The "something for nothing" society?

 

A while back, CNBC made an interesting analysis of the difference between what millennials expect to inherit, and what baby boomers expect to leave their children.

On the cusp of the greatest generational wealth transfer in history, baby boomers are set to pass more than $68 trillion on to their children ... But they may not be handing down as much as their children think.

Studies show a growing disconnect between how much millennials expect to inherit in the “great wealth transfer” and how much aging boomers plan on leaving them.

More than half, or 52%, of millennials who are expecting to receive an inheritance from their parents or another family member said they expect to receive at least $350,000, according to a recent survey of more than 2,000 adults by Alliant Credit Union. But 55% of baby boomers who plan to leave behind an inheritance said they will pass on less than $250,000.

Part of the discrepancy is “wanting to make sure people have enough money to live on before they start gifting,” taking into account their own life expectancy, long-term care and other considerations, said Susan Hirshman, director of wealth management at Schwab Wealth Advisory in Phoenix.

“There are a lot of what ifs,” she added.

Tack on inflation, geopolitical uncertainty and fears of a recession, and boomers suddenly may be feeling less secure about their financial standing — and less generous when it comes to giving money away.

. . .

At the same time, views of inherited wealth are changing, Hirshman noted. Parents may feel less inclined to pass on large sums of money, she said. The mentality is “I earned this and so should you.”

There's more at the link.

I used to find this interesting - not to mention depressing! - when I was still active as a pastor.  The number of younger family members who approached me about their elders, when the latter were in poor health, and asked me to find out what they'd allocated to their children and others in their wills, was a constant surprise to me.  Even worse were those who were dissatisfied with arrangements they already knew had been made, and who asked me - in some cases, tried to bribe me - to put pressure on their elders to change their wills at the last minute, so to speak.  Some lawyers confirmed to me that they faced the same pressures from younger members of wealthier families.  It seemed that the more people had, the more they wanted, even at the expense of other family members.

In one sense, I've always been grateful that my parents - both born just after World War I - never faced this problem with us kids.  They did well by anyone's standards, surviving World War II, emigrating to a new country and building a new life there, along with four children;  but as a family we were never wealthy.  They used their money, rather than clung to it, so there wasn't very much left at the end of their lives to leave to their kids.  I think we were better off knowing that.  None of us lived in the expectation that our parents "owed" us anything, financially speaking, so there was nothing for us to be disappointed about when the time came.

What also bothers me these days is that so much family "wealth" is tied up in physical objects, or stocks and bonds, where the owners have little or no control over what might happen to their value.  If a housing crash hits, a baby boomers' house that they valued at, say, $750,000 might be worth half that - and that's if they can find a buyer at all.  At today's mortgage rates, that's far from guaranteed.  In the same way, stock and bond prices fluctuate all the time.  If we get hit by a major recession or depression - something that's not unlikely, thanks to the undisciplined spending and feckless irresponsibility of our political leaders - those stocks and bonds will fall with the market.  It can become a financial bloodbath, like the start of the Great Depression, or the South Sea Bubble, or the tulip disaster.  There's no reason whatsoever why we might not see such events unfold in our own time as well.  What that might do to the inheritance some expect is depressingly easy to calculate.

I guess, in so many words, we need to remember that we are responsible for our own life, liberty and the pursuit of happiness - not to mention putting food on our table and a roof over our heads.  In the final analysis, nobody owes us a living.  Our parents and grandparents certainly don't.  It's up to us to make provision for our own needs.  It seems a lot of younger families today (not to mention the "Gibsmedat" generation in our inner cities, and the millions of state-subsidized illegal aliens pouring across our border thanks to the Biden administration's dereliction of its duties) have lost sight of that.

What will happen when the (final) penny drops, and there's no more free money being handed out?

Peter