Give Now, Not Later

A few months ago I tweeted the following that started a debate on Twitter:

If you are going to help your children financially, it’s far better to do it when they are younger, not older.

Most people would prefer an extra $100,000 in their 30s over an extra $400,000 in their 50s.

My thinking has evolved on this over the years especially after reading Die with Zero by Bill Perkins. Perkins argues that too many people end up providing an inheritance to their children too late in life. This is precisely when that money is the least impactful. As he wrote in Die with Zero:

In short, by giving the money to my kids and other people at a time when it can have the greatest impact on their lives, I’m making it their money, not mine.

I’ve done Twitter polls on this topic a few times in the past and have found a similar result. Let’s look at what the data tells us.

When Do People Want Their Inheritance (And When Do They Get It)?

When you ask people whether they would prefer $250,000 at age 30, $500,000 at age 40, or $1 million at age 50, people overwhelming wanted the lower amount earlier in life. 70% of respondents who answered this question chose $250k at age 30.

This was true despite the fact that the later amounts are equivalent to the earlier amounts compounded at a 7% annual inflation-adjusted return. In other words, $250k compounded at 7% per year for 10 years would become $500k, and $500k compounded at 7% per year for 10 years would become $1 million. So even when we guarantee a 7% inflation-adjusted return for two decades (the same long-term historical return as U.S. stocks), most people would still prefer the smaller amount of money while younger! 

Unfortunately, while many people want financial support earlier in life, the data suggests that they tend to receive it much later. As researchers at the University of Pennsylvania calculated, the age range at which someone is most likely to receive an inheritance is 56-65. This is also the age where the size of inheritances tend to peak. Based on the UPenn research, younger people who receive an inheritance typically receive less than older people who get an inheritance:

This makes sense as younger people are more likely to be receiving an inheritance from a grandparent (or a much younger parent) than someone who is older.

But age isn’t the only factor that impacts inheritance size, so does income. When we break out those who receive an inheritance by their income percentile, we see that those with higher incomes tend to receive larger inheritances. This is especially true near the very top of the income spectrum:

Since higher earning individuals are more likely to come from wealthier families, it makes sense as to why they tend to receive larger inheritances.

Both age and income are positively correlated with inheritance size. This makes sense given that both age and income are positively correlated with overall wealth. Older individuals and individuals with higher incomes tend to have more wealth. We can see this clearly if we break out the average inheritance size (for those that receive inheritances) by age and income at the same time:

When we control for both factors, it’s quite clear that the biggest inheritances go to the oldest, highest income individuals.

This is in direct contrast with peoples’ preference to receive their inheritance earlier in time. To make matters worse, the average age at which someone receives an inheritance has been increasing over time. In 1989, the average age of inheritance was 41 and today it’s around 51.

Do you want to contribute more to this trend? Or do you want to provide financial support to your children precisely when it can have the greatest impact?

It’s not an easy question to answer. There are both financial and non-financial reasons why people don’t want to give earlier.

On the financial side, some are afraid of running out of money. If you don’t have a lot, then you can’t give a lot. But, for those with a considerable nest egg, it’s easy to think otherwise. There are no shortage of scenarios you can come up with where you’d need more money.

But what about the scenarios where you need less? What if you end up with more than you expected? As Michael Kitces demonstrated, a retiree is more likely to end up with 4x their starting retirement balance after 30 years than below where they started. Few plan for this. And even fewer plan for how to give it away once it occurs.

Of course, there are non-financial reasons to withhold early support. Some don’t want their children to develop financial dependence. Others want their offspring to build their own life. Both are fair arguments. On the other hand, not providing financial support when you are able to can breed resentment. Unfortunately, there are no easy answers.

What I do know is that, when I have children (not yet but getting there), I plan on providing financial support throughout their lives. I want to help them in all the ways that I can. I want to teach them and guide them and ensure that they have great life experiences.

Of course, providing such support isn’t fair. Then again, what is? It’s not fair that some are born richer. It’s not fair that some are born smarter. It’s not fair that some are born taller or more attractive. But, I can’t do anything about that. Neither can you. All we can do is provide the best support we can in a way that allows our offspring to develop into thriving adults.

What Are the Best Ways to Give?

When we discuss providing financial support to children, we don’t just mean straight up cash transfers. Though you can provide up to $19,000 per year to each of your children tax-free (as of 2025), there are other options at your disposal. For example, consider the following:

• Paying for Education: One of the most common ways to give to your children is to pay for their education. This is typically done so that your children don’t start their adult lives in debt. Whether it’s college, a trade school, or specialized learning, there are many ways to invest in your children’s education and their future earning power.
• Downpayment Assistance: Given the soaring cost of housing, downpayment assistance has never been more needed by young people. Helping your children to buy their first home and start building wealth is something that not only helps them financially, but can provide a firm foundation for their future.
• Helping with Family Planning: Whether we are discussing weddings or grandchildren, helping your children with family planning is the best way to invest in your family’s future. Such investments can help your children select better schools (for their children) or even live closer to you, if that’s preferable. While family planning needs can be large expenses, they are also some of the most memorable.
• Going on More Family Vacations: In addition to providing for the major milestones in your child’s life, spending more time with them no matter what stage they are at can also be extremely rewarding. I’ve obviously only experienced this from the child’s perspective, but my family vacations are some of my most cherished memories today.
• Gift Beyond the Annual Exclusion: While the IRS allows you to gift $19,000 per child per year tax-free, technically you can gift far more than this without paying federal taxes. The catch is that any gift above $19,000 counts against your lifetime gift limit, which is $13.99 million (as of 2025). In other words, you can give away $13.99 million across your lifetime without having to pay the federal gift tax. Anytime you give a gift greater than $19,000, you just have to file Form 709 and record this amount against your lifetime limit. So if you gave $1 million in 2024, you could still give another $12.99 million before you died. More importantly, that $13.99 million limit is per individual. So you and your spouse could give nearly $28 million in total throughout your lives before federal gift taxes kick in.

No matter how you decide to support your children financially, the key is timing. These early investments during pivotal moments can have exponentially more impact than larger sums provided later in life. When you give early, you’re not just transferring your wealth, you’re giving your children the opportunity to build fuller lives that you can watch unfold. And that just might be the greatest gift of all.

If you’re interested in reading more about this issue, I highly recommend Die with Zero. While I don’t agree with everything Perkins says, I believe that his philosophy is directionally accurate and better than the default advice (i.e., pass on all your assets at death).

Happy giving and thank you for reading!

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This is post 447. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data