The typical American heir is now a middle-class 50-something who puts the money toward retirement

As of 2016, more than a quarter of inheritances go to people over age 61. Oftentimes, they're used to bolster financial security in retirement .
Researchers say Americans receiving larger inheritances later in life is the result of increased life expectancy, solid market returns, and retirees spending less than they have in the past.
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While stories about sudden inheritances upending the lives of young people persist, they're actually the minority.

In a new white paper published by United Income from Capital One , researchers found that as of 2016 the average age of Americans receiving an inheritance is 51 a 10-year increase from 1989. What's more, over 25% of inheritances are going to people over the age of 61.

The researchers concluded that these late in life windfalls are often a boon to the recipient's financial security at a crucial life stage: retirement .

"Inheritances used to go more toward mid-career, mid-life expenses like kids, and now they're likely going more toward concerns of people in their 50s, which is saving for retirement," Lincoln Plews, a research analyst and coauthor of the paper, told Business Insider.

Americans inherit more, later

About 20% of Americans receive an inheritance, according to the paper. But while that share has remained relatively flat over the last three decades, the median inheritance size has jumped $15,000, to $55,000. And the typical beneficiary? They're more middle class than you might imagine. The data show they earn about $69,000 annually though about 25% earn less than $35,000 a year have no college degree, and have just $25,000 in retirement savings.

"Taken together with the relatively modest financial profile of a typical inheritance recipient outlined above, this indicates that inheritances represent much more than a new Ferrari or better beach house for the young progeny of the ultra-wealthy (though it likely does mean these things in some cases)," the paper states. "Instead, inheritances seem to be essential pieces of the retirement security puzzle, bolstering the assets of middle-of-the-road older households just before they retire."

Longer lives and solid market returns contribute to the changes

The reason people aren't getting inheritances until later and larger ones, at that is thanks to a few comingling factors, Elizabeth Kelly, senior vice president of operations at United Income, told Business Insider. For one, Americans are living longer. As people die at older ages, their spouses or children or whoever they're leaving money to are growing older as well.

In the meantime, the inheritances themselves have grown in size in part because of solid market returns over the last 30 years, Kelly said. Plus, Americans over age 60 are cutting their spending by an average of 2.5% a year, Kelly said, citing a 2017 paper from United Income . Oftentimes they do so out of fear that they'll run out of money.

"To see that most people receiving inheritances are normal or middle class," Plews said, "there's a sign that for some of that group, an inheritance represents a hidden nest egg that bolsters their retirement assets at the most critical time pre-retirement."