Sep 07

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Baby Boomers Not Planning to Leave Much Behind

According to a recent survey of millionaire baby boomers by investment firm US Trust, many are making a surprising decision regarding their financial planning.  Rather than planning to leave behind a sizeable estate, they intend to substantially exhaust their funds prior to death.  Less than half of those surveyed said leaving money to their children was an important goal.  They cite a variety of motivations, which include:

  • A desire to enjoy their remaining years to the fullest after a life of sacrifice on behalf of their children
  • The concern that a windfall of cash will keep their children from appreciating its value
  • The concern that their children will not work hard to achieve on their own if they know an inheritance is forthcoming
  • The fear that they will run out of money for their own needs
  • The preference to give money while they are alive

Baby boomers range in age from 47 to 65 and represent 77 million Americans.  A frequently raised concern is that a mass selloff by this part of the population could have a severe dampening effect on the stock market.  A report by the Federal Reserve Bank of San Francisco has predicted a 13% fall over the next decade as baby boomers reduce their stock holdings in favor of a more conservative retirement friendly investment portfolio.  The increased spending timeline described in the US Trust survey would likely exacerbate this impact.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2011/09/baby-boomers-not-planning-to-leave-much-behind/


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