Naturally, this has implications for the younger generation and many Millennials today are confident that they’ll pick up a share of the spoils in the form of generous inheritance payments. Indeed, a recent survey by wealth manager Charles Stanley revealed that, on average, Millennials expect to receive an inheritance of nearly £130,000 each. But are young people actually likely to receive that kind of windfall? Let’s take a closer look at Charles Stanley’s study.

Way off the mark

While inheritance tax receipts are hitting record highs today, the bad news for Millennials is that their inheritance expectations are way off the mark, according to this study. For example, while young people are expecting to receive nearly £130,000 each from inheritance payments, the median amount handed down is currently only around £11,000. Moreover, while one in seven Millennials expects to inherit money before the age of 35, in reality, the typical inheritance age these days is between 55 and 64 because people are living longer.

Relying on an inheritance is risky

What these findings suggest is that relying on an inheritance payment to achieve your financial goals probably isn’t the smartest financial strategy. “People are living longer than ever, so relying on an inheritance to get on the housing ladder is a risky strategy as you may get less, and much later than planned,” said Charles Stanley’s John Porteous.

The smart strategy

The bottom line for Millennials is when it comes to achieving financial goals, saving and investing regularly remains the smartest strategy. Whether your goal is saving up for a house, or a building up a huge retirement savings pot, there really is no substitute for a regular savings and investment plan in which you tuck away a proportion of your income and invest the money in assets that boost your wealth over time.

One thing it’s important to realise in this regard is that you don’t need to have a lot of money or be earning a lot to start building up your wealth. For example, with Hargreaves Lansdown, you can start investing in funds with just £100. You can also set up a monthly direct debit investment plan from just £25 per month which is less than most people pay for their monthly phone bill.

The key, however, as with many things in life, is to get started sooner rather than later. The later you leave it to save and invest for the future, the less chance you have of achieving your financial goals.

The post Millennials think they’ll inherit £130,000 each. Is this accurate? appeared first on The Twelfth Magpie.

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Edward Sheldon owns shares in Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Basic facts

First, some facts to scare the life out of you. The full basic state pension is currently £119.30 per week. That works out as £6,203.60 a year. Do you fancy living on that for the last 30 years of your life? Worse, to achieve that princely sum you have to make 35 years of National Insurance contributions, otherwise you might get less.

Here’s another worrier. The age at which you can claim this money is set to rise and rise. By October 2020, it will synchronise at 66 for both men and women. It will hit 67 by 2028. Thereafter it will rise with our growing life expectancy, and at some point will fly past 70 and beyond.

The state you’re in

The state will only ever give you the most threadbare income, and you will have to wait longer and longer before you can claim it. If you want to retire some point in your life, you need to start saving under your own steam.

Last year, pension provider Royal London warned that British workers will have to carry on until age 81. Unless people start seriously saving, “we are witnessing the death of retirement”, it concluded. Do you really want to be working at such an illustrious age – out of financial necessity rather than choice? 

Invest, invest, invest

If you belong to a generous workplace pension scheme, then love, honour and obey it, and feed it. Make the maximum possible contributions, even if it hurts, and in return you will get an employer top up and tax relief. However, do not assume this is enough on its own: employees pay around just 5% of their salary into a pension, they need to be saving around 15%. You need to start investing off your own bat as well. If you do NOT belong to a company scheme, saving for your future is even more important.

The older generation used to envy the young, but no longer. Student debt, spiralling house prices, stagnating wages and zero hours contracts have ruined all the fun. More than 1m Britons now turn 40 with NOTHING saved for retirement, according to pension provider Zurich. Today, it rocks to be old, at least financially. 

Forget me not

I know that investing for retirement is just another demand on your pocket. But if you don’t start early you will squander the one thing in your favour: time is on your side. If you invest £1,000 at age 30 and it grows 5% a year it will be worth £6,081 by age 67. If you invest £1,000 at 50 and it grows at the same rate, you will have just £2,292. The first pound you invest is the most valuable of all.

So, millennials, prove me wrong. Start investing now. Otherwise, retirement? You can forget it. Sorry.

The post Sorry millennials, you’re never going to retire appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?