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Many boomers favor comfortable retirement over leaving wealth to heirs


Dow Jones Newswires
Published on: 12/11/07

New York — The greatest transfer of wealth in history may end up leaving heirs disappointed — and could mean big changes for financial advisers. As "mass-affluent" boomer millionaires, or baby boomers worth around a few million  dollars, start to turn 65, forecasts and patterns in their retirement planning suggest that many may leave little or no substantial wealth to their children.

The affluent boomer crowd typically has plans for a fully funded dream retirement that lasts two decades or more. Having bankrolled kids through years of education and early adulthood, these boomers feel less than obligated to pass along to their children much of their hard-earned wealth.

For those clients who do want to leave a sizable inheritance, financial advisers may need to lay out for them the difficulty of both living an active and exciting retirement, and also leaving wealth to their children.

"Invariably, their reach exceeds their grasp," says Milo Benningfield, founding principal of Benningfield Financial Advisors.

Simply having enough money to make it through retirement can be a challenge. Joe Montgomery, a managing director of investments at Wachovia Securities, a unit of Wachovia Corp., recently had to tell a client that his assets didn’t match his dreams of an imminent retirement; as Montgomery phrased it: "I don’t think this dog hunts."

Adding to advisers’ challenge, converting clients’ children into a new-generation clientele may be more about capturing relationships — for when Boomers’ children accumulate wealth of their own — than capturing actual assets.

While most of these clients are still years from retiring, by most definitions, the first members of America’s enormous postwar population boom are now reaching age 65.

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