Boomers to inherit more than $11 trillion

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

And Alicia H. Munnell, a co-author of the study and director of the Center for Retirement Research at Boston College, warns policymakers that these projected inheritances are not a “silver bullet” to retirement security.

“[Policymakers] should be developing policies and programs to boost Americans’ savings and promote longer work lives,” she says.

She also recommends families have discussions about inheritance and estate planning. She says, “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.”

Here are some key findings from the study:

• Sixty-three percent of inheritances and 74 percent of dollars are from parents to children, and the grandparents are the second most common source. Most boomers will receive their inheritance in late middle age.
• Although only 17 percent of boomers had received an inheritance by 2007, two-thirds will eventually receive one.
• High-wealth households receive much larger inheritances in dollar terms, but these amounts represent only 22 percent of their wealth, compared to 64 percent for those in the second-to-bottom tenth.
• The adjusted-for-inflation median amount boomers received by 2007 is about the same as the amount received by the preceding 1927-1945 birth group at the same ages.