|Copyright:||Copyright Business Wire 2010|
|Source:||Business Wire, Inc.|
Total Intergenerational Transfer of Assets Estimated at
The study, authored by the
The figures, drawn from national survey data, say the wealthiest Boomers will be given an average of
Additionally, the study reports that the Boomer cohort has or will receive a substantial sum from their parents while the older generation is still alive, increasing the total transfer of assets from
Total household wealth for Americans of all ages amounted to
“It is also recommended,” said Ms. Munnell, “that the subject of inheritance among the Boomers be used to generate family discussions about estate planning. While not everyone will be comfortable engaging on this topic, those who do so will likely find it helpful. A trusted family financial advisor may be useful in this regard.”
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. Few Boomers now have living grandparents, but a majority have at least one living parent.
- 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.
- Though high-wealth households receive much larger inheritances in dollar terms, these amounts represent a smaller share of their wealth—22% for those in the top tenth compared to 64% for those in the second-to-bottom tenth.
- 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.
Data were analyzed from the Survey of Consumer Finances (SCF), a triennial survey that over samples wealthy households (latest data available 2007). SCF participants were asked about past receipts of inheritances and of inter-vivos gifts (those given during the donor’s lifetime). They were also asked whether they expect a substantial inheritance or transfer of assets in the future and the anticipated amount. But “substantial” and “expect” are left undefined and only 16% of households answered in the affirmative. For data on prospective inheritance receipts, the study relied on the 2006 Health and Retirement Study (HRS), a nationally representative panel of individuals born before 1954 and their spouses of any age. In 2006, individuals were asked to estimate the probability of receiving an inheritance in the next 10 years and the likely amount. The authors converted these 10-year forecasts into lifetime probabilities and assigned probabilities and amounts to SCF households born 1946–1964 to obtain a complete picture of past and prospective inheritance receipts for the Boomers.
“The MetLife Study of Inheritance and Wealth Transfer to Baby Boomers” may be downloaded from www.MatureMarketInstitute.com. It can also be ordered through Contact Us on the
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