"The Center on Wealth and Philanthropy at Boston College estimates that baby boomers and their offspring could inherit as much as $27 trillion over the next four decades, with the progeny of the wealthiest pocketing much of the windfall," The Wall Street Journal reports.
A sudden inheritance can be tough for some people, particularly those feared too young to be heirs. After all, a young person might not know what to do with an inheritance. But there are other generations that can encounter a sudden bequest with no prior inheritance experience too – baby boomers.
The baby boomer generation is set to receive unprecedented inheritances in the coming years. Do baby boomers and retirees know what to do with their inheritances? Not always, but there is time to learn.
The subject of inheritance in retirement was considered in a recent MarketWatch article titled “When retirees inherit; tips for newfound wealth.” The article provides some basic pointers to get you started.
For the most part, this issue is simply a case of social reversal. Historically, retirees and inheritors have historically held very separate roles. Retirees planned inheritances for their inheritors, but they were not themselves inheritors!
With age and population groups moving through time as they are today, baby boomers are about to receive the greatest generational wealth transfer in recent history. The essential nugget of wisdom to glean from the original article, however, is to force yourself to a calm moment and some further planning.
Retirees have less time to make the best of an inheritance. Nevertheless, many retirees are facing some very difficult financial decisions themselves. Long-term care and future health care costs are good for starters. Using the inheritance correctly and wisely is the key.
So, if you are only holding the inheritance for a short time yourself, what does that mean for your existing estate plans? This unprecedented wealth transfer has the potential to be a blessing or a curse. Are you ready?
Reference: MarketWatch (July 16, 2013) “When retirees inherit; tips for newfound wealth”