Would a $1MM inheritance change your retirement plans?

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Wanderingwheelz
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Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
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FiveK
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Re: Would a $1MM inheritance change your retirement plans?

Post by FiveK »

Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early.
Why "but" instead of "and"? :?
marcopolo
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Re: Would a $1MM inheritance change your retirement plans?

Post by marcopolo »

It might, but only AFTER i actually had the money in my accounts.
I would not factor it in while it is still an anticipated inheritance.
Too many things can change between now and "sometime down the road".
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rich126
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Re: Would a $1MM inheritance change your retirement plans?

Post by rich126 »

Sure would, at least at my age (50s). Actually maybe around 250K would. Like someone else mentioned, I never include possible inheritance in my retirement plans. I'm guessing I would get some from a couple of relatives but it is their money and not mine at this time and a lot of things could happen in their remaining years.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Jack FFR1846 »

Once the cash is in my accounts, yes. I'd stop working, probably immediately. But I won't count my chickens ahead of time because we're seeing first hand with a relative who's not doing well in assisted living and from what I understand, now qualifies to move over to the nursing home facility. Any inheritance was mainly tied up in the house that was sold shortly after the relative entered assisted living. That was on the order of $4500 a month. I believe the nursing home will jack that up to $12,000 a month. The money from the house ($139k) along with a state pension and little savings will be spent down, then her income from the pension and a small annuity will go to the facility. The only inheritance we expect is not having to deal with emergencies.

So my story is to warn you that even if a parent has a 2 comma portfolio, that can go away to pay for their care. And in my opinion, it should.
Last edited by Jack FFR1846 on Mon Nov 02, 2020 5:40 pm, edited 1 time in total.
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Re: Would a $1MM inheritance change your retirement plans?

Post by anon_investor »

marcopolo wrote: Mon Nov 02, 2020 5:18 pm It might, but only AFTER i actually had the money in my accounts.
I would not factor it in while it is still an anticipated inheritance.
Too many things can change between now and "sometime down the road".
+1!
Normchad
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Re: Would a $1MM inheritance change your retirement plans?

Post by Normchad »

Inheriting a $1M wouldn’t change my plans at all.

I’d try to spend the money, but it wouldn’t affect my decision or timing to retire. It would just make it more luxurious.
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Re: Would a $1MM inheritance change your retirement plans?

Post by stoptothink »

Jack FFR1846 wrote: Mon Nov 02, 2020 5:38 pm Once the cash is in my accounts, yes. I'd stop working, probably immediately. But I won't count my chickens ahead of time
I have seen first-hand, with my mom (and 5 of her 6 siblings) that you don't count on inheritance until it hits your bank account. If we got $1M today, I think wife and I would continue on, but plan on calling it quits in ~5yrs (at 44 and 39).
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Re: Would a $1MM inheritance change your retirement plans?

Post by jebmke »

Only if it took me from insufficient to sufficient funds AND I had reached a decision to retire based in non-financial criteria.
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Re: Would a $1MM inheritance change your retirement plans?

Post by runner3081 »

Right now, probably not. Have about 10-years left to a hopeful early retirement. Would only provide a buffer to maybe spend a bit more or downshift to part-time earlier, or donate more to charity.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Dregob »

What is a $1MM inheritance?
Is it $1 million?
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Re: Would a $1MM inheritance change your retirement plans?

Post by wfpbFI »

I'm am in a simular situation but a few years younger. I am planning an early retirement in the next 2-3 years. However, like some have already posted they would not count on an inheritance until it shows up into your account, I feel the same way.

Much like Social Security, I am not planning on inheritance. Both are likely to happen, but my plans as an early retiree hopeful do not include them. If the math works without the extra $, then it definitely works with it.

Congrats on reaching FI!
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Re: Would a $1MM inheritance change your retirement plans?

