Baby boomers's financial pressures put intended inheritances at risk
More than their own current financial position, Millionaires are concerned about their children and grandchildren’s financial futures, and a significant majority are planning to leave them their money, according to a survey conducted in February by Millionaire Corner.
Seventy percent of individuals with a net worth between $1 million and $5 million said they plan to leave money to their children. The percentage is even higher among those with a net worth exceeding $5 million (74 percent). Spouses remain the primary intended beneficiaries with nearly eight-in-10 of Millionaires saying they will leave their money to them.
With great wealth comes responsibility, and there are several high profile examples of Americas wealthiest, among them Warren Buffet and Bill Gates who have publicly stated that they are not leaving their vast fortunes to their children. In response, Peter Buffet, Warren’s second oldest son, said in an interview, that his father transferred his values to him rather than his wealth.
Millionaires do not place a high premium on an inheritance as a contributing factor to their financial success. It ranks far below hard work, education, savvy investing and frugality, according to our ongoing research.
Across age levels, a greater percentage of respondents over the age of 60 (76 percent) said they intend to leave their money to their children. The youngest boomers ages 41-50 were the least likely (53 percent) to say they would name their children as beneficiaries.
This could be a reflection of how the economic collapse put boomers’ retirement savings in peril. A 2012 Ameriprise Financial survey found that more than half were helping to pay for their parents’ daily expenses, while 93 percent said they were financially supporting their adult children as well. As a result, only 16 percent said they would be able to preserve their wealth to leave for their children.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.