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.