Intergenerational wealth, not savings, is the key ingredient in retirement security and a primary reason for persistant retirement inequality, according to a recent survey by the AP-NORC Center for Public Affairs.
According to the research loans and gifts from older relatives at some point in a person’s adult lives tend to presage an inheritance later in life. As a result, Americans who can count on wealth transfers from parents or other relatives tend to be more financially prepared to retire, and to enjoy more flexibility in their retirement decision making.
Americans with an inheritance are far more likely than those without one to feel ready for retirement, 38 percent versus 17 percent
According to the survey, 21 percent of Americans over age 50 have received loans or gifts valued at $10,000 or more from older relatives or parents.
Source: FA Magazine