For many Americans, the hope of receiving a significant inheritance from parents or relatives seems like a financial safety net.
However, the reality is that most people will never inherit any substantial wealth.
The Harsh Truth About Inheritances
While inheritances can be a major wealth booster for some individuals, particularly those who are older, white, college-educated, or already financially well-off, the majority of Americans do not receive such financial windfalls.
Research indicates that less than half of Americans inherit anything at all.
Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, highlights this disparity: “Most households will pass on little or no inheritance to the next generation.”
Data from the Federal Reserve Bank of Richmond supports this claim, showing that only about 30% of Americans between ages 47 and 70 have received any form of inheritance or wealth transfer. For younger adults, this figure drops below 20%.
The Prime Age for Inheritance
According to a study by the Wharton School at the University of Pennsylvania, the likelihood of inheriting peaks between the ages of 56 and 65, followed closely by those aged 46 to 55.
The Federal Survey of Consumer Finances, conducted every three years, confirms these trends.
On average, those who inherit receive around $266,000, according to a 2022 Washington Post report. However, factors such as race, education, and prior wealth significantly influence whether a person inherits anything at all.
Racial and Educational Disparities in Wealth Transfers
Inheritance is not distributed evenly across racial and educational lines. Data from the Richmond Fed shows that while 35% of older white households receive an inheritance, only 13% of Black households do.
The average inheritance for Black Americans is $154,260, compared to $303,100 for white Americans.
A major reason for this disparity is that Black families are less likely to have wills, as noted by the Center for Retirement Research at Boston College.
This contributes to the ongoing racial wealth gap, a persistent issue in the U.S.
Similarly, educational attainment plays a role in inheritance patterns. About 22% of older Americans with only a high school diploma receive an inheritance, compared to 39% of college graduates.
The Desire to Leave a Legacy
Despite the uneven distribution of inheritances, most Americans wish to leave something behind for their heirs.
A study from the Urban Institute found that nearly 60% of Americans hope to pass down a significant estate.
However, financial hurdles often make this difficult. Many families deplete their savings on long-term care expenses or fail to accumulate significant wealth due to economic hardships, making it impossible to leave a substantial inheritance.
“You can’t pass the wealth off if you don’t have the wealth in the first place,” says Michael Neal, a senior fellow at the Urban Institute.
Inheritance Favors the Wealthy
Inheritances tend to reinforce existing wealth inequalities. Research from Wharton found that the median inheritance across all income levels is $12,353 (in 2019 dollars).
However, for households in the top 5% of income earners, the average inheritance jumps to $51,499.
Estate tax policies have also played a role in widening wealth disparities. In 2008, estate taxes applied to inheritances as low as $2 million, but by 2017, the tax-free threshold had risen to $5.5 million.
The 2017 Tax Cuts and Jobs Act further increased this amount to $11.2 million, with the 2025 threshold nearing $14 million.
Because of these changes, fewer wealthy individuals pay estate taxes. The number of taxable estate returns plummeted from 15,100 in 2008 to just 4,000 in 2023, according to the Tax Policy Center.
Chuck Collins warns that this trend “will only accelerate existing wealth disparities, including the racial wealth divide.”
The Bottom Line
While inheritances are becoming more common, they remain out of reach for most Americans.
Wealth transfers disproportionately benefit those who are already financially secure, reinforcing economic and racial inequalities.
For those banking on an inheritance for retirement, it may be time to reconsider financial planning strategies.
For more details, read the full article on USA Today: https://www.usatoday.com/story/money/2025/03/13/inheritance-american-retirement-wealth-inequality/82265780007/.
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