Despite forecasts of inheritance windfalls for Boomers, a new AARP study
shows that, as of 2004, an overwhelming majority (80.8 percent) of those born
between 1946 and 1964 had yet to receive an inheritance.
The AARP study also found that only a small percentage of Boomers – 14.9
percent – said they expected to receive an inheritance in the future, suggesting
that for most, inheritances will not represent a boon for their retirement
security.
Furthermore, for the fortunate Boomers who had received inheritances by 2004,
the median amount received was only $49,000 (adjusted to 2005 dollars).
« Many of us dream of an inheritance in the same way we think about winning
the lottery, » said John Gist, Associate Director of AARP’s Public Policy
Institute (PPI). « The harsh reality is that for all but the lucky few, an
inheritance is a pipedream.
« This sobering report makes it clear that in the absence of such a windfall,
Boomers need to look toward Social Security — combined with savings and, in
some cases, pensions – as the true keystones for peace of mind in their
retirement years, » Gist added.
AARP’s study – titled « In Their Dreams: What Will Boomers Inherit » – is a
follow-up to an earlier study, and is based on an examination of the Federal
Reserve’s 2004 Survey of Consumer Finances. The Federal Reserve information
derives primarily from interviews with more than 4,500 families that are
conducted every three years. AARP has broken down the findings under three
groupings: Boomers, pre-Boomers (born before 1946) and post-Boomers (born after
1964).
The latest AARP research findings come amidst continuing projections by some
of huge dollar transfers through inheritances to Boomers and the other cohorts.
Some estimates have been as high as $41 trillion. A projection of $7 trillion
for Boomers alone has not been uncommon.
However, AARP has found that the value of inheritances held by Boomers thus
far has totaled only $2.l trillion in 2005 dollars.
Some of the other highlights of the report include:
- In contrast with the median inheritance of $49,000 for Boomers,
pre-Boomers had median inheritances of $70,000 and post-Boomers, $24,000. - Boomer families in the bottom 40 percent of net worth will inherit just
under 20 percent of inheritance dollars, while Boomer families in the top 40
percent will receive over 60 percent of all inheritance dollars. - For those nearing retirement, a large inheritance might play a role in the
timing of their retirement, but only the most affluent are likely to receive
such inheritances. Concluded the study: « In general, inheritances are not
likely to rescue most Boomers if they have failed to prepare for retirement on
their own. »
AARP is a nonprofit, nonpartisan membership organization that helps people
50+ have independence, choice and control in ways that are beneficial and
affordable to them and society as a whole. We produce AARP The Magazine,
published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud,
our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly
newsletter for 50+ educators; and our website,
AARP.org. AARP Foundation is an affiliated charity that provides security,
protection, and empowerment to older persons in need with support from thousands
of volunteers, donors, and sponsors. We have staffed offices in all 50 states,
the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
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