Here’s a ray of sunshine amid all the bleak economic news of late: A study by the Center for Retirement Research at Boston College for the Metlife Mature Market Institute estimates Baby Boomers’ inheritance at $8.4 trillion at 2009 levels. The median per person figure is $64,000. To date, $2.4 trillion has been received.
The figures, drawn from national survey data, forecast the wealthiest Boomers will be given an average of $1.5 million, while those at the other end of the spectrum will be left $27,000, an amount that represents a larger percentage of the latter group’s overall wealth. Two-thirds of all Boomers stand to receive some inheritance over their lifetime.
Additionally, the study reports that the Boomers have or will receive a substantial sum from their parents while the older generation is still alive, increasing the total transfer of assets from $8.4 trillion to $11.6 trillion.
Of course, regardless of the anticipated amount, any prospective inheritance is uncertain. “Parents or grandparents who expect to leave a bequest may revise their plans based on fluctuations in their asset values,” says Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Wealth may be consumed by medical and long-term care costs, or simply by virtue of long life. In short, Boomer households should not count on an anticipated inheritance and forego the need for increased financial planning and retirement saving.”
Other key findings of the study include:
· Most Boomers will receive their inheritances in late middle age, upon the death of the surviving parent. To date, the overwhelming majority of inheritances are passed from parents to children (63% of inheritances and 74% of dollars); grandparents are the second most common source.
· Although only 17% of Boomers had received an inheritance by 2007, two-thirds will eventually receive one. The incidence of receipt increases with income, but 50% or more of households at all income levels will eventually receive an inheritance.
· Considering only past inheritances, the median amount Boomers received by 2007—adjusted for inflation—is about the same as that received by the preceding 1927-1945 birth cohort at the same ages.
Download The MetLife Study of Inheritance and Wealth Transfer to Baby Boomers here.