Estate Expectations: A considerable gap exists
between what Gen Z and Millennials expect in the way of an
inheritance and what their parents are actually planning to
do
Banking on a Benefactor: Half of Americans
expecting an inheritance consider it "critical" or "highly
critical" to their financial security
Transfer Troubles: 6 in 10 American parents
say their children do not value financial responsibility the same
as they do
Probate Problems: 40% of Boomers+ and 65% of
Gen X'ers do not have a will
Inheriting Insights: 3 in 4 Americans feel
comfortable including their teen or young adult child in annual
advisor meeting
MILWAUKEE, Aug. 6, 2024
/PRNewswire/ -- As younger generations anticipate the
$90 trillion "Great Wealth Transfer"
predicted by financial experts, a minority of Americans may
actually receive a financial gift from their family members. Just
26% of Americans expect to leave behind an inheritance, according
to the latest findings from Northwestern Mutual's 2024 Planning
& Progress Study.
|
Do you expect to
leave an inheritance (or give a gift / donation to a charitable
organization?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
Yes
|
26 %
|
36 %
|
28 %
|
22 %
|
22 %
|
|
No
|
50 %
|
36 %
|
47 %
|
56 %
|
55 %
|
|
Not sure
|
24 %
|
27 %
|
25 %
|
22 %
|
23 %
|
The study finds a considerable gap exists between what Gen Z and
Millennials expect in the way of an inheritance and what their
parents are actually planning to do.
One-third (32%) of Millennials expect to receive an inheritance
(not counting the 3% who say they already have). But only 22% each
of Gen X and Boomers+ say they plan to leave a financial gift
behind.
For Gen Z, the gap is even wider – nearly four in ten (38%)
expect to receive an inheritance (not counting the 6% who say they
already have). But only 22% of Gen X and 28% of Millennials say
they plan to leave a financial gift behind.
Based on plans alone, the generation that may see a larger
wealth inheritance is Generation Alpha, given that more than a
third (36%) of Gen Z say they plan to leave a financial gift
behind.
|
Do you expect to
receive money / assets as part of an inheritance(s)?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
Yes
|
25 %
|
38 %
|
32 %
|
28 %
|
11 %
|
|
I already have and
don't expect any more
|
10 %
|
6 %
|
3 %
|
8 %
|
22 %
|
|
No
|
53 %
|
38 %
|
49 %
|
54 %
|
62 %
|
|
Not sure
|
12 %
|
18 %
|
17 %
|
10 %
|
5 %
|
Among those expecting to receive an inheritance, half (50%)
consider it "highly critical" or "critical" to their
long-term financial security. For Millennials it's even more –
59%.
|
How critical to your
long-term financial security or retirement is the inheritance that
you're expecting?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
CRITICAL
(NET)
|
50 %
|
54 %
|
59 %
|
46 %
|
30 %
|
|
Highly critical.
Without receiving an inheritance, I won't achieve long-term
financial security or be able to retire comfortably.
|
17 %
|
13 %
|
26 %
|
14 %
|
9 %
|
|
Critical. Without
receiving an inheritance, I may not achieve long-term financial
security or be able to retire comfortably.
|
33 %
|
41 %
|
33 %
|
33 %
|
21 %
|
|
NOT CRITICAL
(NET)
|
50 %
|
46 %
|
41 %
|
54 %
|
70 %
|
|
Not critical. I'll
achieve long-term financial security and retire comfortably with or
without receiving an inheritance.
|
43 %
|
41 %
|
35 %
|
48 %
|
54 %
|
|
Not critical. I'll
never achieve long-term financial security or retire comfortably
with or without receiving an inheritance.
|
7 %
|
5 %
|
5 %
|
5 %
|
16 %
|
However, Gen Z has the greatest expectations for the impact of
an inheritance on their retirement strategy. This generation
expects the gift would cover 10% of their retirement funds.
