Recently, the Wall Street Journal reported that withdrawals from 401(k)’s have exceeded new deposits for the first time. This is to expected as more Boomers hit retirement but part of the change has come for a different reason, more money is being given to support younger generations. The biggest transfers are from the youngest members of the Boomers, think age 50-64 crowd, with them giving an average of $4,000 per year. But with all these gifts comes one stark reality, the inheritance many expect is going to be lower and potentially create intrafamily fights if one child benefited more from gifts during the deceased lifetime. Only time will tell the full extant of the impact but it is worth keeping an eye on as the situation evolves.
See Randall W. Forsyth, Boomers Spend Their Kids’ Inheritance — on Supporting Them, Barron’s, June 26, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
