Dad, where’s my inheritance?

0:01Noel King:The baby boomers are the wealthiest generation to ever live. They have around$90 trillion in assets. You know the story. They bought houses relatively cheaply. College wasn't so expensive for them. The stock market did huge returns in their lifetime. So boomers will leave trillions of dollars to their kids when they die. But their kids, the millennials and the Gen X's and Z's, are wondering, should we have to wait until they die? I always feel bad for thinking it, but when I watch my mom buy a million dollar home while my car is falling apart Flintstone style, it's really hard not to think. I would enjoy a little bit more support than being told everything works out and comes together in the end.

0:43We're struggling to even afford a pretty crappy house in Philly. Meanwhile, our parents are 100 percent hoarding wealth.

0:52Noel King:Coming up on Today Explained from Vox. Inheritance now.

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2:09Noel King:Today Explained, Noel King here. So I asked you to give me a call if you have thoughts about getting your inheritance before your parents pass. I thought we would get five or ten calls. I looked this morning and I stopped counting at 60. Y 'all have thoughts? We need that money now. There's a level of shame to it. I can't believe people still get inheritances. Baby boomer parents beware. They don't even understand the struggle. So we called some of you back. Mike Kintz is 36 years old. He lives in Evanston, Illinois. All right, so the question, Mike, is why do you want your inheritance now? I mean, take a look around.

2:49There's a variety of reasons. We are comfortable and not wanting, but it is much like if something were to happen, like my wife, her car is probably going to need to get replaced here soon. That's going to kind of replace the car that I literally just paid off after about seven years of paying it. If something goes wrong with my car and she has something happen to her car or needs a new car, it's like, OK, now those finances are strained even further. and you try to save, you try to put money into your 401k, you have insurance that you have to pay. We don't have kids, thankfully. Like, I don't even like saying thankfully because it sucks that that is one of the thoughts that we have to have is, do we get a house that we can try to afford or do we have a child and kind of like live in a cramped situation or not live as comfortably or not be able to go do the things we enjoy?

3:41So I think that was like the main kind a catalyst for this.

3:46Noel King:It sounds to me like you are aware that your dad does have some money that he intends for you to inherit. Do you know how much money it is? I thought I did. Oh, yeah. He actually ended up bringing it up at some point and said it was$250 ,000 is what I thought it was. But he's cagey. And I'm like, well, why can't I know you've been holding this like over me for my whole life that you've been putting away this this sum for me, but I can't have it. What doesn't your dad understand about the economy that you and your wife are dealing with? I don't totally know because he is living in it. For instance, he's 77.

4:30As he's getting older, he lives alone. He was starting to kind of feel out like, okay, maybe I need to live with you. What if we bought a place together that had, you know, like an in-law suite or like an apartment in the lower level, I will help pay for it. I said, okay. And then he and I started looking at places. He had a couple of neighborhoods in the city that he had picked out. And then he goes, well, this house is $700 ,000? And I go, yeah. And you need to put work into it too, which is going to be... I don't even know how much more, because you don't know until you really get in there.

5:09And he was like, I can't believe that. And I go, why do you think I haven't bought a house yet? Like, he was baffled by the fact that we hadn't found a place. I'm like, it's insane what you have to make now just to get a house. He hears and feels and sees all these things, but just doesn't want to, I guess, find that reality of, that that reality exists for me as well.

5:36Noel King:Let's talk about the conversation. I'm going to be your dad. Let's say you have 60 seconds, Michael. Tell me why I should give you this 250 grand plus now. All right. Well, dad, you've been telling me this has been mine for my whole life. And I would like to see how this could grow and help affect change in my life in a positive manner. And I would like to not have to wait for you to pass away and have this sad moment be the reason that I get this. And I'd like for you to see the benefit of it by making a solid investment. I don't even need the whole thing to be able to, like, for instance, buy a house or put it into an account that sets us up, my wife and I, for the long term in the now versus waiting to see what world we're entering into where we don't even know if this is going to be enough to make a dent in any type of life that we may have in 10 to 20 years when you possibly pass then.

6:37Noel King:Mike, I'm going to give it to you. I am not your dad, but here's my advice to you, my friend. I think you should let your dad listen to this interview. What do you think? Like, man, I may.

6:50To other people, I know it may come off like, oh, you have a household income of over$100 ,000 and you're whining and moaning about not getting daddy's inheritance. And it's like, yeah, but you live in this world and you see what's going on and we're just trying to improve it for ourselves. And I just feel like this is one of those things that is being withheld from a lot of people that doesn't feel like it's necessary to withhold.

7:20My name is Charlotte Coles, and I am a money columnist for New York Magazine's The Cut.

7:25Noel King:All right. So you recently wrote this piece about young people, millennials and Gen Z, who really wish their parents would give them money now instead of waiting until they pass and then leaving it as an inheritance. How hard was it for you to find millennials who were feeling some kind of way about their parents? Not hard at all. Really? Nope. There were many of them who were very game to talk. It was harder to find boomers. I think people don't want to be seen as stingy with their children. It's true that parents want to help. It also seems true that parents want to help without being asked.

8:09Noel King:Like, there's a sense that I have a responsibility to my child, and I am very happy to get them through college or get them through high school, whatever the case may be. But I want it to be my call. I want to be the one, right? I don't want my kid asking. I want to give before they can ask. Right. Yes, absolutely. I think that is very much true. I think that no parent wants their child to expect it. They want it to be a gift. And nothing negates the joy of giving a gift quite like having someone expect it. But I think that that is also really difficult for millennials if they're trying to plan for their own future.

8:51And if their parents are like, I don't know, maybe I'll help you with your house. Maybe I won't. Yeah. Then it's really difficult to know how to save for that.