|
Among the following,
what percentage of your overall retirement funding do you expect
each to deliver?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
401K or other
retirement account
|
29 %
|
26 %
|
31 %
|
33 %
|
24 %
|
|
Social
Security
|
26 %
|
13 %
|
18 %
|
27 %
|
40 %
|
|
Personal savings or
investments
|
23 %
|
27 %
|
24 %
|
20 %
|
22 %
|
|
Support from spouse /
partner
|
8 %
|
11 %
|
10 %
|
7 %
|
6 %
|
|
Other
|
6 %
|
7 %
|
6 %
|
5 %
|
5 %
|
|
Inheritance
|
6 %
|
10 %
|
6 %
|
6 %
|
2 %
|
|
Support from
children
|
3 %
|
6 %
|
4 %
|
3 %
|
1 %
|
"In the coming years, we will see a staggering $90 trillion generational transfer of wealth, but
who will see it depends a great deal on people's financial
planning," said Kamilah
Williams-Kemp, chief product officer at Northwestern Mutual.
"Long-term financial planning includes many goals and milestones,
but the one that could have the most meaningful and lasting impact
on families over generations is leaving a legacy through estate
planning. Our research shows that people who expect an inheritance
say it can be the deciding factor in whether or not they can
achieve financial security. That's very powerful."
A Very Meaningful Money Move for Some – and They're Aiming to
Help Their Kids
Among those expecting to leave an inheritance, two-thirds (68%)
say it is either their "single most important financial
goal" or is "very important." Interestingly, it is more of a
priority for younger adults than older with 75% and 81% of Gen Z
and Millennials respectively saying it is either their single most
important financial goal or very important, versus 65% of Gen X and
46% of Boomers+ who say the same.
|
How important of a
financial goal is it for you to leave something for your kids / the
next generation?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
It is my single most
important financial goal
|
17 %
|
14 %
|
22 %
|
18 %
|
11 %
|
|
Very
important
|
51 %
|
61 %
|
59 %
|
47 %
|
35 %
|
|
Somewhat
important
|
20 %
|
21 %
|
13 %
|
22 %
|
25 %
|
|
Not that
important
|
6 %
|
1 %
|
2 %
|
7 %
|
14 %
|
|
Not at all
important
|
7 %
|
2 %
|
3 %
|
6 %
|
14 %
|
Far and away, most people who expect to leave an inheritance
plan to give it to their children and grandchildren.
|
To whom do you, or
would you, expect to leave your inheritance and / or charitable
gift/donation?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
Children/Grandchildren
|
71 %
|
69 %
|
71 %
|
74 %
|
70 %
|
|
Spouse
|
42 %
|
53 %
|
44 %
|
37 %
|
36 %
|
|
Charitable
organizations / causes / religious institutions
|
35 %
|
38 %
|
29 %
|
30 %
|
43 %
|
|
Extended family
members
|
27 %
|
34 %
|
28 %
|
23 %
|
21 %
|
|
Friends
|
13 %
|
24 %
|
16 %
|
4 %
|
7 %
|
|
Not sure
|
2 %
|
2 %
|
1 %
|
3 %
|
1 %
|
"Leaving an inheritance is an important goal that extends far
beyond dollars and cents," said Williams-Kemp. "It's about
providing stability, opportunities, and a foundation for future
generations to build upon. That's why it's essential to plan and
communicate with family and loved ones to ensure your legacy is
protected."
However, the research finds nearly half (47%) of Boomers+ who
expect to leave an inheritance or gift have not talked to family
about their financial plans. More than a third of Gen X (38%) say
the same.
Transfer Troubles and Solutions
Six in 10 American parents say their children do not value
financial responsibility at the same levels that they do. And among
them, more than half (52%) are concerned that their variance in
values could negatively impact the family's assets from one
generation to the next.
Additionally, the research finds that four in ten Boomers+ (40%)
and two-thirds of Gen X (65%) do not have a will. Among the primary
reasons: people think they don't have enough assets, they're too
young, it's complicated and awkward to think about, and they're
uncertain about where to leave their assets.
|
Do you have a
will?
