How do inheritances affect the National Retirement Risk Index?

Abstract

The brief's key findings are: (1) Taking away inheritances from households that have them reduces the NRRI by less than one percentage point. (2) Inheritances could become more prevalent in the future due to unspent 401(k) balances, but increasing future inheritances has only a minimal effect. (3) The reasons for the modest impact are: (a) the majority of households do not get an inheritance under either scenario; (b) for those who receive an inheritance, the amounts are relatively small; and (c) 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." (4) If the analysis is limited only to households with inheritances, the impact on the percentage at risk is more substantial.