Leave it to the kids? Don't think so
A new survey says wealthy boomers are more inclined to spend their money than worry about their heirs.
This post comes from Lynn Mucken at MSN Money.
Even those self-indulgent baby boomers know they can't take it with them. At the same time, they are reluctant to just hand their kids a hard-earned fortune.
Only 49% of wealthy boomers say that leaving money to their children is a priority, according to a recent survey of 457 people nationwide with $3 million or more in investable assets. The study was conducted by U.S. Trust, a unit of Bank of America.
While previous generations expressed a "sacred responsibility" to their children, "research … uncovered a distinct generational mindset that reflects changing views about what retirement means and an evolving sense of what one generation owes the next," said Sallie Krawcheck, head of Bank of America's wealth management division. Post continues after video.
That reversal in parental thinking, according to the survey, is based on two major beliefs:
- The parents earned the money, paying a high price in the process, and deserve to spend it as they see fit.
- Their children can't be trusted with it.
Only 16% of the respondents said they inherited their fortune or married money, instead earning it through focus and hard work. As a result, they said, they haven't taken enough time off, were too busy to spend time with family, mishandled personal relationships, missed important milestones of family and friends, and have suffered declines in their health.
At the same time, only 36% of those surveyed expressed confidence that their children would be able to "handle" an inheritance. And 45% doubt their progeny will have sufficient financial maturity until they're at least 35 years old.
"We don't plan on giving our children any money when we die," "TiredOfFlippingTheBill" wrote to The Wall Street Journal. "We have a trust to distribute the money the way we want it spent. We are giving educations to children."
"AltBuilder" agreed: "My kids will get what's left if the lives they are leading are worth supporting. If not, it goes to a charity I have selected. I owe an education and a supportive environment -- not money -- to the next generation."
Instead, 64% of those surveyed said they want to use their wealth to travel and 36% plan to use it to "have fun." However, 36% said that making a positive impact on society and 13% said leaving a lasting legacy of contribution to society were important to them in the way they want to use their wealth.
Of course, these poll results are not the first time affluent boomers have expressed reservations about passing their money to the next generation.
In 2008, a study by Harrison Group and American Express Publishing described a group of 2.1 million Americans who had annual discretionary income between $125,000 and $249,000 -- income after taxes, mortgage and standard bills -- and an average net worth of $1.9 million.
"When rank-and-file millionaire boomers are pushed to decide between living a full retirement or scaling back post-career spending to preserve capital for their children or grandchildren, a fully funded lifestyle is typically the victor," said the study.
Boomers having few qualms about stiffing their children comes as no surprise, "Waywrd1" wrote the WSJ in response to this year's study: " …The irresponsible selfish parents raised irresponsible selfish children, and they are discovering it way too late in life. So, as typical selfish boomers, they're ripping the rug out from under them left and right. I work in financial services, and this is becoming more and more common."
More on MSN Money:
"At the same time, only 36% of those surveyed expressed confidence that their children would be able to "handle" an inheritance. And 45% doubt their progeny will have sufficient financial maturity until they're at least 35 years old." - You have no one to blame but yourselves. It is called being a parent. TEACH YOUR KIDS HOW TO BE RESPONSIBLE!!! I'm all for people enjoying their retirement and not living a lame retirement just to leave a few bucks but how pathetic.
By the way, this generation racked up more debt than my generation or my kids generation could ever pay off. So when you think about what you owe future generations, just look at the national debt you are leaving us compared to the debt you were left. I love my parents and they taught me well. But there are a ton of worthless people in their generation that were too busy having fun to be good parents and their generation is/was one of the most fiscally irresponsible ever to touch this planet.
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