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.

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