Three Papers on the Impact of a Financial Inheritance

This dissertation explores the multifaceted impacts of financial inheritances on older adults using data from the Health and Retirement Study (HRS) over five waves (2010-2018). It includes three studies employing cross-sectional and panel analyses with a fixed effects model. The first study examines the effect of inheritances on financial strain among older adults, revealing that while inheritances can alleviate financial strain by increasing overall wealth, they may initially increase strain due to the loss of a financially supportive loved one. These findings underscore the importance of retaining wealth over merely receiving an inheritance, suggesting a need for tailored financial products and comprehensive estate planning. The second study uses Terror Management Theory to explore how inheritances impact wealth change. Findings suggest that mortality salience may lead individuals to spend inheritances quickly, indicating the need for personalized financial strategies to address economic and psychological needs. The third study compares inheritances with other windfalls on charitable giving, finding that financial windfalls, including inheritances, generally boost charitable donations. However, further research is needed to understand the nuanced relationships and mechanisms behind these donation decisions. Overall, these studies provide a comprehensive understanding of the effects of financial inheritances and offer practical insights for financial planning, estate management, and charitable giving strategies.