There is a bumper sticker that makes the rounds among retirees. The exact wording may differ a bit depending on the version that you see, but the gist of it is this: “We’re spending our children’s inheritances.”
Some people are of the mind that they have worked hard for their money and they really are not concerned about what they may or may not be leaving behind. Others do in fact have very specific ideas about what they would like to be able to do for their children and grandchildren.
However, these people may have financial limitations, and this can even enter into the picture for people who are reasonably affluent.
Merrill Lynch compiles relevant statistics on an ongoing basis, and in 2009 they found that 54% of people that they queried who were in possession of at least $250,000 in investment assets felt as though preserving inheritances for family members was a primary objective.
The question was asked of the identical demographic group in 2012, and the percentage of individuals who were prioritizing inheritance preservation was just 41%.
When you examine this statistical comparison you come away with two distinct impressions. Without question the economic fiasco that engulfed the country back in 2007 and 2008 reduced potential inheritances significantly.
Increased longevity is another factor that is reducing inheritances and contributing to shifting priorities.
No one can step outside of the economic paradigm as we know it, and there are things that are out of the control the individual. However, if you act within a conservative financial framework throughout your life you may find yourself in a position to weather financial storms when they present themselves.