Friday, September 16, 2011

Leaving An Inheritance For Children Not A Priority For Boomers

Time's on-line magazine recently ran an interesting article on Baby Boomers. Citing a study by US Trust, it states that less than half of Baby Boomers indicate that it is a priority for them to leave an inheritance to their children; only 49% stated it was a priority. I would be interested to see what the statistics are for The Greatest Generation, a.k.a., the parents of the Baby Boomers. From my personal experience with clients, they are both thrifty had have a strong desire to leave an inheritance to the following generation(s).

Why? Speculation is that the Baby Boomers, commonly labeled selfish, believe they've done enough for their children by paying for their education and in some cases helping with the down payment on a first home. The article also states that Boomers feel their children are not well equipped to handle a lump-sum inheritance.

As the mother of young children, ages 3 and 1, I noticed a connection between the first reason and the second. Unless parents give their children opportunities to pay for things, and the opportunity to make mistakes, the children will never develop good financial sense. Having your education paid for or receiving a gift to buy your first home seem wonderful, but it leaves a generation of children who haven't developed those skills. Having financed my own education (all 9 years of it) and working with my husband to save for a 20% down payment on our first home, I'm thankful that as a child I learned how to be financial savvy. Now as a mother I am challenged with the determination to pay for my children's education (529 plans were established for both within weeks of receiving their SSN), but give them the chance to learn about finances before they leave home.

As for those Baby Boomers, they are enjoying their money now. Vacations, fine wine, and other luxuries that they probably skipped while raising children and building those nest eggs. Enjoy!

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