How to manage ‘giving while living’ without endangering your own retirement Amy Allen’s estate plan isn’t focused only on where her money will go when she dies. The Georgia mom wants to put some of it to work now. Her 21-year-old son is getting married soon, and Allen and her husband plan to give him cash toward the purchase of a house.
Although leaving bread when you’re dead gets most of the attention, baby boomers, Generation X and financial advisers could look at a more helpful, immediate alternative: giving while living. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it. I would like to receive updates and special offers from Dow Jones and affiliates.
I can unsubscribe at any time. Roughly $79 trillion is expected to transfer from boomers to their heirs by 2048, according to Cerulli Associates, an asset-management research firm. You may have heard of this phenomenon, known as the “great wealth transfer.” Instead of waiting until death to leave your loved ones money, giving while living lets you help your adult children and grandchildren financially now, or in the near future, when they could truly use the assistance.
Any money left over can become an inheritance one day. Yet in a 2024Charles Schwab survey, 45% of boomers with $1 million or more in investible assets said they want to enjoy their money for themselves while they’re still alive. That could disappoint many millennial and Gen Z adult kids.
A recentKiplinger-Morning Consult survey found nearly twice as many adult children preferred that their parents help them financially now rather than giving them a larger inheritance later. There are plenty of reasons so many people could use immediate, tax-free gifts from their boomer and Gen X parents. The median net worth for people in their 30s is $28,616, according to Empower, and their median liquid savings is $7,000, according to the Federal Reserve.
Steep housing prices and mortgage rates have put homes out of reach for many young adults. College tuition is also through the roof and expected to continue rising, putting some 43 million Americans in debt for an education. Giving while living might help your adult children to afford a home, be it a house or an apartment, or to stay afloat after a job loss.
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