By Ron Lieber
Copied and posted by Jennifer Ng
You’ve probably heard about the bumper sticker, even if you haven’t seen it. It’s the one on Cadillacs in Florida and Lexuses in Arizona that says “I’m spending my children’s inheritance.”
We’ve laughed at that for years. But the truth is, retirees have a lot of demands on their savings. Out-of-pocket health care costs, for one, are rising fast. At the same time, many people are not waiting until they die to help their children and grandchildren financially. And some are finding creative ways to draw on money that would otherwise be part of their estate.
For all these reasons and many more (I’ve ticked off eight below), it would be a bad idea to plan on getting any inheritance from your older relatives.
Many people have figured this out, though not all. An AARP analysis of the Federal Reserve Board’s 2004 Survey of Consumer Finances noted that 21 percent of people born after 1964 thought they would inherit some money someday. After all, most of them still have living parents or grandparents.
But with each passing year, the pressures on the nest eggs of those older people will only grow. The truly rich will be fine, as they usually are. But a lot of other people, even retirees with net worths well into the seven figures, could end up spending every dime before they die.
There is nothing wrong with that, by the way. This is a judgment-free column on that front. There is no moral obligation to leave a cent to the next generation. And there are some people who struggle each day to make ends meet who only wish they could leave an inheritance.
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