The Kids Think You're Spending Their Inheritance. Are They Wrong?

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Senior couples toasting wine glasses at patio table
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You've all seen the bumper stickers -- maybe you even have one on your car -- "We're spending our kids' inheritance." But funny as the sticker is, and as much as you might share the sentiment on occasion, the truth is that most Americans of retirement age say they aren't doing anything of the sort.

That's the upshot of a new survey from Bankrate.com (RATE) subsidiary Interest.com, which recently polled Americans ages 18 to 59, asking whether they expect to receive an inheritance from their elders at some point in their lifetimes. And then they polled the folks bearing the bumper stickers... and came to a pretty startling conclusion:

Barely 1 in 4 Americans under the age of 60 have any hope of ever inheriting anything from anybody. But nearly 2 out of 3 Americans age 60 and over say that yes, indeed, they have been saving, and one of these days, their heirs are going to benefit.

What We Have Here Is a Failure to Communicate

A 2011 study conducted by the Boston College Center for Retirement Research estimated that U.S. retirees have built up an astounding $8.4 trillion dollars worth of inheritable wealth. Baby Boomers have benefited from giveaways to the tune of $2.4 trillion already, but this still leaves $6 trillion more waiting to be handed out.

So on one hand, according to Interest.com, 64 percent of the folks with the dough say they expect to have enough money left over at the end of their lives to bequeath it to their heirs. Yet on the other hand, 27 percent of Americans who might inherit that money don't think they'll ever see any of it.

Why not?

The bumper stickers may be one reason. When enough people start joking about planning to spend what they've got on themselves -- especially in an economy like this one, when that may be their only option -- you can hardly blame the kids for beginning to believe them.

Or perhaps the kids may not be expecting to receive an inheritance because they simply don't know there's any money to inherit.

Interest.com notes that "older parents may ... be reluctant to share their financial situation with children, not wanting to raise expectations."

The Best Intentions

But a third possibility also bears consideration: Maybe the kids are right.

According to the Centers for Disease Control, life expectancy in the U.S. has increased by 30 years over the past century -- lengthening the amount of time a retiree's nest egg must last to permit any inheritance to take place. The Social Security Administration estimates that a man who's 60 today will, on average, live to see his 81st birthday. A woman will likely live past 84.

A lot can happen over 20 years. It may well be that, as a whole, retirees have "$6 trillion" saved up. And maybe they really do intend to hand this money down to their heirs. Still, you have to figure that, just as in society at large, an awful lot of this money is concentrated in the hands of relatively few individuals -- "the retiree 1 percent," you might call them.

Meanwhile, as mentioned here on DailyFinance before, 60 percent of American workers ages 55 and older have saved less than $100,000 for retirement. Even with the help of Social Security and pensions, it's not going to be easy to stretch $100,000 over a 20-year retirement. Even if the remaining 40 percent of the population is a bit better off, it may prove simply, fiscally impossible for 60 percent of the population to make any significant bequests.

And as for the 64 percent who nonetheless insist that they plan to pass some wealth down to their heirs? A lot of them may be overly optimistic about their assets, or overly pessimistic about how long they'll live. Either way, it may end up being the thought that counts.

Motley Fool contributor Rich Smith has no position in any stocks mentioned.

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November 30 2013 at 2:25 PM Report abuse rate up rate down Reply
vlady1000

I doubt either of our 2 kids will ever have kids. If that stays true, I am sure we will restructure our will and leave the kids less. No too mention by the time we both die, they will probably be 65-70 years old and have better already have built their own financial plans by then.

September 30 2013 at 7:47 PM Report abuse rate up rate down Reply
goodlucktu

Half of the kids in this country are waiting for their parents to kick the bucket because thats all they give a dam about. These calculating little turds have not established themselves because they know whats going to be handed to them.... with interest...

