The year is still new and Domenic Tagliola, a Tax and Estate Planner with TD Wealth, reminds us that now is a great time to evaluate what state your savings, your retirement plans and your Will is in.
It's easy to see why being a millennial could seem like a drag. Every week brings fresh headlines trumpeting the challenges 20- and 30-somethings can face when buying homes, saving for retirement and affording the trappings of their social media–heavy lifestyles.1 But help may come from a familiar source: their families. There's strong evidence that a massive generational transfer of wealth is taking place as retired baby boomers pass down assets to their millennial children and heirs.2 The question is: Are they ready for it? A recent TD survey asked more than 6,000 Canadians whether they expect to receive an inheritance.3 And while a large portion of millennial-aged Canadians say they expect to receive assets from a loved one, only a third of them have had a conversation about it with their spouse or partner. Here's what else we learned from that survey.
THOSE BORN 1980—1996
1 in 3
MILLENNIAL-AGED CANADIANS SAID THEY EXPECT TO RECEIVE AN INHERITANCE
43% Expect to inherit or have inherited a residential property, or the proceeds from the sale of one
60% Expect to inherit or have inherited cash
34% Expect to inherit or have inherited family heirlooms
20% Expect to inherit or have inherited an investment portfolio
18% Expect to inherit or have inherited a vacation property
WHAT SOME MILLENNIALS SAY THEY WOULD DO IF THEY RECEIVED AN INHERITANCE TODAY
Contribute to retirement plan
Pay down a mortgage
Pay down non-mortgage debt
Use it to purchase a home
OF MILLENNIALS WHO EXPECT AN INHERITANCE HAVE DISCUSSED PLANS FOR USING AN INHERITANCE WITH A SPOUSE OR PARTNER
SOME MILLENNIALS WHO HAVE INHERITED ASSETS SAY IT MADE THEM FEEL
How much did they receive?
Less than expected
As much as expected
More than expected
OF MILLENNIALS WHO HAVE ALREADY INHERITED ASSETS WISH THEY HAD SOUGHT THE ADVICE OF A PROFESSIONAL
For many millennials, a sudden surge in wealth that comes from inheriting assets could dramatically change their financial situation. It can also be an overwhelming experience, both emotionally and practically. An advisor may be able to help parents and children navigate this important transition and highlight potential opportunities and priorities for everyone involved.
About the TD Survey
TD Bank Group commissioned Environics Research Group to conduct a custom survey of 6,021 Canadians aged 18 and older. Responses were collected between February 20 and March 1, 2018. This report includes questions asked to 3,028 Canadians, of which 687 are millennials, who have received or anticipate receiving an inheritance in the future.
- TD Ameritrade, “Financially Optimistic Millennials Aspire to be Millionaires, Retire Early” June 11, 2018. www.amtd.com/newsroom/press-releases/press-release-details/2018/Financially-Optimistic-Millennials-Aspire-to-be-Millionaires-Retire-Early/default.aspx Accessed November 6, 2018.↩
- Accenture, “The Greater Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth” June 2012 www.accenture.com/ca-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Industries_5/Accenture-CMAWAMSWealth-Transfer-Final-June2012Web-Version.pdf Accessed November 6, 2018↩
- TD, “Double or Nothing: Are Millennials Gambling with their Financial Future?” April 14, 2018. http://td.mediaroom.com/20180814Double-or-Nothing-Are-Millennials-Gambling-with-their-Financial-Future Accessed October 10, 2018.↩