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Sunday, August 14, 2011

Inheritance and Wealth Transfer to Baby Boomers


Another excellent report from MetLife on a subject that is of considerable interest to many older people. How much will I inherit – how much will my descendants inherit.

The top line conclusion was that Boomers will inherit $8.4 trillion. Of this amount, $2.4 trillion has already been received, while the remaining $6.0 trillion is anticipated and, therefore, subject to significant uncertainty.

Perhaps if all of the US Boomers donate their inheritance it will make a sizeable hole in the US budget deficit. Perhaps not.

The median inheritance is $64,000 but just look at the distribution. Lots of people will receive mum and dad’s $1000 savings and a very few will be getting zillions. All the more reason to stop talking about this group as a single generation with common characteristics.

I was very interested to read what MetLife thought that Boomers would be leaving as an inheritance for their heirs.

I quote.
Estimating how these offsetting factors will affect Boomer bequest behavior is difficult given the 20- to 50-year remaining life expectancy of the Boomer cohort. In addition, considering that a large number of Boomers have not yet received inheritances themselves, we conclude that their current bequest intentions may provide little information about their future bequest decisions.
Very diplomatic for saying we have no idea. At least they are honest. Dick Stroud

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