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18% of Heirs Will Use Inheritance to Pay Off Debt

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Most Americans younger than 60 don’t expect to receive an inheritance, but for the 27% who do, many see it as a source of financial relief.

In a new Interest.com survey, only 3% of those who expect an inheritance say they will use it for a vacation, and another 3% said they will use it for “something special like jewelry or a luxury car.”

Others seem to be more reliant on the payout: 42% said they will invest in savings or a retirement account, 18% said they will use it for debt payments and 12% said it would help pay for education.

The survey questioned 1,005 American adults and was conducted Aug. 1 to 4 by Princeton Research Associates International. The margin of error is plus or minus 3.7 percentage points.

As far as how much people expect to gain, the most common answer (25%) is between $10,000 and $50,000. The runners up (at 22%) expect between $100,000 and $500,000, and 17% said they are looking to get between $50,000 and $100,000.

Furthermore, the survey categorized inheritance not only as cash, but also property or valuable possessions.

The average 401K is $80,000, according to Fidelity Investments, and the average consumer debt — including mortgage, bank card and auto loans — is $126,000, according to data from the Experian-Oliver Wyman Market Intelligence Report and Experian’s IntelliView tool.

With those facts and expectations mind, relying on a family member’s death to finance debts and retirement shouldn’t be the only plan for those anticipating an inheritance.

But some of the 67% of Americans younger than 60 may be in for a surprise. Of those surveyed ages 60 and older, 64% said they planned to leave an inheritance. Of that group, 22% said they planned to leave between $100,000 and $500,000 total.

Image: iStock

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