The Rise of “Old-Old Inheritance” in Japan: Over Half of Heirs Are Aged 60 and Above

In Japan, the phenomenon of “old-old inheritance,” where elderly individuals inherit wealth from other elderly individuals, is on the rise. As life expectancy continues to exceed 80 years,

In Japan, the phenomenon of “old-old inheritance,” where elderly individuals inherit wealth from other elderly individuals, is on the rise. As life expectancy continues to exceed 80 years, both heirs and testators are increasingly becoming part of the older demographic. This trend raises concerns about the potential economic implications of wealth remaining stagnant within older households.

According to an analysis by the Nikkei newspaper, based on the 2024 Economic and Fiscal White Paper released by the Japanese Cabinet Office, as of 2022, 52.1% of those who inherited wealth were aged 60 or older. This statistic reveals that more than half of heirs are receiving assets in their sixties or beyond. In comparison, 27% of heirs are in their fifties, while those under 49 years old make up 20.6%.

Furthermore, the percentage of deceased individuals who were aged 80 or older was reported to be 70% in 2019, marking an increase of 1.8 times compared to 30 years ago. This trend is partly attributed to the desire to secure financial support for children or grandchildren in the face of uncertain economic prospects, as well as the increasingly prolonged life expectancy.

Older households tend to save more and spend less. According to the 2023 Household Survey conducted by the Ministry of Internal Affairs and Communications, the average monthly consumption of households led by individuals aged 70 and older was approximately 249,177 yen (about $2,250), which is about 40,000 yen (around $360) lower than the average for all generations. Additionally, the savings balance for those in their seventies saw an increase rate of 3.8%, significantly higher than the overall average of 0.2%.

The Nikkei newspaper highlighted the importance of addressing the risks associated with prolonged wealth retention among the elderly. It cautioned that as the trend of old-old inheritance becomes more entrenched with advancing aging, household wealth may remain concentrated within older demographics, potentially hindering broader economic utilization.

As of 2023, the average life expectancy in Japan stands at 87.14 years for women and 81.09 years for men. The Bank of Japan (BOJ) reported that over 60% of household financial assets, approximately 2000 trillion yen, are concentrated among the elderly. In 2022, the government of Prime Minister Fumio Kishida initiated tax reforms aimed at facilitating the transfer of substantial assets from the older generation to younger individuals, a policy referred to as “wealth rejuvenation.”

The increasing trend of old-old inheritance in Japan signals a significant demographic shift with potential economic implications. As wealth remains largely within the older generation, it raises questions about how best to stimulate economic activity and ensure that financial resources are effectively utilized across all age groups. Addressing this challenge will be essential for fostering sustainable economic growth in the face of an aging population.