New paper: “How Do Inheritances Affect the National Retirement Risk Index?”

The Center for Retirement Research at Boston College has released a new Issue in Brief:

“How Do Inheritances Affect the National Retirement Risk Index?”

by Alicia H. Munnell, Wenliang Hou, and Anthony Webb

The brief’s key findings are:

• Taking away inheritances from households that have them reduces the NRRI by less than one percentage point.
• Inheritances could become more prevalent in the future due to unspent 401(k) balances, but increasing future inheritances has only a minimal effect.
• The reasons for the modest impact are:
  • the majority of households do not get an inheritance under either scenario;
  • for those who receive an inheritance, the amounts are relatively small; and
  • many with inheritances in the two scenarios are already well prepared, so either taking away or adding an inheritance does not put them “at risk.”
• If the analysis is limited only to households with inheritances, the impact on the percentage at risk is more substantial.

This brief is available here.