Baby Boomer Inheritances: How Much and When They are Expected
Category: Financial and taxes in retirement
The inadequate consolation of losing our parents is that our loss is usually associated with the prospect of receiving an inheritance. As baby boomers age and their parents start to reach old age, the inevitability of that happening grows ever more imminent. In 2007, 58% of baby boomers had at least 1 living parent.
The Center for Retirement Research of Boston College completed an intriguing research project not too long ago – “How Important Are Inheritances for Baby Boomers“. In the study a panel of subjects born before 1954 were asked about the probability of and how much they might expect for an inheritance in the next 10 years. The results of the survey indicate that about two-thirds of baby boomers expect to receive an inheritance of some amount. Obviously, the wealthiest people expect to receive more of an inheritance than do those less well-off. The median (middle of the distribution) amount of inheritance expected was $63,000, whereas the mean (average) amount was $292,000. What that means is the wealthiest people are pulling up the average – they will tend to get a lot more. In all, boomers can expect to receive about $8 trillion in inheritances over their lifetimes.
The study points out that most baby boomers have yet to receive any inheritance. Moreover the amount to be received and the timing thereof are both uncertain. The financial downturn might have some effects on amount, as does the longevity of their parents, who might have to consume more of their savings as they age. The study urges people not to count on an inheritance to bail them out of poor retirement planning decisions.
What do you think?
Are you planning on receiving an inheritance that might help you live a comfortable retirement? Have you revised your expectations? Use the Comments section below.
Comments on "Baby Boomer Inheritances: How Much and When They are Expected"
rich says:
both my aunt and mom had accumulated assets of 1.3 million dollars. then my aunt went into a nursing home and passed away two years later at the age of 93. Then my mom fell, broke bones and went into a nursing home and passed away four years later at the age of 92.
Amount of money left over: zilch.
This goes to show the importance of pre-planning. So dear readers of TopRetirements spend time with your parents and really force the issue of estate and end of life planning.
LuluM says:
I am a baby boomer. My father always used to say, "I spent the children's inheritance". Fine with me as long as I don't have to take care of them (financially)!
Marcy says:
It would be a mistake to count on any inheritance from parents. It will be easy for them to go right through whatever they saved if they need help in their later years.
What I got from my parents was not the fish but the lessons on how to fish.....I learned only to buy what I could afford and not to go in debt. I learned to save and live frugally under my income. Now I can retire happily with the funds to do so. I am thankful that they set a good example. I don't know what they have saved, but it would be nice to get a pleasant surprise when they are gone. I hope it is a long way off. I can honestly say I don't need it. I can find a way to enjoy it if They have "leftovers".