Boomers expected to inherit $8.4 trillion

PJ staff report

Baby Boomers, or Americans born from 1946 through 1964, will inherit $8.4 trillion at 2009 levels, a new study says.

With $2.4 trillion already received, the median per person for the total inheritance will be $64,000, says The MetLife Study of Inheritance and Wealth Transfer to Baby Boomers, prepared by the Center or Retirement Research at Boston College for the MetLife Mature Market Institute.

The study, drawn from national survey data, says the wealthiest Boomers will be given $1.5 million on average, while those at the low-end of the spectrum will be left $27,000.

Two-thirds of all Boomers likely will receive some inheritance over their lifetime, the study says.

Boomers already have or will receive a substantial sum from their parents while the older generation still is alive, increasing the total transfer of assets to $11.6 trillion, the study says.

That represents a big chunk of all Americans’ overall household wealth, which totaled $65.9 trillion in 2007, adjusted to 2009 levels.

Most Boomers will receive their inheritances late in middle age, on the death of the surviving parent, the study says.

Sixty-three percent of inheritances and 74 percent of dollars are passed from parents to children, with grandparents representing the second-most-common source.

Few Boomers still have living grandparents, while a majority have at least one living parent.

While only 17 percent of Boomers had received an inheritance by 2007, two-thirds eventually will receive one, the study says.

The incidence of receipt of an inheritance increases with income, although at least half of households at all income levels eventually will receive an inheritance.

While high-wealth households receive much larger inheritances in dollar terms, those amounts represent a small share of their wealth.

Inheritances represent 22 percent of wealth for the wealthiest 10 percent of households, compared to 64 percent for those in the second-to-bottom tenth.

In terms only of past inheritances, the study says, the media amount Boomers received by 2007, adjusted for inflation, is roughly the same received by the generation born from 1927 to 1945.

“Regardless of the anticipated amount, any prospective inheritance is uncertain,” Sandra Timmermann, director of the MetLife Mature Market Institute, says in a statement.

“Parents or grandparents who leave a bequest may revise their plans based on fluctuations in their asset values,” she says. “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.”

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