Many young people today are expecting to collect inheritances one day, even though such nest eggs no longer exist, having been wiped out during Great Recession, a new TD Ameritrade survey finds.
About 40 percent of Americans aged 13 to 22 years expect to receive an inheritance and add they don’t believe that they will have to save for retirement, the study found. However, only 16 percent of parents said they expect to leave behind an inheritance to their children.
“There is a little bit of the halo effect of youth vs. the reality of what the situation will be like,” Carrie Braxdale, managing director of investor services at TD Ameritrade, told USA Today.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
Rising healthcare costs, volatile markets and a weak economy have eaten away at the inheritances that many younger people feel they’ll collect one day, the study added.
Among adults with at least $100,000 in investable assets, 58 percent said leaving an inheritance is not a primary concern, according to a PNC survey, while only 42 percent said saving for retirement is their primary financial goal.
Only 2 percent said passing on an inheritance was a primary financial goal, USA Today added.
Young people aren’t the only ones who should brace for nothing when their parents pass on.
Parents of baby boomers are growing increasingly unwilling to leave behind an inheritance for their children, opting instead to save money for healthcare costs or to enjoy themselves in old age, a recent Allianz study found.
Only 14 percent of baby boomers’ parents believe they owe their children an inheritance, Allianz found, according to Money Magazine. In 2005, 22 percent of parents felt this way.
“Culturally, the idea of a legacy has disappeared for all but the very wealthy,” said Hendrik Hartog, author of “Someday All This Will Be Yours,” Money reports.
More than half of parents hope to leave at least $100,000 behind, although expenses and market returns may cut into inheritance plans.
“An inheritance is like Social Security,” says Manhattan planner Kathy Boyle, the magazine adds.
“It’s been underfunded, so don’t count on it.”
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
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