The average inheritance received in 2016 was about $295,000, up from $169,000 in 1989, after adjusting for inflation.
United Income, an online retirement planning firm, was founded in 2016 and acquired in July by Capital One Financial Corp.
As more Americans live longer without the safety net of a traditional pension, the data suggest they’re spending frugally to make sure their wealth lasts. The result is more Americans dying before they can spend all of their savings. Financial advisers say they often need to encourage affluent clients to enjoy their wealth rather than hoarding it.
Only about 9% of estates consist entirely of a house or other property, United Income’s analysis shows. The average estate is 46% stocks, bonds, cash and other liquid investments –- giving an immediate boost to recipients’ own retirement planning at a key time.
The money left behind for middle-class Americans is dwarfed by that inherited by the children of the very wealthy. United Income’s estimates don’t include gifts made during donors’ lifetimes –- a typical move in estate planning for the ultra-high net worth cohort, often using trusts. It still found a widening gulf between the super rich and everyone else.
The median inheritance has risen only about $15,000 in three decades, while they’ve more than doubled for the 0.3% of Americans receiving at least $1 million. In 1989, their inheritances averaged an inflation-adjusted $2.7 million. By 2016, they were each getting an average of $6.6 million.
This article was provided by Bloomberg News.