Baby Boomers Would Rather Blow Cash Than Leave More For Their Kids To Inherit: Study

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There's a "Seinfeld" episode in which George Costanza believes he'll inherit hundreds of thousands of dollars from his parents.

His hopes are crushed when he sees them walk into a fancy restaurant and they tell him they're "blowing it all."

Baby boomers might as well tell their kids the same.

A majority plan on blowing their cash instead of saving to leave a bigger inheritance to millennials, according to a study released last week.

baby boomers
Baby boomers paddle a kayak in this stock photo. (Photo: Michael DeYoung/Getty Images)

HomEquity Bank, a Toronto-based bank that focuses squarely on helping older Canadian homeowners take advantage of their equity, found that 86 per cent of Canadians over age 55 are "unwilling to forgo doing, achieving or acquiring something in order to provide a larger inheritance to their adult children."

Sixty-two per cent of this group say they're not concerned about leaving something behind for their kids after their own needs are taken care of first.

This feeling is even more pronounced among Canadians aged over 65. Seventy-one per cent of them aren't worried about leaving money for their children.

“Seniors are not feeling pressured about leaving an inheritance,” Yvonne Ziomecki, HomEquity Bank senior vice president, said in a news release.

"They're very comfortable with wanting to enjoy their retirement. And, with the majority of our clients, they know there will still be an inheritance that will go to their children."

"Seniors are not feeling pressured about leaving an inheritance."

Spending by senior husband-wife households grew at 4.7 per cent annually between 1997 and 2002.

And many seniors are tapping the equity in their homes to finance their lifestyles, Ziomecki said.

"They've watched the value of their home increase dramatically and they are accessing this equity to enhance their golden years."

Baby boomers certainly had an easier time buying homes than subsequent generations:

down payment

In 1976, it took Canadians five years to save for a 20 per cent down payment, according to a study released by Generation Squeeze in May.

Today, that average has increased to 12 years across Canada — and even longer in major cities.

Torontonians today would need to work for 15 years to save for such a payment, while Vancouverites would need to work for 25 years.

"They've watched the value of their home increase dramatically and they are accessing this equity to enhance their golden years."

The HomEquity Bank study comes months after a Vancity report suggested millennials have high — sometimes unrealistic — expectations of what they'll inherit from their parents.

Over 39 per cent of Vancouver millennials expect inheritances over $300,000; but only 12 per cent of parents said they're prepared to leave that amount behind for their children.

HomEquity conducted its research by asking 750 Canadian parents over 55 years old complete an online survey from Aug. 22 to 24. The poll has a margin of error of 4.1 percentage points.

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