It's a dilemma for anyone who isn't part of the "me-generation." How do you balance between spending money now for your children and leaving them an inheritance later? I recently read about the Holocaust survivor Roman Blum, who left a fortunate to no one. According to the recent New York Times article, the New York man had an estate worth $40 million, but no heirs. I don't imagine I'll ever have $40 million to split between my two sons. However, I would like to be in the financial position to help them as young adults and to help their children and grandchildren.
Living on a budget
When I think about the different generations, the "Greatest Generation" seemed to me to be the most charitable. They lived below their means after surviving the Great Depression. My grandparents lived on a budget. They spent less money than they had. Experts say that generation left the greatest inheritance in recorded history. The benefactors of their hard-earned wealth were their children, the Baby Boomers or members of the "me-generation." It's not difficult for me to spend a little less now so I'll have more money later for my family.
Dying with no financial regrets
Evidently Blum didn't have any children. However, he could have left his estate to charitable organizations. Hearing about his situation motivated me to put together my will. I don't want to have any financial regrets when I die. I also made sure to get life insurance for my children and husband in case of an early demise.
Exiting with a zero balance
According to a recent article by the Los Angeles Times, you can't spell baby boomer without "me." And many people from the "me-generation" say they don't plan to leave their children any inheritance. In fact, some boomers say they hope to have a zero balance when they die. A recent U.S. Trust survey shows one quarter of boomers are afraid their children would become lazy with an inheritance. Since they labeled Generation X slackers decades ago, it doesn't surprise me that 1 in 5 baby boomers think their children will squander the money.
Maxing out a Roth IRA
We are saving money in a Roth IRA for retirement as well as to give our children a cash advance on their inheritance. We can give our children $10,000 each for their first home purchases out of our Roth IRA accounts without tax consequences, according to financial experts. By saving money in a Roth, we are thinking about ourselves and our children.
When it comes to the issue of leaving an inheritance, there seems to be a generational war brewing. On the one hand, the Baby Boomers didn't seem to have a problem taking their inheritances from their parents. However, many have the attitude that they should spoil themselves now and die broke. It doesn't seem that strategy is working too well since the elderly baby boomers now have the most debt of any other previous group of retired people. It's more likely Baby Boomers will rely on their children for money than the other way around. They already rely on Social Security more than they should.
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More from this contributor:
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