Northwestern Mutual’s 2025 Planning & Progress Study Found That 69% of Millennials Say an Inheritance Is Critical to Their Retirement

Northwestern Mutual’s 2025 Planning & Progress Study turned up a number that should worry everyone who watches household balance sheets. 69% of millennials say an inheritance is critical or highly critical to their long-term financial security or retirement. An entire generation is quietly counting on money from someone else’s estate to make its retirement math work. The trouble is that the money may never arrive in amounts anywhere close to those assumed, and the cost of being wrong compounds over decades.

The gap defines the story. Only 26% of millennials actually expect to receive an inheritance, and even that figure has been falling. Just 20% of U.S. adults overall expect to receive an inheritance in 2025, down from 25% in 2024, while millennials dropped from 32% to 26% year-over-year. So roughly seven in ten millennials describe an inheritance as essential, but fewer than three in ten think one is actually coming. The rest are planning around a transfer they have not been told to expect.

Why The Bet Looks Necessary

The dependency did not appear in a vacuum. The personal savings rate has drifted from 6.2% in the first quarter of 2024 to 4.0% in the first quarter of 2026, even as per capita disposable personal income rose from $63,638 to $68,617 over the same period, which means households were earning more but setting aside a smaller share of it as the pressure of day‑to‑day spending absorbed the difference. Inflation has played a central role in that squeeze.

Headline PCE inflation reached 3.5% year over year in March 2026, up from 2.36% a year earlier, and energy prices climbed 14.43% over the same stretch, while the Consumer Price Index stood at 330.3 in March 2026, a level that sits near the upper end of its recent range. Average hourly earnings reached $37.41 in April 2026, yet the raises have not kept pace with the bills, leaving families with income that feels steady and jobs that feel secure, but with a noticeably thinner cushion beneath them. It is exactly the kind of environment in which multi‑generational planning shifts from an abstract idea to something that feels necessary.

The Money May Not Arrive

The Northwestern Mutual data does not suggest that every family will execute the handoff perfectly. What it captures is a clear behavioral shift, and that shift deserves attention. Two practical steps follow from the findings.

First, for households without a will or trust, the intent‑to‑execution gap in Gen X and Boomer families stands out as the largest vulnerability in the entire report. For families who already meet with an advisor each year, the 77% comfort level indicates that the cultural barrier to bringing the next generation into the room has largely faded, leaving the invitation as the only step left.

Generational wealth, when it works, begins as a conversation long before it becomes a transfer, and the data shows that most American parents already understand that. What remains is procedural, and that is a far better problem to solve than the one families faced a generation ago.

What The Bet Costs If It Fails

The financial cost of mispricing an inheritance is not abstract. A 35-year-old who assumes a $200,000 transfer at age 60 and therefore underfunds retirement by $300 a month gives up roughly $250,000 in compounded savings by age 65 at a 7% return. If the inheritance arrives smaller, later, or not at all, the resulting savings shortfall lands in the years when it is hardest to fix, since contributions made later in a career have less time to compound.

Consumer sentiment suggests households already sense the squeeze. The University of Michigan Consumer Sentiment Index sat at 49.8 in April 2026, in pessimistic territory and approaching the recessionary threshold of 60. The federal funds rate has fallen to 3.75% as of May 11, 2026, down 0.75 percentage points from a year earlier, but borrowing costs on student loans, mortgages, and credit cards remain elevated relative to the decade before the pandemic.

Implications

Two implications follow from the data. Households that treat any expected inheritance as a bonus in their retirement projections give themselves a margin of safety if the transfer arrives later or proves smaller than hoped. Families that do intend to leave money, on the other hand, face a gap between intent and execution that can be closed through a will, a beneficiary review, and a family conversation.

Among those planning to leave an inheritance, 74% of millennials describe it as their single most important or very important financial goal, compared with 47% of boomers and older adults, which means the generation most dependent on inheritances is also the one most determined to provide them. Whether those intentions ultimately meet in practice is the question the next twenty years will answer.