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Honestly, I hope my parents spend all the money they would be giving me and my siblings. All of us do plenty fine for ourselves and we would rather them have a blast in retirement instead.
Rising Star
I’m 26 and I expect to receive (as of now) $7M in cash or stock market investments and about $29M+ in real estate. It hasn’t impacted how I plan to save for retirement. My parents taught me not to rely on anyone else and to be financially independent, so I’m still maxing out my 401(k), HSA, and IRA each year. Without there inheritance and based on my current circumstances and income, I expect to retire at 50 with $3M.
Also, I know that if I am not smart with my finances during my life, I won’t be inheriting anything.
Pro
I am very much striving for that :) I don’t ever want my kids to have to go through the very poor childhood I went through back when we first got to the states
For context, we save significantly (~125k/yr) for retirement and just learned that my SO would be receiving a relatively large inheritance (think >$5M in today’s money). Not coming from means myself, my current plan is to pretend that money won’t ever materialize, but then again we aren’t planning on kids and dying with a ton in the bank while living frugally feels kinda silly too.
Honestly the saving >125k just kind of happens. We make a bit over $300k total, about $90k is for taxes, and we spend the rest including a rather lavish wine budget and some nice trips. Vehicles/student loans are all paid off, no other debt, so kinda run out of things I’d want to buy, hence the savings. Most of our spend is on home upgrades
I am 25 and expect at least 5 million in Inheritance. Like most people in this thread it hasn’t changed my perspective about retirement and saving. I still put 45-50% of my paycheck to retirement every month.
I think watching what has happened to my mom has shaped the way I think about inheritance and retirement. My mom is expecting a large inheritance (~10 million) from her mom. Knowing this my mom hasn’t saved a penny towards her retirement. Unfortunately (at least from a money perspective) my grandmother has lived a lot longer then my mom expected. So now my mom is in this game where she is still working and waiting on her mom to die so she can retire.
My siblings and I are each expecting in the range of 4-6 million in stock, more in cash when our parents pass.
We hope that will not be until we are already retired and so we all plan as if we will never see a dime or spend a dime of that money.
It will probably end up as a scholarship fund at my alma mater. No material impact on retirement planning!
Rising Star
I'm not expecting much, if anything. On the contrary, I fully expect to significantly help my parents with their retirement. Unfortunately my siblings aren't high earners.
That being said, if I was expecting an inheritance, I would probably plan as if I wasn't. Or at least don't spend or not save to the point where you would be severely impacted if the money didn't come through. Nothing is final until it's final.
I received 700k several years ago. The inheritance doesn’t affect my retirement savings (standard) or my spending (I have a simple lifestyle). I’m 24 and single. If I have kids the money will all pass on to them (and hopefully much larger by then). Basically I just have it if I “need” it but I have a job that covers my bills with enough left over so I never think about it.
Hmm, well no plans for a house without a partner/kids (renting a studio now). Car was inherited. Retiring early is an option but not really a concern for another 30 yrs (I enjoy working but I’ve only been at it less than 2 years haha)
Pro
Never adjust your retirement until the money is in your bank account. Seriously!
You simply can’t count on money that are not under your control.
I have $5M now inherited and will likely receive several million more when my parents pass. It doesn’t really change anything, except eliminating some stress. I still max out my 401k and I’m on track to make my own way. Some people don’t understand this mindset, but I need to do this for my own self confidence. Money can’t buy a sense of accomplishment and self worth (unless you earn it yourself 😉).
No, but very curious about others/the replies.
I'd imagine if I KNEW I had a large sum - we're talking in the millions - coming, at a certain point (eg a trust fund), it would take mental pressure off me in terms of saving for retirement - and so I might make different career choices (not take money as much into account), and certainly different time choices - i.e. work part time and spend more time with my young kids, versus working (more than!) full time.
But nothing in life is guaranteed, and I know that wealth can bring its own problems, so I try not to think too favorably of this hypothetical scenario!
Great point, I lean the same, but also very interested in others’ responses. With the impending large transfer of wealth between the boomer generation and their children, I expect some of these questions may come up again.
I honestly didn’t even think about it. My parents have about a solid 15/20 years left in my opinion, so I’m hoping they spend it all. I’ll survive without it. And if there is some money that I get, I’ll put it towards my kids education in the future. That’ll make my parents really happy.
I am getting $0. My parents are immigrants and rented their entire lives (so, no house inheritance). My dad became really ill in his early 50’s and couldn’t work. So, actually my siblings and I help them now. My grandparents moved here with almost nothing because their money and homes in the home country became worthless. I am on my own and it sucks because everyone I know is due to inherit at least the equity in their parents home. But, my parents are amazing and sacrificed a lot, so I am not complaining.
How significant are we talking? A couple hundred grands or millions? Lol
A fair amount from the grandparents, followed by a few mil from the parents much later down the line (knocks on wood). My saving behavior won't change. I want to model good behavior for my kids and I really want them to have a thrifty mindset by default. I believe they'll have a more positive impact on the world with a non 1% lens growing up.
We expect to receive inheritance from both my wife’s parents and mine (between $10-50m). We haven’t planned our lives around it given we were taught to work hard to make a living. We max out our 401Ks, invest in the markets, invest in real estate and other alternative asset classes, just like any investor might, and live below our means. We’ve treated their money as someone else’s our entire lives. The one role we do play is help them think through how best to manage their wealth but that comes from a place of making sure they don’t end up making bad financial decisions as opposed to a place of expecting it to come to us. Even if they did make those decisions though, candidly it’s their money to make those with.
I wouldn’t say significant. But I have definitely been pushing extra hard to get financially independent before I inherit any money.
I go back and forth but most recently we’ve said no debt + 1.2 mil. For us FI <> retirement, so it’ll be more a state of mind.
Rising Star
That's a good question, OP. I've given it a little bit of a thought. Here's my take on it: Fairly certain that there won't be any inheritance from my side of the family. There might be from spouse's side but the amount and timeline isn't clear (and it shouldn't be!) So we plan for nothing. Anything is gravy.
If we were to expect a significant (hundred thousand+) guaranteed amount, I would bake that in our retirement calculations and see if we can FIRE.
I’m expecting ~$5M in real estate. I don’t know about any cash or other investments because my family doesn’t talk about it. This has not changed or influenced my retirement plan or goals. I’m earning my own way and want to start my own business.
Rising Star
I think it would be very hard to factor any inheritance into your retirement planning, as you could conceivably not see that inheritance until you are in your 70s. That’s a long time for most of us, and there’s a lot that could happen to that inheritance between now and then.
My SO will probably receive $5M+ over the next 10 years. The disbursements are phased out through a decade or so. I’m saving for my retirement like that doesn’t exist. I think she factors that into her retirement which is fine, but my plan is to retire early with my own savings.