Spend, save or give it away - you choose


While many seniors leave money to the kids and others leave it in the bank, some are giving away the surplus to save the planet.

Key Points


  • Boomers spark generational wealth transfer
  • Boomers control roughly 70 per cent of all disposable income
  • Wealthy retirees form philanthropic foundations to spend it all on climate action

One of the largest transfers of wealth in history will occur in the next few years, depending on the health and goodwill of the Baby Boomer generation.

According to US demographic figures, Boomers are the wealthiest generation in history and are currently the custodians of about USD68 trillion in assets, says Cerulli Associates, a US research firm.

According to Forbes, Boomers control roughly 70 per cent of all disposable income and have vastly differing attitudes to their parents and their heirs.

As heirs, Millennials will do very well - they will be five times richer in 2030 than they are today due to this transfer of wealth. And that figure is just for the US. In Australia, Millennials will inherit AUD3.5 trillion over the next 20 years, an average of $320,000 per person.

But that’s if Boomers leave it to their kids and grandkids!

"According to Forbes, Boomers control roughly 70 per cent of all disposable income and have vastly differing attitudes to their parents and their heirs."

What if they don’t?


Some wealthy retirees are setting up private philanthropic foundations. There are 1,600 in Australia. Most foundations operate through the investment of a main sum and profits are used to generate sustainable income for grants.

But a growing number of Australian philanthropists are designing foundations to run out of money.

It’s a gloomy way of looking at the future, but apparently, they see no point in continuing giving beyond the next decade — unless climate change is addressed.

ABC Money profiled several of these philanthropists including Sue McKinnon and her husband John who will give away about $10 million over 10 years.

Initially, their family foundation was to have continued well into the future but Sue says "the best legacy we could leave is one of avoiding catastrophic climate change".

"I know Australia is a small place, but it's a big actor on the world stage when it comes to fossil fuels, social license and the control and influence that various players here have," she said.

"Our view is that what we do in the next 10 years, or maybe even the next five years, will absolutely be absolutely key to the eventual outcome. Let's do it now." - Queensland retirees Jeff and Julie Wicks

"We decided that more needs to be thrown at it, we need the best brains and the most money in the room."

Queensland retirees Jeff Wicks and his wife Julie decided they had more than enough money to live on and they wanted to give the rest away.

"Our view is that what we do in the next 10 years, or maybe even the next five years, will absolutely be absolutely key to the eventual outcome. Let's do it now," Jeff says.

The ACME Foundation directs money to about 25 or 30 different organisations. One of them is the climate change think tank, Beyond Zero Emissions.

Meanwhile, Norman Pater wants to spend $40 million in the next 10 years.

He bought three farms in WA’s wheat belt, each about 2,000 hectares, which are being reforested as part of his Carbon Farming Foundation. "Our immediate goal is to revegetate biodiversity, at least one million hectares," the former IT entrepreneur says.

His new farms will develop, test and scale carbon farming models.

"At the end of the day, we want to make carbon farming profitable, such that many other farmers start to engage in the same activity," Norman says.

Sources: ABC News and Firstlinks