Oct 19, 2023
The Rolling Stones just released an album and are about to go on tour. But Mick Jagger refuses to sell the band’s catalog of music just so his kids can inherit more money.
“The children don’t need $500 million to live well,” the octogenarian said of his eight offspring in an interview with the Wall Street Journal (WSJ). “Come on.”
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According to a report from WealthEngine and real estate firm Coldwell Banker, millennials are set to inherit approximately a total of $68 trillion from their baby boomer parents and will hold five times as much wealth as they have now by 2030.
This phenomenon — dubbed the “Great Transfer of Wealth” by the report — may have you thinking about your own estate planning.
It may sound selfish to forgo leaving money to your children, but here are three reasons to consider doing it.
Teach your kids a work ethic
“You Can’t Always Get What You Want” isn’t just an excellent Stones song, but an important life lesson for your kids.
There’s a good chance that you built up your wealth by working hard and facing adversity. Wouldn’t you want your children to learn the same skills to help them succeed in their lives? By giving them endless amounts of money, that may not be possible.
Jagger isn’t the only celebrity parent to feel this way. From Sting to Gene Simmons, many famous parents don’t want their kids to lead lives of leisure and decided to limit their inheritance.
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With roughly 45% of American parents cover their kids’ bills, take it from personal finance personality Suze Orman who says it’s time for many parents to tell their kids “I am no longer your bank account.” She tells them it will benefit everyone to prioritize saving for retirement instead.
One way to offload your kids from your expenses is by teaching them how to [automate their savings with easy-to-use apps. This way, they can build up their own nest egg, rather than relying on your inheritance or financial help. With technology, it’s easier than ever to get your kids to automatically transfer a portion of their paycheck to an investment or savings account.
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Make a bigger impact on the world
Jagger told the WSJ that he could give his kids more money, but he’d rather use it to “do some good in the world.” – and he’s not the only one. Bill Gates, Warren Buffet and Mark Zuckerberg have all said that they want to donate most of their money to charity rather than their kids.
The billionaires use the same rationale: their kids have enough privilege and resources, and don’t need the funds.
This is in line with the data. If you have enough money to leave a large inheritance to your kids, there’s a good chance that you’re part of the ultra-wealthy, according to Forbes. “Ultra-wealthy” means that your net worth is higher than $30 million. But it’s the ultra-ultra-wealthy – those with a net worth of $100 million or more – where inherited wealth is the most concentrated.
All these wealthy celebrities want to give their money to people who don’t have the same privileges as their kids, like the health initiatives that Zuckerberg pours millions into.
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Once you set yourself up for your dream retirement, you can still leave behind a legacy you can be proud of. Then you can talk to your financial adviser about everything that goes into leaving money to the charitable causes that mean the most to you.
Enjoy your life
Though he recently celebrated an 80th birthday, Jagger’s not planning on ending his career any time soon. He told the WSJ that he has even more songs he wants to release.
Jagger may be an octogenarian, but his life philosophy aligns more with that of many Gen Z Americans. The young generation is foregoing retirement saving in order to invest in themselves. That means spending money on their education, experiences or things that will be a good long-term investment.
Even if you decide to use your kids’ inheritance for your retirement fun, it’s still good to plan it out. Add in a “fun budget” into your retirement savings so that you can travel, read and garden at your leisure. To help with budgeting in retirement – for both expenses and fun – you can use the classic 4% rule: plan to withdraw 4% of your assets every year in retirement.. Though Suze Orman may not agree with rule creator Bill Bengen on the withdrawal rate, it’s still a good way to get started on planning for the retirement you want.
If you aren’t sure about your retirement investments or budget, it could be worth finding a financial adviser who can help you hammer out a plan that suits your needs.
By putting some of your focus on yourself instead of just your kids, you can get some satisfaction out of your golden years – just follow Mick Jagger’s lead.
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Sabina Wex is a writer and podcast producer in Toronto. Her work has appeared in Business Insider, Fast Company, CBC and more.
