Young Canadians Need Inheritance
More than half of Canadians 18 to 34 say they need an inheritance or windfall to reach their financial goals, says an Edward Jones survey. It focused on wealth transfers – either giving or receiving – since the start of the pandemic in March 2020, and found 25 per cent of 18 to 34s doing so compared to the 14 per cent national average. This was not one way, however, as 14 per cent of these younger Canadians initiated a wealth transfer compared to just one per cent of 35- to 54-year-olds and four per cent of over 55s. "We've all heard about the ‘bank of mom and dad’ supporting the younger generation through wealth transfer, but our data demonstrates a strong willingness from the younger generation to return the favour," says Julie Petrera, senior strategist, client needs, at Edward Jones. The reason for wealth transfers varies by age group with death of family member or friend most likely among 35 to 54s (51 per cent) and over 55s (63 per cent). For the under 35s, wealth transfers are more likely to be for more immediate needs or life events such as loss of job, unforeseen expenses, the rising cost of living, a major purchase, or a milestone life event such as a graduation, birthday, or becoming a parent. The survey also found that 54 per cent of respondents want to share their wealth before they die to ensure distribution without conflict (34 per cent) or give a friend or family member immediate financial help (27 per cent). Last year, 65 per cent wanted to pass on an inheritance before they’re gone. The significant drop is likely due to inflation concerns with 45 per cent saying that sharing their wealth while they are living may risk their future finances. Others are holding back from giving while they’re living because of tax implications (19 per cent), because there is no immediate need (18 per cent), or because they don’t think their recipients deserve it!