Byline: MICHAEL J. WEISS

Realistic or idealistic? In recent years, economic researchers have debated the amount of money Baby Boomers will inherit from their parents with an exuberance once reserved for Internet stock touts. At least $10 trillion over the next 55 years, proclaims one. No, $12 trillion over the next 20 years, insists another. Make that $136 trillion over 55 years, according to a third estimate. To a confounded public, the astronomical figures sound more like a debate involving Japanese yen than American greenbacks.

But now that the oldest Baby Boomers have turned 57 and are approaching retirement, this question is more pressing than ever. The answer will determine whether Boomers - the largest generation in U.S. history - can expect a cushy financial future or a bleak retirement. And lately, the economists' rosy estimates have wilted. A weak economy, a sputtering stock market and a Social Security system that may run dry are all fueling skepticism regarding the size of the transfer of wealth from Boomers' parents to their children. Since 2001, the stock market meltdown has erased some $8 trillion in shareholder wealth, slashing the net worth of Boomers' parents. Plus, Americans are living longer, to an all-time high of 77.2 years in 2001, and increasingly cracking their nest eggs to fund their own extended retirements. Then there's the sheer number of Baby Boomers, born between 1946 and 1964. There are 78 million of them, most with their hands outstretched for a bequest. "Boomers are too numerous to expect a windfall," says economist Laurence Kotlikoff at Boston University. "I'm sorry to burst anyone's bubble, but there's no economic justification for any bonanza inheritance."

Despite heated debate about the exact size of the bequest, there's universal agreement on one stark point: The vast majority of Boomers will never inherit a single dime. Less than 20 percent of them have received a bequest, according to the 1998 Survey of Consumer Finances (SCF), a poll of about 4,300 families conducted every three years by the Federal Reserve Board in Washington, D.C. And the average bequest was less than $50,000. Yet the staggering wealth of Boomers' parents means that, at the very least, $1 trillion will shift to their children in the next decade, influencing the economy and quality of life in America for years to come. It's no surprise, then, that a small army of lawyers, accountants and financial planners - as well as real estate brokers, travel agents and car salesmen - hope to profit from whatever wealth transfer does occur.

YOU CAN'T TAKE IT WITH YOU

The 50 million Americans born before 1945 - the so-called World War II Generation, or, in Tom Brokaw's words, the Greatest Generation - are the wealthiest batch of seniors in U.S. history, although they didn't start out that way. Their early years were shaped by the Great Depression, which gave them an inclination for thriftiness. Then their luck turned. For millions in the late 1940s and in the 1950s, the GI Bill was a ticket to college and middle-class status. Their work years coincided with a period of robust economic growth during the 1960s. Their home values increased during the 1970s, and they caught the updraft in stock prices through the 1980s and 1990s. Today's seniors enjoy full Social Security and Medicare benefits and receive the most generous pensions in the nation's history.

Consider this measure of the World War II Generation's wealth. Ken Dychtwald, president of Age Wave, Inc., a business development firm in Emeryville, Calif., reports that people over age 55 currently control nearly two-thirds of all the nation's financial assets. They own some 40 percent of all mutual funds, 60 percent of all annuities and 48 percent of all luxury cars.

But if seniors possess unprecedented wealth, they also face enormous expenses - that's one reason why it's hard to figure how much they'll pass on to future generations. The budgetary item eating into the size of inheritances more than any other is health care. Americans are living longer today than ever before, which also means they're spending more on medicine and medical procedures as they age. Some 40 percent of Americans over age 65 may spend time in a nursing home, and 75 percent will likely need some type of home care, reports the Health Insurance Association of America. The average cost of care in a nursing home: more than $52,000 annually.

"With every breakthrough in health care, the wealth transfer declines," says Russ Alan Prince, president of the market research firm Prince & Associates, in Shelton, Conn. "If everyone starts living to the age of 100, the money's gone."

Just as troubling, the recent stock market collapse has eroded seniors' wealth - at least on paper. Unless the market rebounds dramatically, seniors will have less to bequeath to their heirs. Baby Boomers can expect to receive 20 percent less in their inheritance than they would have gotten in 2000, projects Kotlikoff. Prince agrees. "In 1999, everyone was getting rich and ready to hand down fortunes," says Prince. "But a lot of people aren't rich anymore. Cisco has gone from $80 to $18. And Enron is no longer a good investment. A lot of people have less to leave their children."

Another inheritance wild card is what researchers delicately call a "declining bequest ethic." Think of the bumper sticker that declares, "Retired - Spending My Children's Inheritance." It's more than a slogan. Kotlikoff reports that the percentage of those older than 65 who say it's important to leave an inheritance dropped to 47 percent in 2000 from 56 percent in the early 1990s. Only 22 percent of people over 65 plan to make a significant bequest. Why? One explanation is that families these days are more geographically dispersed, stretching familial ties.

It seems that the psychology of inheritance is changing. As seniors live longer, they are more worried about running out of money. So they're keeping more for themselves and giving less away. Their heirs' expectations are changing too, says Larry Cohen, director of consumer financial decisions at SRI Consulting in Princeton, N.J. In a 2002 survey of 4,000 Americans, SRI found that Boomers are less likely to expect an inheritance than other age groups. "If you've got a vibrant, skiing Frank Lautenberg of a father," says Cohen, referring to the 79-year-old New Jersey senator, "you're probably not expecting an inheritance any time soon."

WHAT RETIREMENT NEST EGG?

Seeking insight into how Boomers envision their own retirement, the AARP surveyed 2,000 of them in 1998. The results support the stereotype of a selfish but optimistic generation. Comparing themselves to their parents, 75 percent admit they're more self-indulgent and 67 percent believe they'll live longer. Yet Boomers understand that their lifestyle comes at a price: 84 percent recognize that they have to make more money to fund their retirement. A whopping 80 percent plan to work at least part-time during retirement, and 23 percent say they are counting on an inheritance to help fund their retirement. With this patchwork safety net, 65 percent of Boomers feel confident that they will have enough to retire in comfort. John Gist, associate director of the Washington, D.C.-based AARP Public Policy Institute, says that while many Boomers are better off than their parents were at the same age, "their expectations are also greater, and some will find their resources falling short."

Gist thinks Boomers are too sanguine. By his estimate, only a quarter of them will be comfortably set in retirement; at the other extreme, a quarter will end their years in poverty. Half of all Baby Boomers fall somewhere in between. Unless they collect some form of employer-backed benefit, like a pension - and many of them won't - they'll likely have to work part-time to make ends meet. "By and large, Americans today aren't retiring with a lot of resources," says Gist.

It's possible that most Boomers will inherit not a windfall, but simply the wind.

REALITY CHECKS

All this speculation has led researchers to try to pin down an exact figure for the largest and most anticipated transfer of wealth in U.S. history. This transfer of wealth includes inheritances passed from the estates of Boomers' parents to their heirs as well as money going to estate taxes, charitable bequests and settlement expenses.