Gen Z: The money won't fall in your lap
But experts say most of their parents' assets will dwindle before it falls into the laps of the youngest adult generation. A recent TD Ameritrade survey suggest that just 16 percent of parents plan on leaving anything for their GenZ kids.
That points back to a recurring problem shared among the past three generations, says Charles Sizemore, manager of Dividend Growth and three other investment models offered by Covestor and MultiplyWealth: Not socking away enough money in prime earning years.
The same can be said of the Baby Boomers and, for that matter, every generation that has followed. All were chronic under savers for most of their working lives, accrding to Sizemore.
“And most cannot expect to have their retirements funded by an inheritance,” he says.
In most cases, it’s a problem of division. Most Boomers have multiple siblings, and any inheritance would likely be split among heirs. So a nest egg that supported one couple in retirement will now be split into two or more pieces for each of the children.
“Unless the parents were extremely wealthy or their children's spending habits very modest, it is hard to see much of a windfall effect,” Sizemore says.
It doesn't help that most portfolios have seen little growth in the last decade and that end-of-life expenses (i.e. large medical bills) often have a devastating effect.
Writing off the youngest adult generation as a do-nothing lot, though, is lazy commentary. Many are very competitive high achievers. To the contrary, Sizemore points out that the sheer size of Gen Z and far more competitive college admissions standards means that many have had to work harder in the classroom.
Many may work hard in life, as well.
Yet if Gen Z’ers were really smart, he says that the current generation will learn two important lessons from past ones:
Inheritance is not a given, and it pays to start saving early in life.
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