Can You Guess How Much You Need to Build Generational Wealth? Some Say It's Less Than What It Takes to Feel 'Rich'

What's the magic number for generational wealth? Is it $1 million? $10 million? More? The truth is, there isn't a one-size-fits-all answer. Wealth means different things to different people, but when it comes to passing down money that lasts for multiple generations, experts have attempted to put a number on it.

According to some sources, the amount needed for generational wealth may actually be less than what most Americans think they need just to feel "rich."

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How Much Do Americans Think It Takes to Be Wealthy?

Charles Schwab's 2024 Modern Wealth Survey determined  Americans now believe it takes $2.5 million to be considered wealthy. This figure has inched up from $2.2 million in 2023 and 2022, reflecting the impact of inflation and rising living costs.

Breaking it down by generation:

• Boomers set the highest bar at $2.8 million
• Gen X comes in at $2.7 million
• Millennials and Gen Z believe the threshold is lower, though still in the millions

So, if Americans believe they need around $2.5 million just to be "rich," how much do experts say is needed to create lasting wealth that can be passed down for generations?

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The $1.5 Million Per Child Benchmark

James McCarthy, an advisor with Nicola Wealth in Vancouver, suggests that generational wealth starts when an estate can comfortably provide at least $1.5 million per child, according to the  Financial Post. While that number might not fund an extravagant lifestyle indefinitely, it can provide a meaningful financial foundation—especially when combined with smart investments and estate planning.

But that's on the lower end. Other experts suggest much higher figures.

The $10 Million Mark

According to Financial Samurai, $10 million is the baseline for true generational wealth. Why? Because this amount can provide long-term financial security while allowing investments to continue growing. If managed wisely, $10 million can generate $300,000 to $500,000 in annual income, assuming a 3% to 5% withdrawal rate—enough to sustain a comfortable lifestyle without depleting the principal.

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The Estate Tax Exemption: A Benchmark for the Ultra-Wealthy

Some argue that generational wealth begins where estate taxes apply.

In 2025, the estate tax exemption is $13.99 million for individuals and $27.98 million for couples.

If your estate surpasses these limits, your heirs could face significant tax burdens—unless you've structured your wealth properly. In this view, generational wealth isn't just about a number but also about tax efficiency and strategic estate planning.

A More Attainable Figure? $5 Million Rule

Not everyone agrees that eight figures are necessary. Wealth Factory suggests that a $5 million net worth can be enough to provide financial stability across generations. When diversified across real estate, investments, and cash, $5 million can sustain wealth over time—assuming future generations manage it wisely.

What Wealthy Americans Actually Plan to Pass Down

While expert opinions vary, how much are wealthy families actually leaving behind? According to a Charles Schwab survey on generational wealth released in December, the average wealthy American expects to pass down $4.1 million in assets. Here's how it breaks down:

• 40% in real estate ($1.6 million)
• 31% in investments ($1.3 million)
• 18% in cash ($740,000)
• 11% from life insurance proceeds ($440,000)

For ultra-high-net-worth individuals (those with $10 million or more in investable assets), the number jumps to $11.9 million, with some even fearing they may be leaving too much behind.

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Beyond the Numbers: Real Estate, Investments, and Estate Planning

Generational wealth isn't just about a lump sum of cash. Many families pass down wealth in the form of:

• Real estate – Primary homes, rental properties, and commercial buildings
• Businesses – Family-run enterprises that continue generating income
• Investments – Stocks, mutual funds, and other assets that appreciate over time
• Life insurance – Providing a financial safety net for heirs

One major takeaway from the Schwab generational wealth survey? Estate planning is crucial. While 57% of wealthy Americans have a will, far fewer have a trust (34%), which could help minimize taxes and protect wealth. More than half (56%) work with a financial advisor, proving that maintaining generational wealth takes more than just a large bank balance.

What's the Right Number for You?

There's no universal answer to what qualifies as generational wealth, but one thing is clear—it's about more than just a dollar amount. A solid financial plan, diversified assets, and smart estate planning matter just as much as the size of your nest egg.

So, while many Americans dream of hitting the $2.5 million "wealthy" threshold, building lasting wealth for future generations requires a bigger plan—one that goes beyond just having money to spend.

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