Giving and Receiving Wealth: What to Know

As baby boomers move into and through retirement, they’re poised to pass on substantial wealth to younger generations. This financial shift will impact each generation (and each family) differently, but a few common themes and trends are likely to emerge. If you’re beginning to consider the ins and outs of transferring wealth thoughtfully, keep reading for a few details to keep in mind.

Baby Boomer Bequests

Older adults’ first priority should likely be their own health and retirement needs. However, if you have more assets than you might use during your lifetime, it’s important to decide what will happen to the rest.

One option is to help children or grandchildren while you’re living, so you can witness the impact of your gift. Options include funding a 529 plan for college, paying off student loan debt, or helping with a down payment on a major purchase, such as a first home. 

Don’t forget: You can help with more than just money. Passing down your hard-earned financial wisdom can be even more important. You might consider setting your child up to meet with a financial planner, encouraging contributions to retirement accounts and emergency funds, and stressing the benefits of avoiding high-interest debt.

And along with creating a will, parents may want to talk to their children about what they might inherit.

Generation X and Millennials

Younger generations may want to keep a few things in mind about the great wealth transfer. First, it’s probably better not to make assumptions about inheriting particular assets, be it a house, a business or a bank account. Budgeting and careful planning are always important, and in the interest of smooth family relations, communication is key when it comes to understanding the giver’s wishes when using various funds. 

Whether you’re planning to transfer your own wealth or wondering how to manage an inheritance, feel free to reach out anytime for assistance.