When Your Retirement Plan Depends on Your Parents Dying

Chase

Active member
One of my colleagues (she's an attorney married to a chef) admitted to me that her retirement plan consists solely of expected inheritances from both her and her husband's family. I was a bit taken aback, but when I've told that story to other people, they have been less shocked. And some have admitted that their parents' money figures heavily into their own retirement plans.

Maybe I'm just jealous--both of my parents are deceased. They never thought of themselves as poor, especially in their comfortable retirement. Upon our mother's death, my sister and I split the $95,000 (including the family home) estate. I'm grateful for what I got, especially since it became the down payment on my current residence. It also saved me from having to sell my first home, which has been paid off for years and which I now use as a rental. But retire on $47,500? Even with 26 more years to grow it? I think not! I wouldn't have done it then even without foreknowledge of the recession to follow. I can't imagine doing it now.

I wonder if my colleagues have read the latest issue of Money Magazine, which reports that only 14% of baby boomers' parents--down from 22% in 2005--even believe they owe their children an inheritance. Most are intent on spending the money they have acquired, some for health care and many for "good times." It's their money, and it is not up to us to begrudge our parents' use of what belongs to them.

Money Magazine advises boomers to substantially lower their expectations. While around 50% of parents do plan to leave at least $100,000 to their adult children (not exactly enough for a well-funded retirement), life may intervene. Not just market returns, but extended long-term care could make a mockery of good intentions.

For myself, I do plan to leave money for my five children. It's certainly NOT going to be enough to fund a retirement plan, but I'd like to get their retirement monies off the ground. Then again, I won't be around to direct how they spend whatever I DO leave them.
 

Alexandoy

VIP Contributor
I know of some people who depend on their parents even when they are already married. In fact, a close relative not only has a family but also grandchildren but he is still living in the ancestral home and depending on the parents for the subsistence of his family. When his parents died he was lucky to have inherited the wealth partly because he has 2 siblings who shared in the inheritance. Nevertheless the guy is now in a pretty good retirement situation that he has lots of money aside from the properties that were left behind by his parents. But I do not envy that kind of situation because I prefer to have a retirement on my own effort. I now have a pension and I am proud to say that I am not in shortage when it comes to finances.
 

Nova

Active member
I can feel that situation in my house too. When you don't have strong siblings who can't take care of their own selves. The money they are trying to give after the death. We don't know how much is going to be the percentage for the same. And we don't know how long that would be taking for you to help your own old age. I'd say that things like this happen to many and they tend to end up with more of financial issues. And in the process the parents also suffer because they they never teach their kids to grow stronger.

I think in order to get out of situation, we have to teach our kids how to save money. And we are also in need to understand the economy lot clearly. But that does not happen. And it just ends up making use more fight among ourselves for parents money.
 
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