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
Yes
|
38 %
|
20 %
|
27 %
|
35 %
|
60 %
|
|
No
|
62 %
|
80 %
|
73 %
|
65 %
|
40 %
|
|
|
Why don't you have a
will? Please select all that apply.
|
|
All
|
Gen Z
|
Millennials
|
Gen X
|
Boomers+
|
|
Don't have enough
assets.
|
34 %
|
25 %
|
36 %
|
37 %
|
37 %
|
|
Too young.
|
31 %
|
74 %
|
38 %
|
10 %
|
2 %
|
|
It's complicated and
awkward to think about.
|
17 %
|
12 %
|
17 %
|
18 %
|
22 %
|
|
It's depressing to plan
for the end of life.
|
17 %
|
17 %
|
19 %
|
19 %
|
13 %
|
|
Unsure of who / what to
leave assets to.
|
17 %
|
19 %
|
18 %
|
16 %
|
17 %
|
|
Other
|
7 %
|
2 %
|
6 %
|
11 %
|
12 %
|
|
Not sure
|
14 %
|
6 %
|
12 %
|
18 %
|
20 %
|
One thing most Americans do feel comfortable passing along:
financial insights. Three in four parents (76%) say they would feel
comfortable formally including their teenage or young adult
children in their annual meeting with their financial advisor. When
asked to select the primary reasons why, most saw the value in
"teaching / instilling in children good financial habits" (71%) and
"introducing them to financial planning concepts" (58%).
"The primary way wealth is passed from one generation to the
next is through a will, life insurance and an estate plan," said
Williams-Kemp. "It's critical for many to develop these financial
documents as a good step towards creating generational wealth.
However, it's clear that inherited wealth is not indefinite wealth.
Financial knowledge can be even more important to pass along to the
next generation. Beyond a financial gift, more parents want to pass
on proven financial tips to their kids to be successful in the
future. These conversations about money are also excellent
opportunities for parents to learn about their kids' goals and
values, and vice versa."
About The 2024 Northwestern Mutual Planning & Progress
Study
The 2024 Planning & Progress Study was conducted by The
Harris Poll on behalf of Northwestern Mutual among 4,588 U.S.
adults aged 18 or older. The survey was conducted online
between January 3 and January 17,
2024. Data are weighted where necessary by age, gender,
race/ethnicity, region, education, marital status, household size,
household income, and propensity to be online to bring them in line
with their actual proportions in the population. A complete survey
methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping people and businesses
achieve financial security for more than 165 years. Through a
comprehensive planning approach, Northwestern Mutual combines the
expertise of its financial professionals with a personalized
digital experience and industry-leading products to help its
clients plan for what's most important. With over $627 billion of total
assetsi being managed across the company's
institutional portfolio as well as retail investment client
portfolios, more than $36 billion in
revenues, and $2.3 trillion worth of
life insurance protection in force, Northwestern Mutual delivers
financial security to more than five million people with life,
disability income and long-term care insurance, annuities, and
brokerage and advisory services. Northwestern Mutual ranked 110 on
the 2024 FORTUNE 500 and was recognized by FORTUNE® as one
of the "World's Most Admired" life insurance companies in
2024.
Northwestern Mutual is the marketing name for The Northwestern
Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance,
annuities, and life insurance with long-term care benefits) and its
subsidiaries. Subsidiaries include Northwestern Mutual Investment
Services, LLC (NMIS) (investment brokerage services),
broker-dealer, registered investment adviser, member FINRA and
SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC)
(investment advisory and services), federal savings bank; and
Northwestern Long Term Care Insurance Company (NLTC) (long-term
care insurance). Not all Northwestern Mutual representatives are
advisors. Only those representatives with "Advisor" in their title
or who otherwise disclose their status as an advisor of NMWMC are
credentialed as NMWMC representatives to provide investment
advisory services.
1 Includes investments and separate account assets of
Northwestern Mutual as well as retail investment client assets held
or managed by Northwestern Mutual.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/as-90-trillion-great-wealth-transfer-approaches-just-1-in-4-americans-expect-to-leave-an-inheritance-302211305.html
SOURCE Northwestern Mutual