If a big inheritance is your retirement plan, don't get your hopes up

USA Today

13-03-2025

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If you're biding your time until Mom or Dad or that rich uncle passes on, passing their wealth to you, then prepare yourself for a shock: Most of us will never inherit.
Inheriting money from a departed loved one is a gateway to wealth for millions of Americans, especially those who are older, white, college-educated or wealthy already, according to numerous studies.
But fewer than half of Americans inherit anything.
'Most households will pass on little or no inheritance to the next generation,' said Chuck Collins, director of the Program on Inequality and the Common Good at the progressive Institute for Policy Studies, or IPS.
Only about 30% of older Americans, ages 47 to 70, have received an inheritance or other intergenerational wealth transfer, according to a 2022 analysis by the Federal Reserve Bank of Richmond.
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If you look at younger adults, the share who have inherited dips well below 20%. By age 75, nearly two-fifths of Americans have reaped an inheritance, according to a 2023 report from the Washington Post.
'That means the typical family is not leaving an inheritance,' said Michael Neal, a senior fellow at the Urban Institute.
This age range is the sweet spot for inheritance
You're most likely to inherit between the ages of 56 and 65, according to a 2021 analysis by researchers at the Wharton School of the University of Pennsylvania. Americans ages 46 to 55 are next most likely to inherit.
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All of those studies draw from the federal Survey of Consumer Finances, conducted every three years and most recently in 2022.
Among those who do inherit, the average amount is $266,000, as of 2022, the Washington Post reports.
The good news, if you hope to inherit, is that inheritances are becoming more common.
'Simply put, there are more people aging into prime inheritance age over time,' said Kent Smetters, a Wharton professor who is involved in inheritance research.
Whether you inherit, and how much, depends on your age, your race, your education, and the wealth you already have, among other factors.
Among older Americans, 35% of white households have received an inheritance, compared with 13% of Black households, the Richmond Fed reports. For those who inherit, the average amount is $154,260 for Blacks, $303,100 for whites.
'In aggregate, there just tends to be less transferred to Black families,' Neal said.
One reason why Black households receive fewer and smaller inheritances is that Black Americans are less likely to have a will, according to research by the Center for Retirement Research at Boston College.
'The racial wealth gap has proven to be a persistent problem,' said Gal Wettstein, a senior economist at the research center.
Wealth transfers go to about 22% of older Americans who have only a high school degree. The share rises to 39% for college graduates, according to the Richmond Fed.
Most Americans hope to leave an inheritance
America's inheritance story comes with a sad twist: Most people really do want to leave something behind.
Roughly three-fifths of Americans hope to pass a sizable estate to their heirs, either definitely or "possibly," the Urban Institute reported in a 2023 study. Those expectations are roughly the same for white and Black families.
Yet, for many families, life gets in the way. Some households don't adequately plan to leave a significant estate, researchers said. Others spend down their assets paying for long-term care. Many families never achieve homeownership, a key step in building wealth.
"You can't pass the wealth off if you don't have the wealth in the first place," Neal said.
Inheritance makes wealthy Americans wealthier
Though it might sound unfair, Americans who have high incomes tend to inherit a lot more money than those with low incomes.
The median inheritance across all incomes is $12,353, in 2019 dollars, Wharton researchers found. For households with incomes in the top 5%, the sum rises to $51,499.
If you inherit a really large bundle of cash, you're more likely than ever to be allowed to keep it, thanks in part to President Donald Trump.
As recently as 2008, estate taxes applied to estates as small as $2 million, according to the Tax Foundation. By 2017, the estate tax threshold had risen to about $5.5 million. Trump's 2017 Tax Cuts and Jobs Act doubled the non-taxable limit to $11.2 million. In 2025, the threshold stands at nearly $14 million.
As a result, fewer wealthy Americans pay estate taxes. The number of returns subject to estate taxes dropped from 15,100 in 2008 to 4,000 in 2023, according to the nonpartisan Tax Policy Center.
That trend 'will only accelerate existing wealth disparities,' said Collins of IPS, 'including the racial wealth divide.'