Post by PowderDay9 »

It wouldn't change my retirement plans but might make retirement better. Like others have said, don't count on it until you receive it. I am counting on social security though and have full confidence it will be around for generations.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Brianmcg321 »

It would make my retirement date about 5 years sooner.

In the meantime I would sure have a nice Tesla to be driving around in.
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Re: Would a $1MM inheritance change your retirement plans?

Post by arsenalfan »

A windfall now would probably make me accelerate my continued move to part-time work in my current position, and take another day off during the week.. Since this would always give me 4 day weekends I'd consider buying a second home in to go with the kids. This is my plan to do by 2022, but I'd do it now if I inherited $1mm.

But as prior posters have noted, tricky to account for inheritances.

For me, it's best to live in the now, without counting on windfalls even if you consider them a lock.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Silverado »

Dregob wrote: Mon Nov 02, 2020 5:49 pm What is a $1MM inheritance?
Is it $1 million?
Assume what you want and provide a response.

If we had an extra million drop in tomorrow it would alter things a bit, but we would still likely stay with the current plan of bolting at 55. I might replace my 12 year old laptop immediately though.
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Re: Would a $1MM inheritance change your retirement plans?

Post by 7eight9 »

Dregob wrote: Mon Nov 02, 2020 5:49 pm What is a $1MM inheritance?
Is it $1 million?
In finance and accounting, MM (or lowercase “mm”) denotes that the units of figures presented are in millions. The Latin numeral M denotes thousands. Thus, MM is the same as writing “M multiplied by M,” which is equal to “1,000 times 1,000”, which equals 1,000,000 (one million).
https://corporatefinanceinstitute.com/r ... -millions/
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Mike Scott
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Re: Would a $1MM inheritance change your retirement plans?

Post by Mike Scott »

Not until you actually get it.
And for me, no, because I'm still short of my full pension date by a little bit.
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Re: Would a $1MM inheritance change your retirement plans?

Post by AerialWombat »

Yes, without a doubt.

I'm already "semi-retired", and an extra $1 million in liquid funds (actually in my possession, as others have noted) would be more than enough for me to fully retire. Honestly, half a million would do it.
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Re: Would a $1MM inheritance change your retirement plans?

Post by 260chrisb »

I'm less than a year and a half away so no it would not change my plans. It would change my spending habits dramatically. :D
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

FiveK wrote: Mon Nov 02, 2020 5:18 pm
Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early.
Why "but" instead of "and"? :?
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

Jack FFR1846 wrote: Mon Nov 02, 2020 5:38 pm Once the cash is in my accounts, yes. I'd stop working, probably immediately. But I won't count my chickens ahead of time because we're seeing first hand with a relative who's not doing well in assisted living and from what I understand, now qualifies to move over to the nursing home facility. Any inheritance was mainly tied up in the house that was sold shortly after the relative entered assisted living. That was on the order of $4500 a month. I believe the nursing home will jack that up to $12,000 a month. The money from the house ($139k) along with a state pension and little savings will be spent down, then her income from the pension and a small annuity will go to the facility. The only inheritance we expect is not having to deal with emergencies.

So my story is to warn you that even if a parent has a 2 comma portfolio, that can go away to pay for their care. And in my opinion, it should.
My pop has not one but two long term care policies. Yes, he’s far more prepared for what might happen ten years from now than he is tomorrow.
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Harry Livermore
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Re: Would a $1MM inheritance change your retirement plans?

Post by Harry Livermore »

$1MM inheritance would be the icing on the cake. I would be officially retired. But I am 53 and we are almost at our goal anyway. If this was 20 years ago, it would merely take the edge off but I would certainly still work, save, and invest.
Cheers

ETA: It seems that many people responding to the original post are advising the OP to not count on any inheritance. I agree.
I should say that I fully expect no inheritance at all. My mom is young, healthy, and not particularly rich. We enjoy her company and she a great grandmother. My wife and I have always planned our financial life with the expectation that we are on our own.
Cheers
Last edited by Harry Livermore on Tue Nov 03, 2020 7:11 am, edited 1 time in total.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Normchad »

