its AI compute and add the stock to your Watchlist to stay notified if analysts change their price targets.

👟 Adidas forecasts record sales in 2025 despite global turbulence ( CNBC )

• What happened: Why longer lifespans could reshape portfolios. sees double-digit growth for Q4 and projects all-time record sales in 2025, thanks to strong demand in North America and China. It’s a rebound story. After a rocky 2023, it regained ground with direct-to-consumer and premium lines.
• How it impacts investors: This shows global consumer resilience in discretionary spending. Adidas is also riding margin tailwinds from a cleaner inventory position.
• Next steps: Check out our Retail sector screener to see how peers like Nike and Lululemon are trending, especially in China-exposed consumer names.

📈 The Great Wealth Transfer is here (for some) and a new generation is ready to invest

Nearly 40 years ago, total U.S. family wealth adjusted for inflation stood at approximate ly $38 trillion.

Today, it is close r to a staggering $140 trillion.

Wealth on this scale will unsurprisingly influence markets, investment behavior, and financial planning for generations to come.

However, the transfer of this wealth may be slower and more uneven than you’d expect.

Baby Boomers, who control roughly half of the nation’s wealth, are also living a lot longer than previous generations, even as their overall health has deteriorated. Researchers describe this as “generational health drift,” where those born after 1945 are less healthy than prior generations at the same age.

So while enormous sums of money are poised to move between generations, the timing, magnitude, and distribution of those transfers remain uncertain.

Longer lifespans mean assets may be consumed rather than passed on.

💰 The Current State of Retirement Wealth

With that said, t he idea that “the rich are getting richer” has never been more accurate.

In the US, the wealthiest 1% now hold as much wealth as the bottom 90% combined. According to Teresa Ghilarducci, a leading eco nomist and retirement expert, the median inheritance for that bottom 90% is close to zero.

This concentration of wealth persists even as Americans approach retirement.

Research published in Review of Political Economy shows that among individuals aged 51 to 56, i.e. those nearing the median retirement age of 62, median wealth increased only for the top 10% between 1992 and 2016.

F or everyone else, wealth actually declined. For the bottom 90%, Social Security is still the primary source of retirement support.

Even that backstop faces pressure. Social Security's retirement trust fund will be insolvent by late 2032. Something will have to give.

💸 How retirement wealth has changed

The CFA study No Rest for the Weary: Measuring the Changing Distribution of Retirement Wealth in the United States highlights the divergence clearly:

Bottom 50%

1. Median wealth declined by $164,600
2. Median primary residence net of mortgage debt fell by $61,900
3. Median retirement savings and benefits (DC, DB, IRA) dropped by $42,200

Next 40%

1. Median wealth fell by $1,800
2. Median primary residence net of mortgage debt fell by $9,600
3. Median retirement savings and benefits (DC, DB, IRA) dropped by $1,700

By contrast, the top 10 percent of older households saw median wealth increase by $881,000.

⚖️ So what this all mean for the Great Wealth Transfer and markets?

But while Baby Boomers collectively hold nearly $80 trillion of the nation’s $140 trillion in wealth, inheritance outcomes are still far from guaranteed.

Studies show that half of Boomers do not expect to leave an inheritance , and nearly 25% are unsure. A major contributor is debt: many Boomers are entering retirement still carrying substantial mortgage balances.

At the same time, expectations among younger generations remain high. Research from Cerulli Associates finds that:

1. 31% of Americans expect to inherit money within five years
2. 55% of Millennials expect to inherit wealth in that timeframe
3. 41% of Gen Z share the same expectation

The disconnect is interesting. While many households expect, and may even depend on, an inheritance, the underlying state of retirement wealth suggests that much of the Great Wealth Transfer will primarily involve wealth moving between already-wealthy families.

So for the next generation of investors, this implies that the Great Wealth Transfer may reinforce existing inequalities rather than resolve them, and that relying on inheritance as a financial strategy carries significant risk.

👩‍⚕️ Now let’s look at the Longevity Effect a.k.a. the aging population

Aside from looking at how much people are passing on to the next generation, let’s also look at an indisputable fact – people are living longer, and that longevity is putting increasing pressure on retirement savings.

In the US, it is estimated that most men aged 55 will live to 83 and most women of the same age to 86.

Even a few additional years of life can materially erode wealth, largely because healthcare costs tend to surge late in life.

In inflation-adjusted dollars, total health s p ending on a per capita basis increased from $2,208 in 1970 to $15,474 in 2024. So whole lifespans are rising, healthspans are not, which means more years lived with costly medical needs.

How an aging population could impact the Healthcare Sector

• In about four years 1 out of every 5 Americans will be of retirement age, defined as 65 or older. This milestone will be the first time in US history that older people are expected to outnumber children.
• Individuals 65 and older now represent about 34% of the demand for physicians, and in about 8 years they will account for 42% of the demand.
• Roughly 90% of seniors intend to remain in the i r cur r ent homes as they age, resulting in a dramatic increased demand for at-home care services.

Research forecasts a surge in the healthcare sector in the coming years, with subsectors such as anti-aging and biotech also set to boom as the industry attracts more funding and demand.

In fact, a new and emerging industry called longevity therapeutics is now starting to get into analysts’s radars.

Taken together, longer lives and rising healthcare costs suggest that even historically wealthy generations may see their savings decline in the years ahead. Consider that:

1. Assisted living and nursing care can cost $80,000 to more than $150,000 per year
2. A majority of older adults are projected to require some form of paid long-term care

The financial risk of longevity, once underestimated, is becoming harder to ignore.

