Merrill Lynch: Affluent millennials, Gen Z are relying on inheritance

The rich are getting richer — and their kids are hoping to as well.

One-third of “mass affluent” Americans say their financial stability depends on receiving an inheritance, according to a new Merrill Edge report. Specifically, 32% of , 63% of Gen Z, and 67% of Gen X are anticipating a windfall, mainly from their parents or grandparents.

Their expectations aren’t necessarily the result of a silver-spoon upbringing.

Business Insider’s Hillary Hoffower reported that millennials born in the 1980s are at risk of becoming a “lost generation” that accumulates less wealth during their lives, thanks to coming of age during a period of market fluctuations, high unemployment, and weak wage gains.

Citing a report by the Federal Reserve Bank of St. Louis, Hoffower wrote older millennials had wealth levels 34% below where they would most likely have been if the financial crisis hadn’t occurred.

The Federal Reserve Bank of Minneapolis also found last year that the “share of children whose income exceeds that of their parents fell by about 3 percentage points” in the period staring in 1980 — an alarming signal of a decline in US social mobility, or the ability to rise to a higher level of income, according to Business Insider’s Pedro Nicolaci da Costa.

Evidently, younger generations are relying on money from their parents to make up for that lack of wealth.

Within in the next few years, baby boomers are set to pass on trillions of dollars of wealth to their kids. Despite 87% of Gen Z claiming a “do-it-myself” approach to money decisions in the Merrill Edge survey, they’re more than twice as likely as other generations to count on grandparents, extended family, and even friends, for financial help.

“We’ve never seen such a strong reliance on receiving an inheritance,” said Aron Levine, head of Merrill Edge. “With shifting priorities and growing lifespans, Americans are finding new ways to ensure their financial stability and as such are increasingly looking to others,” he said in the report.

Merrill Edge and Convergys surveyed 1,000 mass affluent Americans across the country for the report. Mass affluent, in this case, was defined as 18 to 40-year-olds (Gen Z and millennials) with investable assets (excluding real estate) between $50,000 and $250,000; or 18 to 40-year-olds with investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or 41 years old and up (Gen X and baby boomers) with investable assets between $50,000 and $250,000.

“While it’s great to see investors thinking ahead,” Levine said, “the key to financial freedom is outlining and following an action plan for short- and long-term goals beyond an inheritance — which may or may not ever come.”

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