7eight9 wrote: Mon Nov 02, 2020 6:47 pm
Dregob wrote: Mon Nov 02, 2020 5:49 pm What is a $1MM inheritance?
Is it $1 million?
In finance and accounting, MM (or lowercase “mm”) denotes that the units of figures presented are in millions. The Latin numeral M denotes thousands. Thus, MM is the same as writing “M multiplied by M,” which is equal to “1,000 times 1,000”, which equals 1,000,000 (one million).
https://corporatefinanceinstitute.com/r ... -millions/
Thanks, I have learned something new. I knew MM should be taken as million, but didn’t know why. That totally makes sense.
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Re: Would a $1MM inheritance change your retirement plans?

Post by goingup »

Truly don’t count on an inheritance until it is actually bequeathed. We never gave it a thought. My dad’s money was his to spend and he did. Got remarried. Bought a condo on the beach and had a great second chapter of his life.

I don’t want to sound harsh, but it seems in poor taste to plan one’s future based on an inheritance. That’s my view of it anyways.
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Re: Would a $1MM inheritance change your retirement plans?

Post by sailaway »

It would be reasonable for us to expect a similar inheritance from DH's parents and a smaller, but not insignificant, inheritance from my parents.

It is also reasonable to expect our parents to live another 20 years or more. We have had quite a few relatives live into their 90s.

Full time care can eat into an inheritance fast.

Since we have siblings that are hopeless with money and who have no retirement savings, it wouldn't be ridiculous for parents to decide to leave more money to them or even to just skip a generation and give to their by then adult grandchildren.

We will deal with an inheritance if and when it comes, but we will not make any plans for it.

But then, we don't even count our RSUs until they hatch. A lot can happen in the next three weeks to affect that stock price!
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Re: Would a $1MM inheritance change your retirement plans?

Post by marti038 »

I would not count on it until it was in hand, but if I did receive such an inheritance it might persuade me to retire earlier.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Grt2bOutdoors »

No. But if it were significantly more, yes.
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Re: Would a $1MM inheritance change your retirement plans?

Post by cogito »

If I inherited 1 million dollars tomorrow, I would quit my job immediately, sell my house, and take my family to live in Hawaii for a year while we figured out what we wanted to do with the rest of our life.
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Re: Would a $1MM inheritance change your retirement plans?

Post by FrugalInvestor »

I would likely spend more, give more and pass along more. I may also retire earlier.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

cogito wrote: Mon Nov 02, 2020 8:53 pm If I inherited 1 million dollars tomorrow, I would quit my job immediately, sell my house, and take my family to live in Hawaii for a year while we figured out what we wanted to do with the rest of our life.
I just mentioned this reply to my wife and it made her night. :)
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Re: Would a $1MM inheritance change your retirement plans?

Post by Trader Joe »

Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
No, not at all. This would never move the needle.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Soon2BXProgrammer »

Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
not until it actually shows up, because my great aunt (no children), is 97 and still kicking.. She could live another 10+ years easily at this rate, and she has been in a lost your brain home for a decade already.

Easily she could burn through the million.
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Re: Would a $1MM inheritance change your retirement plans?

Post by goodenyou »

No. Doesn’t move the needle enough.
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Re: Would a $1MM inheritance change your retirement plans?

Post by cogito »

Wanderingwheelz wrote: Mon Nov 02, 2020 10:18 pm
cogito wrote: Mon Nov 02, 2020 8:53 pm If I inherited 1 million dollars tomorrow, I would quit my job immediately, sell my house, and take my family to live in Hawaii for a year while we figured out what we wanted to do with the rest of our life.
I just mentioned this reply to my wife and it made her night. :)
It would make my wifes night as well if I told her I was entertaining this as a plan if we were magically FI in a lottery-type scenario. :sharebeer
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wings5 »

No. We’ve had conversations about it, but it would only be gravy. If anything it might turn into some large donations.
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Re: Would a $1MM inheritance change your retirement plans?

