Just a quarter of Americans expect to leave a financial inheritance, says Northwestern Mutual

While the advice and financial industry girds itself for a $90 trillion Great Wealth Transfer, only a minority of Americans expect to leave a financial gift for their descendants, suggests new research from Northwestern Mutual.

The insurance and planning giant’s 2024 Planning & Progress Study, which took responses from 4,588 US adults through online polling in January, reveals that just one-fourth of Americans (26 percent) anticipate leaving an inheritance.

"In the coming years, we will see a staggering $90 trillion generational transfer of wealth, but who will see it depends a great deal on people's financial planning," Kamilah Williams-Kemp, chief product officer at Northwestern Mutual, said in a statement Tuesday.

The research highlights a gaping disparity between the expectations of younger generations and the actual plans of their elders. While a third of millennials (32 percent) said they expect to receive an inheritance (excluding the 3 percent who already have), just over one-fifth of Gen X and Boomers+ (22 percent) actually plan to leave a financial gift.

For Gen Z, the gap is wider, with 38 percent expecting an inheritance (excluding the 6 percent who already got theirs), but only 22 percent of Gen X and 28 percent of Gen Y planning to leave one. Generation Alpha may be more likely to benefit, as the survey found over a third (36 percent) of Gen Z intends to leave a financial gift.

Among those anticipating an inheritance, half consider it "highly critical" or "critical" to their long-term financial security, with the figure rising to 59 percent among millennials. Gen Z has the highest hopes it could make a difference, with participants from that age group believing an inheritance could cover 10 percent of their retirement funds.

"Long-term financial planning includes many goals and milestones, but the one that could have the most meaningful and lasting impact on families over generations is leaving a legacy through estate planning," Williams-Kemp said. "Our research shows that people who expect an inheritance say it can be the deciding factor in whether or not they can achieve financial security."

Two-thirds of those planning to leave an inheritance see it as either their "single most important financial goal" or "very important." This priority is stronger among younger adults, with 75 percent of Gen Z and 81 percent of millennials identifying it as crucial, compared to 65 percent of Gen X and 46 percent of Boomers+.

"Leaving an inheritance is an important goal that extends far beyond dollars and cents," Williams-Kemp added. "It's about providing stability, opportunities, and a foundation for future generations to build upon."

However, the study indicates that nearly half (47 percent) of Boomers+ who expect to leave an inheritance have not discussed their financial plans with family. Over a third of Gen X (38 percent) are similarly silent.

The research also highlighted concerns about financial responsibility, with six in ten parents believing their children don’t take it as seriously as they do. With that in mind, over half (52 percent) are worried that their family’s assets will get eroded over generations.

Additionally, the study finds that 40 percent of Boomers+ and 65 percent of Gen X lack a will for various reasons including people believing they don’t have enough assets, feeling too young, and the complexity or discomfort of planning.

Still, three in four parents (76 percent) said they’re comfortable pulling their teenage or young adult children into annual meetings with their financial advisor, citing the importance of teaching good financial habits (71 percent) and introducing financial planning concepts (58 percent).