Mass affluents are saving less in anticipation of inheritance. But there’s a big problem
“Inheritances should be treated like bonuses: they are never guaranteed. The strongest financial plan can stand on its own, with or without an inheritance,” said Solomon Schmidt, CFP, executive vice president and head of mass affluent wealth at Key Wealth. “These findings tell a story we see play out in conversations with clients and families every day. When you believe a safety net is coming, it changes the calculus behind saving, investing and financial planning overall.”
Behavior shifts around unverified money
Among respondents whose financial decisions have been influenced by an anticipated inheritance, 40% said they’re saving less for retirement, 36% are taking on more investment risk, and 18% are spending more on lifestyle or travel.
The financial impact is significant. 44% said they have cut back on savings or investing by at least $25,000 over the past five years, and for 36%, that shortfall reaches $100,000 or higher.
Six in ten respondents describe their financial plan as “very prepared” regardless of whether an inheritance materializes, but a quarter admit they would need to work considerably longer than planned if the expected inheritance failed to appear, and close to one in five, 19%, would face a scaled-back retirement.
Healthcare and long-term care expenses were flagged as the biggest threat to those plans, cited by 40% of respondents, ahead of a family member outliving their assets (33%), shifts in estate or gifting arrangements (20%), and market volatility (19%).
