Less than half of millionaire boomers say that leaving money for their kids is a priority for them, according to a new U. S. Trust study. Instead 64% of boomers say they plan to use their money to travel and more than one in three say they want to use it to “have fun.”
This is in contrast to boomers’ parents – the greatest generation. According to another study published by the Journal of Financial Planning, older retirees are seven times more likely than boomers to believe they owe their children an inheritance.
“But boomers are more concerned with leaving behind things like values and keepsakes,” says Katie Libbe, the vice president of consumer insights for Allianz Life, the company that conducted the survey.
Even boomers who do plan to leave an inheritance may do so with strings attached. Some parents have concerns about how their kids would invest and spend the money and only one-third of the parents in the U.S. Trust Study felt that their children will be able to handle an inheritance.
“Make room kids, we’ll be living with you when we’re old.”
Boomers are expected to live longer than any other generation. At the same time, it’s no secret they haven’t saved nearly enough for retirement. Overall, the average retirement savings shortfall for married baby boomers is about $30,000, according to the Employee Benefit Research Institute (EBRI).
Nearly half of early boomers, born between 1948 and 1954, and 44% of late boomers, born between 1955 and 1964, may not be able to afford even basic living expenses in retirement, according to EBRI. The result? Kids could be supporting mom and dad well into their eighties and nineties.
One of the biggest drains on boomer retirement savings will be health-care costs. Medicare pays for just over half of the health-care expenses that the typical elderly person will face, estimates EBRI. A couple that is 65 today will need nearly $300,000 to cover those costs.
If parents do move in, their kids should expect to spend an extra $6,000 and $10,000 annually on food, clothing and other basics according to Caring.com, a website devoted to helping caregivers. Add thousands more for big-ticket items like wheelchair ramps or home health-care aids. Expensive as that sounds, it’s still less than the $60,000 to $100,000 per year it would cost to move a parent into an Assisted Living Community.
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