This is an amusing article by the New York Times.  It suggests that there are 8 reasons that Generation Xers and younger will not be inheriting as much money as previous generations.  And those who did expect to inherit might be sorely disappointed.

First the article suggests that people are living longer.  Thus their retirement savings must last longer than previous generations. 

Second, the rules for medicare and social security are changing as we speak.  Now the age to get SS is higher, and payouts are being taxed.  As for Medicare, less procedures are being covered and the premiums are rising.  So people need to fork over more cash out of pocket.

Third, less people have pensions.  So they no longer have a reliable stream of income during retirement, instead they have to depend upon their investments.  Part of the problem here, is people have to actively save more instead of relying on a company bailing them out.

Fourth, which reiterates on second reason, out of pocket costs are rising exponentially.  But this applies to not only retirees but everyone.  We’re all in trouble with medical care in the US being exorbitant and less coverage by insurance. I’m not sure if we aren’t going to have to revamp the whole system.

Fifth because of divorce people have less money to pass on.  Instead it goes to supporting two households.  And everyone knows that divorce also affects a person’s ability to save for retirement.  Sixth, the article suggest that one of the biggest inheritances previously was the family home.  But now people are cashing ou their home equity to survive, so it will not longer be a given inheritance.

Seventh, people are no longer buying life insurance for life. Instead they are using term life insurance which they discontinue after their children leave home.  So like the family home, money from life insurance which people used to count on is not as guaranteed.

Finally, the article suggest that maybe the reason people won’t have an inheritance because their parents are helping them while they are alive.  Instead people are giving their children down payments on home, paying student loans, etc.  So they are “transferring” their wealth earlier. 

Interesting points about why people won’t inherit money. I think that lack of saving compounded by lack of pensions compared with previous generations will make people less wealthy when they retire. This in turn will translate into less inheritances for people.  And yes term life insurance which most financial advisors suggest will not leave an inheritance.

So do you think you’ll get an inheritance?  Personally, Idoubt it.  Mostly because my mom will live a long life.  So her care in a nursing home will likely eat up her savings. And yes that’s what her money should be used for.  I don’t think that sheltering the money by giving it to me now is good karma. 

That giving me money she saved so medicare/medicaid will pay for her nursing home care is not appropriate.  She saved it and she should use it.  Maybe it’s wrong, but I almost feel that by “hiding” the money gives the impression that you should only care about yourself and everyone else should pay for you when you can’t.

Besides I’d rather have her around than all her money.