Jean Chatzky on Boomers' Incredible Shrinking Inheritances

Jean ChatzkyIt's an awkward question, but one that baby boomers are increasingly finding themselves compelled to ask: What is the state of my parents' finances?

The data do not look encouraging. According to a survey done by Merrill Lynch (MER), in 2009 54% of investors with $250,000 or more of investable assets said that leaving an inheritance was a high priority; today, that figure is down to 41%.

Today show financial editor Jean Chatzky went on the air to explain that decline, citing the drain on families' finances caused by the Great Recession, as well as increasing lifespans. "People are living so much longer," Chatzky explains, "that they're worried they won't have enough money for themselves, let alone their kids."

Indeed, the average 65-year-old man can expect to live to 78, while the average 65-year-old woman can expect to reach 85. "You better plan on living a lot longer than that," Chatzky cautions, "because that's just the average, and you could easily, easily outdo that."

"People are living so much longer that they're worried they won't have enough money for themselves, let alone their kids." As The Wall Street Journal recently reported, the inheritance pool for baby boomers has fallen by 13%, potentially jeopardizing the finances of those who had assumed that they would benefit from their parents' estates.

Watch the video below for Chatzky's advice on how to safely navigate these difficult issues, including concrete steps like reverse mortgages and long-term care insurance, as well as more general measures like intergenerational communication.

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Alena Willim

A Reverse Mortgage enables seniors to convert part of their home equity into tax-free income without having to sell, give up title, move out or make monthly payments.

July 12 2013 at 3:04 PM Report abuse rate up rate down Reply
Harry Piels

Bernanke bailed out several US companies in '08. Now it's time to print enough money to cover (with interest) what Congress owes to the social security fund. That theft has caused shortfalls that already hurt younger boomers. Oh, right, they only had sixty years to plan for them.

June 17 2012 at 8:53 PM Report abuse rate up rate down Reply

Yeph.... Karl-Marx Obama has your back....... give it up for the hoax & blame.....

June 17 2012 at 9:39 AM Report abuse +1 rate up rate down Reply

You know that inheritance you think you're getting? (Infographic)

For some children not only will there be no inheritance but they may actually end up supporting their parents if and when the parents go through all of their savings.

Not only will this come as a great surprise to many but in a struggling economy with 0% interest rates available for retirees and savers, this situation may become more of the rule than the exception!

Read the story at The Political Commentator here:

Mike Haltman
New York, USA

June 16 2012 at 4:43 PM Report abuse rate up rate down Reply

This woman has a B.A. in English, and sells herself as a "motivational speaker"? This is what passes for financial news on HuffPuff and DailyFinance? LOL!

June 16 2012 at 3:44 AM Report abuse +1 rate up rate down Reply
1 reply to ha6ai's comment

She got a doctorate in thighs from what I see.

June 16 2012 at 12:41 PM Report abuse +1 rate up rate down Reply

Oh, but for the "New Normal"! Thats "Hope & Change", for you!!!

June 15 2012 at 6:20 PM Report abuse +2 rate up rate down Reply

My sister, and her pastor/ husband convinced my already paranoid, mother that the government would confiscate all her possesions if she needed nursing care. My mother then signed a power of attorney for my sister to help with my dad's funeral arrangements and within 4 months my sister had legal possession of all my mothers assets.
She wasn't going to let her mother squander the enheiritence that could be hers............By the time it wound through the courts and attorney's fees, mom got back about $25,000 of her $350,000 estate value.....Protect your parents with a plan using an attorney estate planner.........NEVER TRUST FAMILY TO DO THE RIGHT THING

June 15 2012 at 4:23 PM Report abuse +1 rate up rate down Reply

I tell my kids not to plan on a bailout from me. I earned all of what I have, hard work will always give them the opportunity to do the same.

June 15 2012 at 4:21 PM Report abuse +1 rate up rate down Reply

Although this does not affect the overall premise of the article, the author should review the gender gap statistics. While the gap may be accurate for the average from birth year because more males die young (more accidents/occupational death/homicide (particularly minorities)/war/etc.) at 65 the gender gap is about two years, not seven. The longer you live, the longer you can expect to live, particulalry for men over 50. Both genders should plan to live to 90 these days, or likely may be caught short.

June 15 2012 at 2:02 PM Report abuse rate up rate down Reply

What's up with children expecting an inheritance from their parents? These are tough times and people need every cent they can get. Why should any child's parents do without so the children can enjoy what they leave? There are exceptions such as children with health issues and the like. In the main it's your parents' money to do with as they please. Earn your own money and put something aside for a rainy day.

June 15 2012 at 1:17 PM Report abuse +3 rate up rate down Reply
1 reply to linmarco's comment

But, if a parent has been telling his children that he will leave a sizable amount of money to them, particularly if they have said that the inheritance should pay for the college expenses of grandchildren, then it is a shock when the inheritance is substantially less.

And now, it's often the case that the "Greatest Generation" are outliving their retirement nest egg, requiring support from their Baby Boomer children. That just makes retirement for the Baby Boomers that much bleaker (working longer and spending more on health care and nursing home or assisted living).

As for "counting on inheritance", what if the family owns a business? You expect the parents to leave their ownership interest to children or other relatives. It's the same with a family farm. You expect the children to inherit the farm, rather than the parents selling the farm to pay for their retirement.

June 15 2012 at 4:12 PM Report abuse rate up rate down Reply