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Inheriting Trillions

February 26, 2011 | Filed Under Finance, Investment | Comments Off

A study conducted by the Center for Retirement Research at Boston College in January of 2011, indicated that approximately $8.4 trillion will be inherited by baby boomers. Those to inherit the most will receive an average of $1.5 million, while the least wealthy will average about $27,000. That translates to roughly $64,000 per person.

The study also estimates that two-thirds of the baby boomer generation will receive some inheritance.

In addition to the $8.4 trillion, some baby boomer parent’s will transfer a portion of their wealth to their children while they are still living. That would estimably increase the total transfer of assets between generations to $11.6 trillion.

The writers of the study concluded their paper with this caveat:

“It is important to stress that most boomers have not yet received any inheritance. And the amount and timing of inheritance receipts is highly uncertain. Even parents who have a strong desire to leave a bequest may be forced to revise their plans based on fluctuations in the value of their assets. Or they may exhaust their wealth as a result of medical and, especially, long-term care costs. In short, an anticipated inheritance may not materialize. Even when inheritances do occur, recipients generally get the money when they are older and the amounts are typically not large enough to be life-changing. Therefore, boomer households need to make many of their key financial decisions before they ever receive any inheritance. And they should not count on an inheritance to eliminate the need for increased retirement saving.”1

[1] How Important Are Inheritances For Baby Boomers? By Alicia H. Munnell, Anthony Webb, Zhenya Karamcheva, and Andrew Eschtruth*© 2011, by Trustees of Boston College, Center for Retire­ment Research

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