Half of those who expect an inheritance say it would be critical to their retirement security, finds new data out today from Northwestern Mutual.
According to the firm’s latest 2024 Planning & Progress Study, 50% say an inheritance would be integral to their long-term financial security and retirement planning, with 17% adding that it would be “highly critical.”
This was especially true for younger generations, as 54% of Gen Zers and 59% of Millennials touched on the significance an inheritance would have on their retirement. Gen Zers were also the group who had the highest expectations on how an inheritance would impact their retirement strategy, as the average believe it would cover 10% of their retirement funds, reports Northwestern Mutual.
On the other hand, 46% of Gen Xers and 30% of Baby Boomers said receiving such a legacy would help with their retirement savings.
“In the coming years, we will see a staggering $90 trillion generational transfer of wealth, but who will see it depends a great deal on people’s financial planning,” said Kamilah Williams-Kemp, chief product officer at Northwestern Mutual. ” Our research shows that people who expect an inheritance say it can be the deciding factor in whether or not they can achieve financial security. That’s very powerful.”
Overall, most respondents still depend on their workplace retirement account or Social Security to sustain them through retirement. Respondents expect their 401(k) or other retirement account to deliver 29% of overall retirement funding, while others say Social Security will fund 26% of their retirement. Participants are also planning to fund 23% of their retirement through personal savings or investments, and 8% of their savings through the support of a spouse or partner.
The 2024 Planning & Progress Study was conducted by the Harris Poll, and surveyed 4,588 U.S. adults ages 18 or older.