The majority of baby boomers intend to spend the estimated $10 trillion they will inherit from their parents, according to a new survey by First Interstate Bank of California, Los Angeles. Three in five boomers said they expect to inherit from their parents.
Although 52% of the 500 baby boomers interviewed said they were concerned about not having enough money for retirement, 26% said they would use a $50,000 bequest to pay off debts and 25% said they would use the money to educate their children. Buying a home with the money was a priority for 14% of boomers interviewed. Just 20% said they would put the money aside for retirement. A huge majority of boomers (86%) feel their own generation isn't saving enough for their own retirement.
Those boomers who do elect to save their inheritances will need to sharpen their investment skills, found a second study sponsored by the Equitable Life Assurance Society of the United States, New York. While 82% of the 600 baby boomers interviewed for the 1994 Equitable Nest Egg Study said they were saving for retirement, only 52% have developed a financial plan and most rated their investment skills as average (48%) to below average (27%).
A majority (54%) of boomers said they will devise a financial plan soon, primarily using advice from magazine articles and books as guides.