It’s perhaps why more than half of Gen Zers and nearly 60% of millennials reported that they’re depending on their inheritance to achieve financial security and retire in comfort.
However, those sizing up their parents’ (or grandparents’) property and envisioning a relaxed retirement are in for a huge shock: Little over 20% of baby boomers expect to leave an inheritance.
It’s not that the generation has forgotten about their young loved ones. In fact, 60% do have a will in place—but their children and grandchildren are more likely to find funeral instruction in it than cash or the deed to their family home.
That’s because over half of the boomers surveyed are explicitly planning not to leave an inheritance behind. What’s more, only 11% of boomers said leaving something for the kids is their top financial goal.
Some told Fortune that instead of leaving large lump sums behind for the next generation, they’re treating their loved ones to the likes of holidays while they’re still around to witness the joy their money can bring.
Others admitted they’re using their hard-earned cash to enjoy life to the fullest, including trips to Mexico and the music festival Glastonbury—rather than take it to the grave after decades of working hard.
“It’s such a shame to see people dying with so much money in a job they’ve worked in that they don’t enjoy, or with people they don’t like,” personal finance coach James Beckett said. “They go on auto-pilot accumulating wealth and not thinking about what it’s for.”
Plus, as Northwestern Mutual’s report highlights, the cost of growing old is only going up. In 2020, respondents said they needed $951,000 to retire comfortably—but that figure has surged to $1.46 million, far outpacing inflation.
While many boomers don’t expect to pass anything onto the next generation, nearly half have plans to address their future health care costs in retirement.
So, really, much of the Great Wealth Transfer will probably wind up going to hospitals and care homes.
Although the majority of Gen Z and millennials probably won’t benefit from the Great Wealth Transfer, a sizable chunk of the generation is already dipping into their inheritance while their parents are still around anyway.
What’s more, financially supporting your adult children doesn’t stop at helping them get on the property ladder.