Post by rossington »

Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
Seriously, keep on working...period. It's not your money now, stop the morbid thinking and get on with your current life.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

rossington wrote: Tue Nov 03, 2020 3:42 am
Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
Seriously, keep on working...period. It's not your money now, stop the morbid thinking and get on with your current life.
I don’t think it’s morbid thinking at all. My dad doesn’t have a great sense of humor but a couple of times I’ve told him, jokingly, that we hope he lives to 120 because he’s a net saver on a very large pension that’s indexed to inflation. It’s hard to make him smile, but that gets one.

Everybody dies someday. Some of those people die with a lot of money that they didn’t spend. How is that morbid?
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Re: Would a $1MM inheritance change your retirement plans?

Post by Garco »

$1 million is a lot of money. But it's not yet in your hands. My wife and I inherited a bit more than twice that amount, but only when we were late in career. We used some of that money to liquidate debts that our adult children still had from their college costs. The rest we invested in a separate brokerage account. So the inheritance played a positive role in our family but didn't by itself affect our retirement schedule or plans. Rather it smoothed the retirement process and helped the finances of our children. Now that we're retired it provides a financial cushion that has given us more options for extra-curricular activities, e.g., travel abroad. But more importantly it means we don't have any money worries, and there will be a financial legacy for our children.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

Garco wrote: Tue Nov 03, 2020 8:32 am $1 million is a lot of money. But it's not yet in your hands. My wife and I inherited a bit more than twice that amount, but only when we were late in career. We used some of that money to liquidate debts that our adult children still had from their college costs. The rest we invested in a separate brokerage account. So the inheritance played a positive role in our family but didn't by itself affect our retirement schedule or plans. Rather it smoothed the retirement process and helped the finances of our children. Now that we're retired it provides a financial cushion that has given us more options for extra-curricular activities, e.g., travel abroad. But more importantly it means we don't have any money worries, and there will be a financial legacy for our children.
That’s the type of reply that I was looking for. Thank you.
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Re: Would a $1MM inheritance change your retirement plans?

Post by LilyFleur »

Garco wrote: Tue Nov 03, 2020 8:32 am $1 million is a lot of money. But it's not yet in your hands. My wife and I inherited a bit more than twice that amount, but only when we were late in career. We used some of that money to liquidate debts that our adult children still had from their college costs. The rest we invested in a separate brokerage account. So the inheritance played a positive role in our family but didn't by itself affect our retirement schedule or plans. Rather it smoothed the retirement process and helped the finances of our children. Now that we're retired it provides a financial cushion that has given us more options for extra-curricular activities, e.g., travel abroad. But more importantly it means we don't have any money worries, and there will be a financial legacy for our children.
This. I was retired, living a modest lifestyle. Inheriting less than half a million enabled me to send my children to study abroad in college with trips piggybacked on those for the three of us two summers in a row, pay their student debt, pay a $25,000 assessment on my condo without breaking the bank, and invest the rest. It was the icing on the cake. And, down the road, I will help them with down payments and weddings.
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Re: Would a $1MM inheritance change your retirement plans?

Post by flaccidsteele »

Wanderingwheelz wrote: Mon Nov 02, 2020 5:15 pm The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses, but we are considering retiring early. I will inherit at least $1MM, and it could be as much as $3MM, sometime down the road which I do no factor into any of my retirement calculations.

Would this windfall affect your retirement plans, all else being equal?
I retired in my 40s with over $5m+ so an extra $1m would be nice

I also live in Canada with the “free” healthcare, social safety nets and inexpensive universities

Not sure what would change that hasn’t already

$10m+ would change things, but $1m likely wouldn’t
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Re: Would a $1MM inheritance change your retirement plans?

Post by Broken Man 1999 »

Well, I take OP at his word that he and his wife are financially independent. But I wonder, as he stated, "...The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses..."

