Generally speaking, their inheritors keep the funds in the market. If the Boomer has a significant amount in their 401K, a fiduciary is just going to tell the next of kin to keep it market, and most people fill out a Time of Death Beneficiary so the account just transfers over to their heirs. Unless they're in heavy debt or need a down-payment on a house, most people will just keep the account.
this post was submitted on 09 May 2024
34 points (97.2% liked)
No Stupid Questions
35807 readers
1886 users here now
No such thing. Ask away!
!nostupidquestions is a community dedicated to being helpful and answering each others' questions on various topics.
The rules for posting and commenting, besides the rules defined here for lemmy.world, are as follows:
Rules (interactive)
Rule 1- All posts must be legitimate questions. All post titles must include a question.
All posts must be legitimate questions, and all post titles must include a question. Questions that are joke or trolling questions, memes, song lyrics as title, etc. are not allowed here. See Rule 6 for all exceptions.
Rule 2- Your question subject cannot be illegal or NSFW material.
Your question subject cannot be illegal or NSFW material. You will be warned first, banned second.
Rule 3- Do not seek mental, medical and professional help here.
Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.
Rule 4- No self promotion or upvote-farming of any kind.
That's it.
Rule 5- No baiting or sealioning or promoting an agenda.
Questions which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.
Rule 6- Regarding META posts and joke questions.
Provided it is about the community itself, you may post non-question posts using the [META] tag on your post title.
On fridays, you are allowed to post meme and troll questions, on the condition that it's in text format only, and conforms with our other rules. These posts MUST include the [NSQ Friday] tag in their title.
If you post a serious question on friday and are looking only for legitimate answers, then please include the [Serious] tag on your post. Irrelevant replies will then be removed by moderators.
Rule 7- You can't intentionally annoy, mock, or harass other members.
If you intentionally annoy, mock, harass, or discriminate against any individual member, you will be removed.
Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.
Rule 8- All comments should try to stay relevant to their parent content.
Rule 9- Reposts from other platforms are not allowed.
Let everyone have their own content.
Rule 10- Majority of bots aren't allowed to participate here.
Credits
Our breathtaking icon was bestowed upon us by @Cevilia!
The greatest banner of all time: by @TheOneWithTheHair!
founded 1 year ago
MODERATORS
I highly disagree in the sense of most people. Everyone I have known in the situation have put it towards a house or it was so low they just took the cash for bills. I think most will keep it in investments if its quite substantial maybe but many people die having already had to sell off assets and reverse morgages and all kinds of things.
I mean, if the payout is so low that it's not worth keeping in the market, then it's not going to have much of an impact on the S&P 500. I'm sure many Millennials (focusing on them, since they're most likely to lose parents) will use the money for a down-payment on a home, but 52% of them already own homes, and many Boomers will be leaving behind their own homes, so it's safe to say substantially less than half of them will need to cash out their parents 401Ks for homes. Student loans will probably take up some of that money, but the average student loan debt is $32K, while the average boomer has about 200K in retirement savings, so even the student debt crisis isn't going to take that much money out of the market.
The real thing to watch is medical costs. Boomers are living longer while medical costs are skyrocketing, so it does seem that a lot of the wealth the Boomers accumulated is going to medical industry instead of Millennials. I don't know hoe that's going to impact the market though.
I think low payouts will though. its likely there will be thousands of low payout for every significant one. Its much more common. Some folks get into the lucky position where all said and done it cost them money or at least a lot of their time with nothing really to show for it. but your right its being pulled out of the market as the money is needed or even sooner in those cases. So it won't be a sudden it but more of a slow constant drain.
I would guess if anything rich people dying is good for the economy. Retired people are generally sitting on their assets in the form of homes they're not going to sell until they kick the can and retirement accounts in low risk investments. When they bite the dust all of those assets get swept into taxes and to their kids, who probably spend it or at least invest it in the market in a way that is more stimulating than what their parents were doing with it. Old people are stagnant and safe with their wealth which is not good for line goes up.
It's not so sudden that anything changes really. People die every day, it doesn't happen all at once.
Would all investments be liquidated rather than just inherited?