Reply to NYT: 30 somethings still being bankrolled by their parents

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[quote=Anonymous][quote=Anonymous]I think the real story here is how well Boomers have done as a generation. I don't think the premise that previous generations were "emancipated" from their families because of some moral choice is right. Rich people gonna rich, and that means passing money to their children throughout their lives. It always has! There are just more of those families. These examples aren't of boomer parents eating canned soup so they can pay grandson's NYC private school tuition. These are boomer parents who can afford it.

Most of these examples are directly related to the tax code. If you are a rich boomer and you're trying to minimize your/your heirs tax burden, it makes sense to max out the cash gift every year (I think it's $14k?) and pay any tuition or medical expense you can, because it avoids the gift tax. I think the Times is really irresponsible for writing this story without pointing out the estate planning angle - not that it's not still a huge and arguably unfair boost for the millennials, but it is only logical that affluent boomers would do that. [/quote]

The current estate tax exemption is $22.8 million for a couple (and it's portable, so the last spouse to die can use the whole amount).  There aren't that many people who will exceed that. They're certainly out there, but as a percentage of the population, it's very small.   It may be that some are concerned that the exemption will be lowered (pretty sure it will be if the Dems take control of the Senate and White House), but I really think it's more that there are quite a few well-off people who are living longer, and who realize that the extra $$ can make a big difference in their kid's lives now vs. 20-30 years from now when they would otherwise inherit.  There are some tax advantages for a grandparent to put $$ in a 529, for example, but it's not huge, and I think the incentive is really to relieve financial stress for their kids while they're just getting established (vs. add to their retirement fund later).  [/quote]

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