Generation Z, born roughly between 1997 and 2012, is no stranger to financial hardship. From struggling with high unemployment rates to being priced out of the housing market, they are navigating some of the most turbulent economic waters in recent memory.

The rising costs of living, coupled with limited opportunities for well-paying jobs, have left many in this generation feeling financially squeezed. Yet, despite these challenges, a Bank of America study reveals a surprising future: Generation Z is set to become the wealthiest cohort in history.

A Generation Under Pressure

Today’s economic environment has placed a heavy burden on Generation Z. With sky-high rents and an ever-growing gap between wages and living costs, many young people are finding it difficult to even meet basic needs, let alone save for long-term goals. The struggle to break into the housing market is especially notable, with many Gen Zers unable to afford their own homes or even secure long-term rentals without financial assistance.

In fact, some reports describe Generation Z as “overeducated but underemployed.” Despite having higher levels of education than previous generations at their age, many young people are stuck in low-wage jobs that don’t reflect their qualifications or ambitions. This discrepancy has led to widespread frustration, with nearly a third of Gen Zers stating that they feel financially behind compared to their parents at the same stage in life.

The Wealthy Future Ahead

It’s hard to imagine this generation, so entrenched in financial struggles, will one day lead the world in wealth. But according to Bank of America’s projections, Generation Z is on track to accumulate more than $74 trillion by 2040. This incredible financial growth is due in large part to what’s being called the “Great Wealth Transfer“—the expected movement of assets from the older generations, particularly Baby Boomers, to their children and grandchildren.

According to NewsWeek, In just five years, Gen Z’s collective wealth is predicted to jump from $9 trillion in 2023 to $36 trillion in 2028. By 2040, this sum could more than double, surpassing $74 trillion, making Gen Z not just the wealthiest generation in history but also one of the most economically powerful.

The Great Wealth Transfer

One of the primary drivers behind this dramatic shift is the intergenerational transfer of wealth. As Baby Boomers begin to pass on their savings and assets to younger generations, Gen Z is poised to inherit a significant portion. A study from Cerulli Associates estimates that by 2045, around $84 trillion will be passed down across multiple generations. Of that amount, approximately 38% will flow into the hands of Generation Z.

This “Great Wealth Transfer” is a pivotal moment for the younger generation. It’s not just about receiving financial support from their elders—it’s a potential game changer for the global economy. With a sudden influx of wealth, Generation Z could reshape the markets, spending patterns, and even societal structures in ways that are difficult to predict.

Changing the Way We Spend

As they prepare to inherit vast fortunes, Generation Z’s spending habits are already evolving. Unlike older generations, they’re less likely to pursue traditional milestones like homeownership or starting a family at a young age. Instead, they tend to prioritize experiences, travel, and personal well-being. This shift in spending habits—coupled with their upcoming financial boon—means Gen Z will likely drive significant economic change in the coming decades.

Their newfound wealth could disrupt global consumer markets, as this generation’s buying power will be enormous. Unlike past generations, Gen Z may have different priorities when it comes to what they value and how they spend. Their preferences could lead to more emphasis on services, experiences, and digital consumption, rather than tangible assets like property.