With the end of the year approaching, and the possibility of further changes in the federal estate tax looming, many families have inheritances and legacies on their mind. And among well-off boomers, the idea of providing something for their heirs remains a strong motivator. Fifty-five percent of boomers with $3 million or more in investable assets consider it important to leave their kids a financial inheritance, according to most recent U.S. Trust Insights on Wealth and Worth study.
That’s a nice sentiment, for sure. But many advisers and wealth managers argue that leaving an inheritance, if not done right, can do more harm than good.
“Don’t hold your breath on an inheritance, kids. We worked hard for our money. We deserve to enjoy it.”
That’s the message from nearly half the 457 high-net-worth boomers ($3 million-plus in assets) recently surveyed by wealth management firm U.S. Trust. Leaving an inheritance, they said, is not in their top three priorities.
The survey found that three-quarters of respondents believe their wealth came from their own focus and hard work, while half said they paid a steep personal price—limiting time off, neglecting their families, mishandling relationships. Maybe that’s why, as they approach retirement, they’re planning to spend more on themselves, traveling (64 percent) and having fun (36 percent).
Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.