Does An Inheritance Improve Your Retirement Security?

The Center for Retirement Research at Boston College released an issue brief this month on How Do Inheritances Affect the National Retirement Risk Index?

You might immediately conclude that receiving an inheritance would definitely improve one’s retirement security, but the answer really is the classic law school “it depends” answer.  “The bottom line is that, while anything that boosts households’ assets is beneficial to their financial situation, inheritances are not likely to be decisive in determining retirement preparedness for many households.”  The report notes that the very wealthy have achieved retirement security so an inheritance won’t make much difference.

On the one hand, past research has shown that higher-income households – who are less likely to be unprepared for retirement – are more likely to receive inheritances and to receive larger amounts than their lower-income counterparts. On the other hand, the anticipated inheritance receipts of low- and middle-income households represent a much larger percentage of their current wealth, suggesting that inheritances could potentially be more influential in boosting their retirement security.

A pdf of the report is available here. Key findings from the report are available here.