Fixed expenses aren't the only expenses one encounters in retirement.

This could be just selection of a word to use. Might mean nothing, might not.

If ALL retirement expenses are safely accounted for in the decision-making process, fine.

At the same time, I would not be of the mind to retire with any expectations of receiving an inheritance.

The question for OP is: Can you retire comfortably without an inheritance?

If so, retire but live on your resources, not anticipating any large influx of money a few years later.

Life doesn't always follow one's desired plan.

The person(s) currently having the money might remarry if one member (if they are a couple) passes. They might need lots of LTC, possibly two needing LTC.

You can always ramp up spending if you want to when you receive an inheritance. Could be a different matter to ramp down spending if you don't.

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Re: Would a $1MM inheritance change your retirement plans?

Post by 3funder »

Not much.
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Re: Would a $1MM inheritance change your retirement plans?

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (retirement planning).
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Re: Would a $1MM inheritance change your retirement plans?

Post by adamthesmythe »

Apparently OP is into ancient history, because in Roman numerals M = 1000.

More modern people know that k = kilo = 1000 and M = mega = 1000000. So I OP is really talking about 1kk or 1M.

To the question- 1 M would have made a difference to me but not an enormous difference. It wouldn't have induced me to retire early, I don't think.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Chris K Jones »

marcopolo wrote: Mon Nov 02, 2020 5:18 pm It might, but only AFTER i actually had the money in my accounts.
I would not factor it in while it is still an anticipated inheritance.
Too many things can change between now and "sometime down the road".
This is my answer too. If it was an extra million dollars in hand, it might change things, but not until then. "Wouldn't be prudent" as George Bush the Elder said.
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Re: Would a $1MM inheritance change your retirement plans?

Post by megabad »

No. Unless it was in a pre tax IRA/401k/retirement plan. Then I might have to retire to grieve the tax burden in addition to the personal loss.
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Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

Broken Man 1999 wrote: Tue Nov 03, 2020 11:18 am Well, I take OP at his word that he and his wife are financially independent. But I wonder, as he stated, "...The reason I ask is my wife and I are financially independent at 45/49, with plenty of investments to cover our fixed expenses..."

Fixed expenses aren't the only expenses one encounters in retirement.

This could be just selection of a word to use. Might mean nothing, might not.

If ALL retirement expenses are safely accounted for in the decision-making process, fine.

At the same time, I would not be of the mind to retire with any expectations of receiving an inheritance.

The question for OP is: Can you retire comfortably without an inheritance?

If so, retire but live on your resources, not anticipating any large influx of money a few years later.

Life doesn't always follow one's desired plan.

The person(s) currently having the money might remarry if one member (if they are a couple) passes. They might need lots of LTC, possibly two needing LTC.

You can always ramp up spending if you want to when you receive an inheritance. Could be a different matter to ramp down spending if you don't.

Broken Man 1999
We have a net worth just short of $4MM and no debt. That’s investments plus a paid for RV and a paid for home- nothing else counted including business equity. We’re careful spenders, but we like nice things.

My biggest concern for retirement is the same as most everyone else here and that’s the cost of health insurance and health care.
3 Fund Portfolio. 70%/30% AA. No mortgage. Simple.
Topic Author
Wanderingwheelz
Posts: 1064
Joined: Mon Mar 04, 2019 9:52 am

Re: Would a $1MM inheritance change your retirement plans?

Post by Wanderingwheelz »

adamthesmythe wrote: Tue Nov 03, 2020 12:01 pm Apparently OP is into ancient history, because in Roman numerals M = 1000.

More modern people know that k = kilo = 1000 and M = mega = 1000000. So I OP is really talking about 1kk or 1M.

To the question- 1 M would have made a difference to me but not an enormous difference. It wouldn't have induced me to retire early, I don't think.
MM is 1000x1000 which is 1,000,000
3 Fund Portfolio. 70%/30% AA. No mortgage. Simple.
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