n recent years the role of intergenerational transfers in the process of wealth accumulation has been the subject of substantial empirical and theoretical analysis. The key question stimulating this research is: What is the main explanation for savings? Is it primarily accumulation for retirement as claimed by Albert Ando, Richard Brumberg, and Franco Modigliani in their celebrated Life Cycle Model of Savings? Is it primarily intentional accumulation for intergenerational transfers? O r is it

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... imarily precautionary savings, much of which may be bequeathed because of imperfections in annuity markets? The answer to the savings puzzle has many policy implications; certain tax structures are much more conducive to some types of savings than others, and certain government insurance programs might appear less attractive if precautionary motives are the main explanation of savings. Knowledge of the primary savings mechanism would also provide the key to understanding the distribution of wealth. Solving the savings puzzle requires first collecting the pieces and then seeing how they fit together. A major piece of the puzzle is understanding the quantitative importance of intergenerational transfers to the accumulation of wealth. As I argue below, there is strong evidence that intergenerational transfers play a very important and perhaps dominant role in U.S. wealth accumulation. This does not mean, however, that intentional saving for gifts and bequests is the main motive for savings. Significant intergenerational transfers could also arise in the Life Cycle Model in the absence of well-functioning private annuity markets or close substitutes for such markets. In such a setting bequests would be involuntary and potentially quite sizeable (