9:02Noel King:There was another thing we heard much more frequently than I would have expected. And it comes down to how the boomers are actually handling the money that the millennials expect to inherit. So we heard things along the lines of, I know that my parents have money saved for me, but like it's sitting in an account. It's not invested. It's not earning any money. She's acted like this is so smart because she's not spent it, which of course is great. But like just a savings account would do better, yet alone someone who's younger who's struggling. Like this could help me now with things I'm struggling with or even be invested now if you think it must be invested, you know, until one day later.

9:38Noel King:And it raises the question, if the millennials feel like the boomers are not or maybe mismanaging the inheritance, do they have a right to, you know, say anything? Give mom and dad a note? Yeah, yeah. I think another thing that makes millennials a unique generation is that the market has done really well during our lifetime. And so as a result, millennials are much more investment savvy than previous generations. and previous generations also saw some really huge dips in the stock market. So I can understand why they might feel that the safest place to put it is the bank. For millennials, I mean, that's basically like giving money away, right?

10:26Like your money is just depreciating there in value. So, I mean, this really goes back to what I believe is the missing piece here, which is parents saying, hey, I've set aside some money for you. We should talk about it.

10:46Noel King:How much of the difficulty here did you find is about death? I've often wondered, like, what my life would be like once they pass. But that always gives me such a strong sense of guilt because I don't want my parents to die. I just want to be able to live a similar quality of life to what they were able to give me. No one wants to think about when they die. Yeah. And then to bring money into it. Like, so mom, someday you're going to be dead. And also, let's discuss finances. Totally. I mean, I think part of it is also bound up in retirement, too. And making the transition from living off of your income to living off of your wealth or your savings is also really scary for people.

11:35Like, they view their wealth as a finite source of income. And so the idea that they're now just, like, spending down this pot of money is really scary for a lot of people.

11:50Noel King:There was another person you interviewed. I think his name was Joe. And his particular thing was he was watching his parents in retirement spend a lot of money. Like, they were really living large. Tell me about him. Joe had asked his dad, who had also been an entrepreneur, for a loan to start a business. And he'd created a business plan. And he had asked his father for a specific loan and had a plan to pay it back. His father felt that his son really needed to figure it out on his own. Even though he could afford to give the loan, he declined. And this is the counter argument to giving your children money when you can afford it, or even lending them money.

12:32Some of the boomers who I spoke to felt that it would be robbing their children of the feeling of self-reliance. I think that they really wanted their children to have the experience of making it on their own rather than feeling like they had sort of piggybacked off of their parents' success.

12:52Noel King:There's a very tricky worldview problem happening here that I picked up in your article, which is no one's saying that the boomers didn't work hard. And I also get where they're coming from, which is like, it's really satisfying to be like, I pulled myself up by my bootstraps. And that generation famously did a lot of bootstrap pulling because the silent generation that came before them didn't do as great. It's that I think the millennials can say, we work hard, too. It's just that it gets you a different outcome these days. I don't understand how they want us and expect us to have a baby and buy a house when it's physically impossible.

13:33And I just feel like they don't even understand the struggle and they have no idea what they're actually asking of us. My mom will make all of these comments about like, you know, the state of the economy and, you know, oh, well, there's like the have and the have nots. And it's like, well, yeah, but it's that way because your generation has all the money. If there is one thing that I think all generations have in common, it is thinking that the subsequent generation has it easier than them. And thinking the next generation feels entitled and whiny. That is a universal experience. If you look at the data, there are some marked differences in the circumstances that millennials find themselves economically.

14:26But it's also a little bit apples to oranges. You know, there were some really adverse economic situations in the 70s and the 80s and the 90s as well. It's not that the boomers just had smooth sailing, like low mortgage rates and cheap housing and plentiful jobs. like throughout their adulthood either.

14:47Part of parenting is learning to watch your kids struggle without, you know, stepping in and bulldozing every obstacle. But at the same time, like most parents do want to help their children. They want their children to do well. They want their children to enjoy their lives. Because your child is an adult doesn't mean that you're not still family. And I think families help each other. That's part of what families do. So I think it would benefit all generations to be a little bit more open about their financial situations.

15:30Noel King:That was Charlotte Cole. She's the money columnist for New York magazine's The Cut. Coming up, brace yourselves, boomers. we have a reasoned argument that you should give it all away before you die.

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19:19Boomer.

19:23Boomer.

19:33Noel King:Boomer.

19:41Noel King:Today Explained is back with Bill Perkins. Bill wrote the provocatively titled Die With Zero, a book that argues in favor of giving your kids the inheritance while you're alive to watch them spend it. If you're going to leave money to your kids, you should be thinking about what's the right amount. That's probably the first thing that people think about. But one of the things that people don't think about is when is the right time? And I argue ferociously that it is not when you die. It is actually well before you die so that that gift makes the maximum impact on their lives. So you would be agreeing with the millennials that we've heard throughout our show who are feeling some kind of way about their parents sitting on the inheritance for now and waiting until they pass on.

20:25Noel King:You think that the youths have a point. Oh, yeah. I'm their best friend. I am definitely their best friend. When you leave an inheritance to someone, you're trying to have maximum impact on their lives so that they may be able to enjoy it. And that time is not at 86 or 60. The time that they can convert that capital into meaningful experiences at the greatest rate without that much decay is between 28 and 33. Why is that? What's happening between 28 and 33? The sharpest and the biggest calculator you will ever be is at 28. And you reach physical maturity at 33 and then it's plateaued and declined.

21:07And so what that means is, is that your mental acuity is declining and your physical abilities are declining at various rates, which means that your ability to convert that money into experiences that you enjoy or can do decline as you age. You know, most of your life is still ahead of you. At 60, most of your life is behind you.