📊 So how will the Great Wealth Transfer impact markets in the future?

Younger generations are approaching investing with a higher tolerance for risk and a clear willingness to act on it.

A Betterment survey found that 64% of Gen Z and 49% of Millennials are willing to take on more investment risk. The same research showed that 60% of Gen Z and 55% of Millennials prefer single stocks for short-term gains and perceived higher returns, compared with just 44% of Baby Boomers.

In fact, most Boomers were not invested at all in their 20s. Research from Charles Schwab found that, on average, Boomers started investing at 35.

A separate survey of 2,000 investors reinforces this pattern. Gen Z and Millennials are significantly more likely to hold crypto-related stocks (23% and 28%, respectively) than Gen X (16%) and Boomers (8%).

The study also found that younger investors are slightly more likely to have invested in AI-related stocks, showing their preference for emerging and future-oriented sectors.

Broader research shows that this risk appetite extends beyond individual stock selection. Younger generations are putting money to work earlier and across a wider range of assets:

1. 30% of Gen Z began investing in early adulthood, compared with 15% of Millennials, 9% of Gen X, and 6% of Baby Boomers
2. Younger investors hold crypto- and tech-focused ETFs at higher rates than older cohorts
3. Many are branching into digital assets, collectibles, private markets, and fractional ownership, often through fintech platforms that lower traditional barriers to entry

💡 As these generations enter their prime earning years, many recognize that achieving financial security, requires sustained participation in equity markets. So rather than avoiding volatility, many are leaning into it and using riskier assets as a potential accelerant.

Where will the next generation invest their money?

So if the current investing activity of the younger generation persists, what sectors or markets would outperform?

Data shows that we’re likely to see an influx of capital into riskier assets. 72% of surveyed millennial and Gen Z investors believe “it’s no longer possible to achieve above-average returns solely on traditional stocks and bonds.”

The most popular assets among investors aged 21 to 43 are now real estate investments, crypto/digital assets, and private equity. Today, US Gen Z investors 18 and over primarily invest in:

• Cryptocurrency (55%)
• Individual stocks (41%)
• Mutual funds (35%)

While an influx of cash from eager generations of new investors could push stock prices higher, it’s not a foregone conclusion that valuations will get out of control. The reason: if earnings continue to be strong - especially as they have been in tech - P/E multiples could remain in a reasonable range.

✨ The Insight: Younger Investors Are Likely to Provide Ongoing Market Support

Retail investors, particularly younger ones, have shown a consistent willingness to buy into markets even during periods of stress. That behavior is likely to intensify as the Great Wealth Transfer places more capital in their hands.

Younger investors have also seen market drawdowns as a buying opportunity rather than something to be feared.

For example, retail investors bought roughly $50 billion in stocks following the tariff announcement that sent the S&P 500 down more than 10% in just two days. Their timing proved prescient: the market soon experienced the fastest S&P 500 snapback in 43 years.

And this younger cohort’s influence is no longer marginal. Research shows that “absent the surge in retail trading activity, the aggregate market capitalization of the smallest size quintile of stocks would have been approximately 20% lower . ”

💡 Sometimes, the wisdom of the crowd does pay off. Investors looking to ride this wave may consider allocating a portion of their portfolios to stocks that have been hit hard but could rebound as retail participation continues to provide support.

If you are looking for companies that have experienced a dip following continued gains, start with this screener.

Investors can also join the crowd the the “ Millennials Thematic ” screener which focuses on companies benefiting from the rise of millennials, from entertainment to mobile apps.

Key Events Next Week

Tuesday

• 🇦🇺 RBA Interest Rate Decision
  • 📈 Forecast: 3.85%, Previous: 3.6%
  • ➡️ Why it matters: Inflation is proving sticky, and markets are starting to price the risk of another rate-hike cycle. A hawkish RBA would likely hurt rate-sensitive stocks, support the AUD, and reinforce a “higher for longer” outlook.
• 🇫🇷 France Inflation Rate YoY (Prelim)
  • 📈 Forecast: 0.8%, Previous: 0.8%
  • ➡️ Why it matters: France is an early signal for eurozone inflation. Continued weakness would strengthen expectations for ECB rate cuts and generally support European equities.

Wednesday

• 🇪🇺 Eurozone Inflation Rate YoY (Flash)
  • 📈 Forecast: 2.0%, Previous: 1.9%
  • ➡️ Why it matters: Inflation near target gives the ECB room to ease. If confirmed, it supports lower rates and a more favourable backdrop for equities.

Thursday

• 🇬🇧 Bank of England Interest Rate Decision
  • 📉 Forecast: 3.75%, Previous: 3.75%
  • ➡️ Why it matters: Rates are expected to stay on hold. Investors will focus on tone… any hint that cuts are delayed could pressure UK shares and lift bond yields.

Friday

• 🇪🇺 ECB Interest Rate Decision & Press Conference
  • 📉 Forecast : 2.15%, Previous : 2.15%
  • ➡️ Why it matters : The decision matters less than the messaging. Clear confidence on inflation would increase expectations for rate cuts and support risk assets.

It's another exciting week for markets next week as earnings season continues to ramp up. The following companies are set to report:

1. Palantir Technologies
2. Disney
3. AMD
4. Alphabet
5. Toyota
6. Uber
7. Amazon
8. Shell

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Simply Wall St analyst Stella and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. Any comments below from SWS employees are their opinions only, should not be taken as financial advice and may not represent the views of Simply Wall St. Unless otherwise advised, SWS employees providing commentary do not own a position in any company mentioned in the article or in their comments.We provide analysis based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.