How Do Inheritances Affect the National Retirement Risk Index?


The brief’s key findings are:

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