Blog and Podcast

Why You Should Not Make Inheritance Part of Your Financial Plan

July 24, 2019

Depending on the sources, millennials are in line to inherit $30 to $60 trillion in wealth from older generations over the next two decades--that is, unless the older generations do not spend it all. In reality, only 40% of Baby Boomers say they plan to leave behind inheritance to their heirs. 


After a lifetime of providing for others--funding education, buying first cars, helping to buy first homes, paying for weddings--Boomers now spend $40 billion on consumer goods and a whopping $120 billion on leisure travel each year. They are three times as likely as Gen Xers to spend $10,000 on landscaping or interior decor. Due to advances in medical technology, they will live longer and thus will incur more health care expenses than previous generations. The average cost of healthcare for married retirees from age 65 to death is now estimated to cost $386,000. 


There is also a different mindset among Boomers than the generation that came before them, dubbed the “Silent Generation,” which was highly affected by the Great Depression. They saw how people died and suffered when the economy dropped through the floor. For them, passing on money was a matter of life or death. Boomers grew up during an age of growing affluence, which shaped their world view and spending habits accordingly.


Because of these factors, younger generations should not expect to inherit wealth to make up for gaps in their finances. Instead, they should focus on building a robust personal financial plan that prioritizes their financial goals and adequately funds them, such as paying off student loans, owning a home, paying for a wedding, and/or setting up educational funds for their children. When individuals learn how to build wealth without the expectation of receiving any from their parents and grandparents, they will be on the path to financial stability. Any actual inherited wealth can subsequently be viewed as a windfall to invest or save.

For more information on financial planning, please contact us at 515-557-1860 or email us at invest@taberasset.com. TABER Asset Management is a fiduciary, investment management and financial planning firm serving clients from across the U.S. 

Back to Blog