Boomers Play Down Inheritance Role

March 27, 2006 ( - A new survey has found that comparatively few Baby Boomers face their retirement years with confidence, despite their expectation of inheriting assets from their parents.

A news release said that the poll by Guideline, a business research consultant, found that fewer than a quarter of Boomers aged 40 to 60 years old said they were extremely or very confident about their retirement years. The survey divided respondents into First Wave Boomers (FWB) ages 50-60 and Second Wave Boomers (SWB) ages 40-49.

Apparently key to their unease was their fear of declining health in their later years and whether they will be able to pay for the necessary health care. There is an underlying concern that a total re-evaluation of retirement plans would be necessary if health deteriorated. Despite this concern only 18% of FWBs had long-term care and only 24% expect to get long-term care in the near future. SWBs responded similarly, the announcement said.

When specifically asking about their current or future inheritance, Boomers said they expect only 10% to 11% of their monies for retirement to come from their inheritance. In addition, among the 64% of Boomers who responded to the question about the amount of inheritance they anticipated, the median inheritance is approximately $100,000.

When asked how they expected to use their inheritance, they volunteered:

  • being debt-free,
  • paying children’s education,
  • vacations, and
  • growing the remaining funds through investments.

Related to funding retirement, FWBs expected to need approximately $375,000 (median value) in savings aside from Social Security and employer-sponsored pension plans to meet their retirement goals. SWBs said they will need significantly more ($750,000) in their personal savings.

Asked where their retirement monies will originate, FWB’s expect 32% to come from personal or 401(k) type savings plans, 22% from Social Security and 14% to be derived from part- or full-time work (vs. SWBs expecting 38% from personal or 401(k)s, 18% from Social Security and 11% from part- or full-time work). The remaining monies were attributed to inheritances, future sale of a home or other income.

Additional findings include:

  • 85% of FWBs planned to work, while only 74% of SWBs had such plans.
  • When asked why they planned to work, 33% of FWBs said because they enjoy it, while 34% said they needed to in order to make ends meet (versus 29% and 29% for SWBs, respectively).
  • 18% of SWBs said they will not work because they plan to enjoy a comfortable lifestyle during retirement (versus only 8% for FWBs).

Surprisingly, only 1% for both FWBs and SWBs said they will not work because they expect an inheritance.

Guideline’s consumer study surveyed 500 consumers born from 1946 through 1964, who have either received an inheritance or expect to in the future. All respondents had primary or shared responsibility in financial decisions, are not currently retired from their primary job and are not full-time students.

For additional information contact Peter Hooper ( ) or Fran Nuzzi ( ).