My 86-year-old mother-in-law gave my husband his annual holiday check last weekend when we visited. Sometimes she gives me my own check, but this year she said she didn't think I needed the money and that if I did, my husband could share his.
I laughed. Family money -- even when there isn't much of it -- is a tough topic.
A study by the Center for Retirement Research at Boston College for the MetLife Mature Market Institute calculated that boomers will inherit $8.4 trillion in 2009 dollars. The median inheritance per person is $64,000. About $2.4 trillion has already been received as the Greatest Generation passes on. The wealthiest boomers will be given an average of $1.5 million, while those of us at the other end of the spectrum will be left $27,000. While it may not be a fortune, it's actually a higher percentage of the less affluent group's overall income, the study said. In all, two-thirds of boomers will inherit something.
This study referred to a previous study in 1986 that looked at the accuracy of this information and concluded -- not surprisingly in my view -- that the amounts differed significantly depending on who was doing the reporting. The previous study by William G. Gale and John Karl Scholz, compared estimates of the gift by recipients of the inheritances to the estimates of those making the gifts. Givers tended to inflate the amount of the gift while recipients underestimated the inheritances they received. Gale and Scholz concluded that information from the givers was probably more accurate because recipients didn't want to think of themselves as financially dependent. But who knows. Ultimately, the givers weren't around to verify when the money actually changed hands.
The Center for Retirement Research also looked at whether the current economic downturn is going to affect what boomers receive, and concluded that declining stock and home values are likely to cut inheritances by an average of 13.1 percent.
My husband, the CPA, says you can never account for money you don't have. And the Center of Retirement Research points out that this is particularly true of inheritances. "Boomer households should not count on an inheritance to eliminate the need for increased retirement saving," the study concludes.
The researchers also urged boomers to talk to their parents about their financial situation and their estate plans. Personally, I'd find it easier to ask my mother-in-law about her sex life.