Americans advised not to base retirement plans on expected inheritance — MarketWatch
In the United States, one-third of people under the age of 65 expect to receive an inheritance or financial gift in the future, according to a LendingTree study. Among Americans earning $100,000 a year or more, 53% of respondents gave this answer. At the same time, 43% of those expecting such funds said the anticipated payment significantly affects their retirement planning.
As MarketWatch reports, only one-quarter of respondents expecting an inheritance or gift said this prospect had not affected their retirement plans.
Not a guaranteed source of funds
HBKS Wealth Advisors financial adviser V. Michael Lofley warned that an inheritance can be a useful addition to retirement resources, but should not be the foundation of such a plan. According to him, there are no guarantees even when a person is convinced that the inheritance exists and is intended specifically for them.
LendingTree estimates that homeowners aged 65 and older may transfer approximately $17.2 trillion between 2026 and 2045, or an average of $859 billion annually. However, only 43% of Americans aged 65 and older plan to leave an inheritance or make a financial gift. Consulting firm Cerulli Associates, for its part, estimates the size of the so-called great wealth transfer to younger generations at $72.6 trillion over the next 20 years.
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Expenses may reduce an inheritance
Only 57% of people expecting an inheritance or gift have clearly discussed it with the potential giver. At the same time, 16% of those expecting an inheritance have not discussed it at all with the person from whom they hope to receive the funds.
LendingTree chief consumer finance analyst Matt Schulz said expectations should be lowered and savings should be built regardless of a possible inheritance. Risks to the size of future transfers include longer life expectancy, health care and long-term care expenses, inflation, market fluctuations, taxes, and rising living costs.
According to Fidelity Investments, a 65-year-old retiring in 2026 will spend an average of $185,500 on medical needs during retirement. This amount does not include long-term care expenses. Presidio Wealth Partners financial adviser Scott Bishop advised considering a potential inheritance as only one component of a plan and modeling a conservative scenario, including retirement without these funds.