September 28 2013 at 5:25 PM Report abuse +2 rate up rate down Reply
Darryl Ehlers

Hi Folks
Because my son thought that drugs and alcohol was better than being responsible for living a life and my Daughter with Bi-polar and felt she will not medicate. I left my farm to my Grand child and hired man of 15 years. The children of today feel like many Americans that entitlements are required. Take a breath Margret. They just threw their inhertance out the window.
I see many families that the children could care less, but when you die, they are the first to say where is my share. You have raised your children wrong, when you do not stay with ols school rules, which is Christain rules

Have a Good Day Pilgram Darryl Ehlers

September 28 2013 at 2:35 PM Report abuse +2 rate up rate down Reply
1 reply to Darryl Ehlers's comment
hattie54

I know its hard but once the grankids are adults,they can do what they want.When my Grandfather died in the 1960's,he left the farm to his greedy son and my Mother ( a schoolteacher ),my uncle wasn't interested in farming and my Grandfather knew that.He built homes on those 92 acres which all sold.

September 29 2013 at 6:58 PM Report abuse rate up rate down Reply
betty_brock

My children are doing fine. Why shouldn't I enjoy what I worked for? I will leave them a nice house which they can sell and what is left of my savings.

September 28 2013 at 10:57 AM Report abuse +2 rate up rate down Reply
hsstempe

In reading just about the most selfish bunch of adults in my 68 years of life i have one thing i am going to say.. Yeah , we earned it and it AINT up to the socialist sob's in this govt in my lifetime to deprive ME OR MY KIDS OF WHAT I EARNED. "ME" WILL DO DAMN WELL WHAT I PLEASE AND IF ITS TO LEAVE TO THE CHILDREN I BOUGHT INTO THIS WORLD, THE REST OF YOU ALL CAN STUFF IT IF YOU DON'T LIKE IT. TRAIN YOUR KIDS ABOUT FINANCES AND MAY BE GRANDKIDS WONT HAVE THE HUNDREDS OF THOUSANDS IN COLLEGE BORROWING COSTS TO PAY BACK OVER 15 YEARS. HOW ABOUT HELPING THE FAMILY YOU BROUGHT IN TO THE WORLD IF AT ALL POSSIBLE! WHILE YOU ARE AT IT, FIRE THE SOBS TAXING TO ZERO. FIRE THE SOBS WHO PAY LESS THAN 1 point on over a quarter million dollars. FIRE THE BANKERS AND MORTGAGE PEOPLE WHO STEAL AND GET AWAY WITH. RECALL AND IMPEACH THE SOBS IN THE GOVT WHO PRINT MIONEY WITH NO ASSETS TO BACK IT. More to say, not more time except if you didn't expect to help your children, why in hell have them. JERKS!

September 27 2013 at 7:36 PM Report abuse -3 rate up rate down Reply
1 reply to hsstempe's comment
betty_brock

By now, your "kids" are probably grown. Let them make their own way.

September 28 2013 at 10:57 AM Report abuse +3 rate up rate down Reply
rjsoares

Maybe some of us olders think that if the children believe that they will get an inheritance, that they well then feel bad every time we spend some of it on ourselves--or remarry--or give to charity. What they receive they should feel is trully a gift not a "right".

September 27 2013 at 12:41 PM Report abuse +4 rate up rate down Reply
martinru2

Why have kids if you can't even take care of yourself? --No kids, no problems. Keep your money, if that's what you think brings you hapiness.

September 27 2013 at 11:38 AM Report abuse rate up rate down Reply
Paul FIQUET

In these days and age kids should be glad that they had a loving home to grow up to adulthood and given an education. my generation living under constant wars and recessions has had to try to make the ends meet ,,less trying to save for the kids after our demise. they certainly should not think that they are DUE anything besides what they already have generously received from their parents. senior care may be what they might give to their parents as a thanks for their good upbringing.

September 27 2013 at 10:10 AM Report abuse +1 rate up rate down Reply
rkeeeballs

Retired 20 years early and my kids are watching me spend the fruits of MY LABOR.....Don't think there will be much left over and I am willing to move into their homes when I can no longer take care of myself.....yup ! Life is not a handout, hope they do better than I did but, not very likely :>)

September 27 2013 at 9:53 AM Report abuse -1 rate up rate down Reply
3 replies to rkeeeballs's comment