Most Americans who became the recipients of a sudden cash windfall say they’d share the proceeds with loved ones and charities, as well as pay down their debts.
So says a new report from BMO Wealth Management, “A Sudden Windfall: A Blessing, Not a Burden,” which also finds that 47% of respondents said their most important financial goal was achieving lifestyle goals in retirement. After that came increasing wealth (44%) and protecting current wealth (42%).
The report points out that with more than $12 trillion in financial and nonfinancial assets moving from the so-called greatest generation to boomers, lots of people will be in for such a windfall—and that over the next 30–40 years, assets worth another $30 trillion will pass from boomers to their heirs.
Among respondents asked what they’d do if they received a windfall, 53% said they’d share with family, friends and charity; next came paying off debts (51%) and investing in the stock market, a business or property (49%).
In addition, 17% said they’d like to know how it might affect their retirement outlook and 14% expressed concern over knowing whom to trust among those who would want to offer them advice on what to do with the money.
Still, even with all that supposed extra money, just 36% of respondents said it was important to get advice on investing and retirement savings.
Other respondent concerns about estate and legacy in the event of a windfall were helping others (29%), how to create a legacy with the money (16%) and how to avoid family conflict over money (15%).
Faced with a financial bonanza, BMO suggested that people should consider seeking help from experts on managing the money; finding a place for the money that suits the recipient’s needs; making plans for it, including family, so that their intentions regarding funds disposition are known; understanding the tax implications that sudden extra money brings; and figuring out a legacy, then letting family know so that wishes are carried out.
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