A recent article in the Wall Street Journal claims that the baby boomer population will find themselves without a hefty inheritance from their parents. Traditionally, children could expect to receive something from their parents when mom and dad died. Unfortunately, many baby boomers have relied on this notion as a way to pay for retirement. They expected to cash in on mom and dad’s estate only to find that no such estate exists. Many have not properly funded their own retirement while also suffering from huge financial losses in 2008.
Individuals are living longer and requiring more money for their living and medical expenses. Although these parents were diligent savers, they did not expect to live into their 80s and beyond. Longevity is a blessing and unfortunately a financial curse for some families. Baby boomers are finding themselves in the scary situation of expecting zero inheritance while simultaneously dipping into their own financial pockets to pay for their parents’ care.
The anxiety surrounding inheritance and financial woes is often worsened by parents’ refusal to discuss such issues with their children. Many parents are uncomfortable discussing finances with anyone, let alone their own children. However, an open discussion can help ease anxieties and create valuable planning opportunities for both parents and children. It can also set realistic goals and expectations for future expenses.