The much-anticipated transfer of wealth from baby boomers to their heirs may be significantly smaller than projected, according to a new analysis from San Diego-based Dunham & Associates Investment Counsel. The paper, authored by Salvatore M. Capizzi, the firm's executive vice president, argues that retirement plans designed for shorter lifespans could turn the so-called Great Wealth Transfer into a "Great Wealth Mirage."
Capizzi's research models a hypothetical $1 million portfolio with $40,000 in first-year withdrawals, increasing by 2% annually to keep pace with inflation. At a 4% net annual return—a figure many advisors consider prudent—the account is depleted in year 34. Even at a 5% net return, the portfolio lasts only until year 43. The paper suggests that for retirements lasting 40 years or more, portfolio returns may need to exceed inflation by 4 to 5 percentage points, implying net returns of 6% to 7% given the Federal Reserve's 2% inflation target.
The research adds to a growing body of work that questions the scale of the wealth transfer. Visa projects that approximately $36 trillion of baby boomers' $93 trillion in assets will pass to Gen X and millennial heirs over the next two decades, but Dunham's analysis suggests that figure could be optimistic. The paper also highlights the impact of rising costs, using food spending as an example. Assuming a couple with $100,000 in disposable income spends 9.7% on food (the 2025 USDA average) and that food prices rise 3.55% annually, the couple would spend nearly $2.6 million on food over 50 years. By year 50, their annual food bill would exceed their starting income.
Survey data from Longbridge Financial's 2026 Home Equity Confidence Index underscores the financial pressures facing older Americans. Among homeowners aged 55 and older, 67% cite inflation and the rising cost of living as a leading concern, far ahead of health care costs (43%), property taxes and home maintenance (38%), and homeowners insurance (26%). Confidence in personal finances varies sharply by income: 76% of households earning $100,000 or more feel confident about long-term financial security, compared with just 39% of those earning less than $50,000.
Capizzi also describes a "multi-generational squeeze," where adult children and grandchildren may end up supporting longer-living relatives who have outlived their assets. In such cases, the inheritance disappears, and heirs must fund their own retirements while also assisting older family members. The paper further argues that the standard view of sequence risk is incomplete. In one example, two retirees each average a 5% return over 48 years and make identical withdrawals. The retiree who earns lower returns early runs out of money in year 27, while the one who earns higher returns early still holds more than $1.9 million at the end.
The timing of inflation also matters. Two retirees each earn 6% net returns, with inflation averaging 2.5% over 40 years. The retiree whose inflation rises over time remains solvent, but the one who faces the highest inflation first runs out of money by year 37. These findings suggest that advisors should stress-test retirement plans against longer horizons and variable inflation scenarios.
For advisors, the implications are clear: the wealth transfer may not be as large as expected, and clients may need to adjust their retirement strategies. As wealth transfer projections overstate the pace, advisors should consider more conservative return assumptions and plan for the possibility that inheritances may be reduced or delayed. The research also echoes concerns raised in preparing heirs for wealth, emphasizing that financial readiness is as important as asset transfer.
Dunham's analysis serves as a cautionary note for the financial advisory community, urging a re-evaluation of long-term retirement planning assumptions. With the potential for portfolios to run dry decades before the end of a 40-year retirement, the "Great Wealth Transfer" may indeed become a mirage for many families.
