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In Their Dreams: What Will Boomers Inherit?

Inheritances are not just the stuff of dreams, but have potentially important personal planning and public policy implications. This AARP Public Policy Institute Data Digest examines the occurrence and expectation of inheritances by the baby boomer cohort, as well as by pre-boomers (born before 1946) and post-boomers (born after 1964).

The study finds that about one-fifth of boomer households have received inheritances, and about 15 percent still expect to receive one. Among all boomer families who received at least one inheritance by 2004, the median value was $64,000 (in 2005 dollars), assuming a 3 percent rate of return on the inherited assets. Those with more wealth receive larger inheritances. For those nearing retirement, a large inheritance might be a factor in the timing of their retirement, but only the most affluent are likely to receive such sums.

In general, inheritances are unlikely to...

  • have much impact on boomer retirement security
  • make a significant contribution to most boomers' retirement savings
  • rescue most boomers if they have failed to prepare for retirement on their own
  • have much of an effect on labor supply

Thus, despite wishful thinking and optimistic projections, inheritances are not likely to bail out the boomers. (10 pages)

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