Inheritance is Unreliable

Posted by: Sophie H. | Jan 06,2008


Wow, what a startling article Boomer Gene linked to today.  It’s a pretty stark view of retirement.  I knew the incoming retirees are not as well-prepared as they should be for retirement, but $10,000 or less for 25 million people.  I didn’t know the numbers were just that bleak.  

There’s another issue in that article that Gene didn’t address: the issue of inheritance.  Boomers may be expecting an inheritance to pad their retirement portfolios.  But today’s older generation is not faring much better than Boomers.  In fact, they’re worse of and debt for pre-Boomer retirees is climbing.  That debt is going to absorb a fairly sizable chunk of any inheritance.    

This trickles down a bit further as well because if you’re a child of a Boomer expecting an inheritance from your mother and father, it’s possible that he or she falls in the category of that 25 million.  What you might have thought was a bit of financial help might turn out to be the opposite: you’re going to have to provide financial support to your parents who didn’t save adequately for retirement.  If this sounds like a worst-case-scenario it just may be where $10,000 in savings and limited equity will lead.  

I don’t want to sound like an alarmist but…actually I do want to sound like an alarmist.  If you’re one of the 25 million who don’t have adequate retirement savings, you could be looking at a retirement disaster.  Remember, people don’t live in a vacuum so even if you had no new expenses, those savings are going to dry up within a year.  If you face a medical emergency, or other emergency, your going to go into debt and possibly face a bankruptcy, well past the age when this should be an issue.  

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