Receiving a financial windfall can be life changing. Whether it’s paying off a huge debt all at once, securing your retirement, buying a home, or taking your dream vacation, coming into a significant lump sum of money can have positive financial implications.
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You might be hoping to give and/or receive an inheritance during your lifetime, but only a fraction of Americans do so. So, just how many Americans are slated to leave an inheritance, and how many plan to rely on it? The data shows how generational outlooks and expectations differ when it comes to inheritance.
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Not All Americans Leave an Inheritance, but Many Are Banking on One
Northwestern Mutual’s 2024 Planning & Progress study, which polled 4,588 U.S. adults aged 18 or older, highlighted that the $90 trillion “Great Wealth Transfer” is fast approaching. While younger generations like Gen Z and Millennials expect an inheritance (38% and 32% respectively), the reality is that only 26% of Americans leave behind an inheritance and serious financial planning is necessary to do so.
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“In the coming years, we will see a staggering $90 trillion generational transfer of wealth, but who will see it depends a great deal on people’s financial planning,” said Kamilah Williams-Kemp, chief product officer at Northwestern Mutual in a recent Northwestern Mutual press release.
Among the 26% expecting to leave an inheritance, 68% say it is “very important” or their “single most important financial goal.” Passing on your wealth can improve the lives of your next of kin for generations to come.
“Leaving an inheritance is an important goal that extends far beyond dollars and cents,” said Williams-Kemp. “It’s about providing stability, opportunities and a foundation for future generations to build upon. That’s why it’s essential to plan and communicate with family and loved ones to ensure your legacy is protected.”
When posed with the question “How critical to your long-term financial security or retirement is the inheritance that you’re expecting?,” here’s how each generation responded:
Critical (Net of highly critical and critical)
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All respondents: 50%
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Gen Z: 54%
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Millennials: 59%
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Gen X: 46%
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Boomers+: 30%
Highly critical: “Without receiving an inheritance, I won’t achieve long-term financial security or be able to retire comfortably.”
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All respondents: 17%
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Gen Z: 13%
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Millennials: 26%
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Gen X: 13%
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Boomers+: 9%
Critical: “Without receiving an inheritance, I may not achieve long-term financial security or be able to retire comfortably.”
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All respondents: 33%
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Gen Z: 41%
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Millennials: 33%
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Gen X: 33%
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Boomers+: 21%
Not Critical (Net of “I will achieve financial security” and “I will never achieve financial security”)
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All respondents: 50%
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Gen Z: 46%
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Millennials: 41%
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Gen X: 54%
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Boomers+: 70%
Will: “I’ll achieve long-term financial security and retire comfortably with or without receiving an inheritance.”
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All respondents: 43%
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Gen Z: 41%
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Millennials: 35%
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Gen X: 48%
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Boomers+: 54%
Will never: “I’ll never achieve long-term financial security or retire comfortably with or without receiving an inheritance.”
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All respondents: 7%
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Gen Z: 5%
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Millennials: 5%
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Gen X: 5%
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Boomers+: 16%
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This article originally appeared on GOBankingRates.com: Half of Americans Say an Inheritance Is Critical to Their Financial Success — See Where Your Generation Stands
