The much-ballyhooed great wealth transfer may neither be that great nor transfer that much money to many Americans expecting an inheritance, according to the latest findings from Northwestern Mutual's 2024 Planning & Progress Study.
Only 26% of study participants said they expect to leave behind an inheritance. This will disappoint many millennials and members of Generation Z.
Thirty-two percent of millennials said they expect to receive an inheritance (not including 3% who reported that they had already received one), but only 22% of baby boomers and Gen Xers said they would leave a financial gift behind.
The gap is wider for Gen Zers, 38% of whom expect an inheritance (not counting 6% who said they had already received one). Just 22% of Gen Xers and 28% of millennials plan to leave a financial gift.
Northwestern Mutual said that based on plans alone, Generation Alpha, those born since 2010, can expect the biggest inheritance, as 36% of Gen Zers said they plan to leave a financial gift.
Among study participants who said they expect to receive an inheritance, 50% consider it highly critical or critical to their long-term financial security, rising to 59% of millennials who said this.
Gen Zers have the biggest expectations for the effect of an inheritance on their retirement strategy, looking for the gift to cover 10% of their retirement funds.
"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," Kamilah Williams-Kemp, chief product officer at Northwestern Mutual, said in a statement.
"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."
The Northwestern Mutual study is based on an online survey conducted by The Harris Poll in January among 4,588 U.S. adults.
