While inherited wealth may provide a financial lift for some, the results of a new survey reveal that a surprising number of Americans lack confidence in their ability to manage the funds.
In the next 10 years, 15% of adults anticipate receiving an inheritance from a parent, spouse, family member or another individual. Yet, only 42% of adults who expect to receive an inheritance feel “very comfortable” handling the new wealth that will be passed down, according to findings from the latest New York Life Wealth Watch survey.
Notably, nearly twice as many women who expect to receive an inheritance (23%) feel “uncomfortable” managing their inheritance than men who expect to receive an inheritance (12%).
Adults who expect to receive an inheritance anticipate receiving a value of $738,724, on average. Among those who anticipate receiving an inheritance, 58% expect cash, 43% expect owned property like a house, 28% expect investments like stocks and bonds, 24% expect proceeds from a life insurance policy, 21% expect jewelry or other family heirlooms, and 14% expect to inherit an annuity.
Paying off debt (37%), supplementing retirement savings (35%), and preserving the inheritance with the intention of passing it down (26%) are the top three ways adults receiving an inheritance plan to use it.
Future Uncertainty
At the same time, inflation, rising credit card debt and a sense of “going it alone” in retirement are also impacting their financial confidence. Nearly 6 in 10 (58%) adults expecting an inheritance say inflation will have a medium-to-large impact on the sum. What’s more, a lack of emergency savings (29%), health care costs (27%), and credit card debt (26%) are the biggest risks adults perceive to their financial security and wellbeing.
When it comes to retirement, the survey found that many don’t feel support systems are in place to help them. Adults are split on how they view the level of support provided in retirement, with 56% of adults agreeing that there are support systems in place to help them with retirement—while 44% say that they are “doing it alone.”
Retirees (49%) are more likely than pre-retirees (42%) to agree that they are managing their retirement alone. Social Security (60%), personal savings (47%), and employer provided pension (33%) are the top ways adults plan on supporting themselves in retirement. Not surprisingly, younger generations are less likely to plan on supporting themselves with Social Security in retirement (Gen Z: 33%, Millennials: 44%, Gen X: 61%, Baby Boomers: 87%).
“Even those who are set to receive an inheritance in the next 10 years do not feel entirely confident managing it,” says Suzanne Schmitt, head of financial wellness at New York Life. “The data show us that people continue to be focused on the basics—paying down debt, building emergency savings, and contributing to their retirement—but it can feel incredibly difficult to plan for longer-term goals like buying a home, growing your family or retiring when day-to-day challenges are occupying your time and attention.”
Schmitt adds that, while Baby Boomers are the most likely generation to say they prefer to get guidance from a financial or tax professional (29%), Gen Xers and Millennials—two cohorts set to inherit from Baby Boomers through 2045—could also benefit from seeking professional advice.
Wealth Watch is a recurring survey from New York Life that tracks Americans’ financial goals, progress toward those goals and feelings about their ability to secure their financial futures. This latest poll was conducted June 8–11, 2023, among a sample of 4,437 adults.
