KNOXVILLE, Tenn. — A study by USA Today found around 68% of Gen Z and Millennials have received or expect to receive an inheritance — worth around $320,000 on average. Around 40% of them plan to use that money to pay off debt.
In total, Baby Boomers are expected to pass on around $84 trillion over the next 20 years, according to the survey — known as the "Great Wealth Transfer." The survey noted that Baby Boomers' wealth mostly comes from home ownership, with home values increasing by nearly 500% since 1983 when the first wave of that generation bought their homes.
Investment growth and lower debt levels also contributed to the massive amount of wealth owned by Baby Boomers, the study said. However, a senior vice president at Ackermann Marketing and PR said not all that wealth may be handed down to Boomers' children.
"Baby Boomers are concerned about those costs. But thankfully, it's because their life expectancy rates are much longer. And so, because they're feeling less secure about their financial situation, they're stressed about the timeline of passing a potential inheritance along to their loved ones. And so, further compacting the situation is the fact that instead of having an open conversation with their children about all this, they're avoiding the conversation altogether," said Erin Freeman, the senior vice president.
She said Baby Boomers should make an effort to speak with their children about inheritances and develop a plan that works for both their children and them.
"They've just got to put it out there on the table. Could it be a stressful conversation? Absolutely. But, it's better to proactively create that plan and talk about it, instead of avoid it," she said. "Because, if you do that, parents are setting themselves up for a situation that could potentially force a discussion and set the table for conflict."
The survey also found around 33% of respondents expect to, or already are, financially supporting their parents. It also said around 57% of Millennials and Gen Z members believe that the Great Wealth Transfer will perpetuate inequality.
The survey also said the average $320,000 inheritance, before accounting for concerns about rising prices, is less than the $431,000 price of the average home in the U.S.
Around 84% of respondents said they expect to get an inheritance of between $100,000 and $200,000, according to the USA Today survey.