- Only 3 in 10 people ages 65 to 75 prioritize leaving money for heirs, according to a PNC Financial Services Group survey.
- Peace of mind and enjoying life are primary objectives, the survey says.
Surprise! Leaving behind a pile of cash for heirs isn't a top priority for most baby boomers.
Those were the findings from a recent survey by The PNC Financial Services Group. The bank polled 492 individuals ages 25 to 75 in August. Participants had at least $50,000 in investible assets, excluding their workplace retirement plans.
Of respondents ages 65 to 75, only about 3 in 10 cited "leaving money for my loved one" as one of their top life goals.
"When you dig into how they spend money, they're not really focused on leaving it to heirs," said Rich Ramassini, director of strategy for PNC Investments.
With the estate tax exclusion at $5.49 million for individuals — and the proposed GOP tax bill would double that amount — boomers' priorities may be changing: Rather than devoting time to estate planning and sheltering assets from taxes, they would rather enjoy their money now.
"The more that estate tax exclusion goes up, the more it changes the discussion of intergenerational wealth transfer," said Ramassini. "It becomes a conversation of different desires in retirement and not just tax efficiency."
Here's what boomers are prioritizing over leaving large estates to their heirs.
Having "peace of mind" was the most popular goal for the 65- to 75-year-old group: Nearly half said they want to enjoy comfort and financial security in their later years.
The second most popular goal was "enjoying life," with 46 percent.
Rounding out the top three retirement objectives was "travel somewhere."
Having fun isn't the first thing that comes to mind when preparing for life after the 9-to-5 routine, yet there are benefits to accommodating this and other "soft goals" into your retirement planning.
"We can't underestimate the significant impact emotions play in the decision-making process," said Ramassini.
"We tend to compartmentalize money in our minds," he said. "When people sit down and plan their retirement goals, it spurs action."
Ramassini had three suggestions for savers who want to reach retirement with sufficient cash.
Formally set your goals. Retirement is the end goal for many, but you need to clearly define what you hope to achieve once you get there so that you have a destination in mind. Be specific: For instance, aim to save a particular amount or pay off a debt.
Create a plan. Don't just fly by the seat of your pants. Think about what changes you'll need to make to your spending in order to accomplish your savings goals.
Take action and check in. Commit to your plan and make sure that you monitor your progress. "When people have a plan, they're more nimble when obstacles present themselves," said Ramassini.
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