Spend It All vs. Leave $$ for the Kids

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3504PIR
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Re: Spend It All vs. Leave $$ for the Kids

Post by 3504PIR » Sat Nov 09, 2019 11:30 pm

Trader Joe wrote:
Sat Nov 09, 2019 6:37 pm
MaryO wrote:
Sat Nov 09, 2019 12:13 pm
I was reading a SWR thread and posters were chiming in with their thoughts on generational wealth being part of their retirement plan. For some it's a given. Some believe "teaching a man to fish" and leaving nothing is best. Some plan to help with school/home purchase/wedding but otherwise not let the desire to leave a nice inheritance be a focal part of their planning.

Assuming you don't have a child with special needs who obviously will require assistance down the road, what are your thoughts?
100% of my investment portfolio will be willed to my heirs. I will never spend one dollar.
This is true with us as well, although I will say that in our case 100% of the shares will be as I am sure we will be using dividends along the way for some purpose I assume, although we have no plan at this point. We are also putting our child through college which also tends to be a similar type of discussion around here.

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market timer
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Re: Spend It All vs. Leave $$ for the Kids

Post by market timer » Sat Nov 09, 2019 11:55 pm

As a minimalist myself, the consumption question is whether to spend the money on my kids today vs. let them spend it when I die. My budget is focused primarily on my kids: private school tuition, housing, and travel. I aim to spend $80-100K/year on household expenses until my kids are launched. My wife also contributes separately on top of this.

The interesting question for my kids is how long I'll keep working once my net worth hits the $2.5-3M that could sustain an annual draw of $80-100K/year. While I don't imagine I'd ramp up spending on myself as my net worth rises above $3M, I'm also not sure I'll continue working and adding to the pile. We'll see in a few years.

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Re: Spend It All vs. Leave $$ for the Kids

Post by tibbitts » Sun Nov 10, 2019 12:04 am

I don't have kids, but have someone who's like one to me, and I want to make sure there's enough money to take care of me when I'm old. She might have to make decisions for me, and that will be enough of a nuisance without her having to think about unreasonable financial limitations. She and her family will have wealth beyond anything I'll ever have so I'm not concerned about leaving her money - I don't have enough to matter to her.

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Re: Spend It All vs. Leave $$ for the Kids

Post by bikechuck » Sun Nov 10, 2019 12:11 am

Boomer here, born in 53 my wife in 54. We are enjoying our retirement but we want to do everything possible to ensure that our portfolio holds up and that we do not become a burden to our two daughters. The biggest risk is if one or both of us would need long term care as we are self insured for that.

Since we are being financially prudent we hope that there is a sizable balance in our portfolio when we move offstage and we are hopeful that there will be an inheritance for our children and grandchildren. Both of our daughters have graduate degrees, are hard working and responsible and I am confident that they would use this money wisely.

Adding that we currently have two granddaughters and we would like to help with their college tuition in ten years if our portfolio is in good shape at that point. It would give my wife and I great joy to know that we were able to help our daughters and granddaughters in this manner.

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Re: Spend It All vs. Leave $$ for the Kids

Post by CedarWaxWing » Sun Nov 10, 2019 12:29 am

willthrill81 wrote:
Sat Nov 09, 2019 2:58 pm
Grt2bOutdoors wrote:
Sat Nov 09, 2019 2:26 pm
Parents can provide many things, knowledge but knowledge or skills alone are not the liquid form of exchange in the modern world. Hence, the nature of the question. BTW, not a boomer!
Given the choice between wisdom and money, wisdom is robustly superior. Just look at how lottery winners almost universally turn out. It's true that the two are not mutually exclusive, but it's very difficult to provide both to young children. The blessing in the case of the OP and most here is that by the time our children receive their inheritance, they will likely be fully grown adults themselves, and hopefully they will be sufficiently wise to manage their inheritance without experiencing its pitfalls.
I suspect that lottery winners are not representative of people who inherit large sums of money, and therefore how lottery winners fare after winning a large lottery sum does not likely predict how the offspring of a person who works hard, saves, and invests carefully will fare.

By the time an offspring reaches the early 30s... if is usually pretty clear what kind of person has evolved, and whether sufficient "wisdom" has been learned. Hopefully this changes how to leave an inheritance, and not IF to leave an inheritance. People who save well, spend carefully tend to have an inheritance to leave unless they become very unlucky in their latter decades.

In my family's case, my spouse and I worked all through school to get our college done. It is now very much more difficult to do that and for that reason we are hoping to have enough to leave that our offspring will have a buffer to help pay for their offsprings' college educations, and possibly their own grandchildrens' education... for many decades if it is managed well. Who knows how that will go when our children are gone, but I have no reason to think they are not willing and able to manage the funds to enable the next generations to follow suit... IF they can also pass on the wisdom needed to manage money. That is a chance we are willing (and luckily able) to make.

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Re: Spend It All vs. Leave $$ for the Kids

Post by politely » Sun Nov 10, 2019 3:15 am

I'm hoping to maintain an approximate 3% withdrawal rate when I hit retirement, which is likely to mean a fair amount of money for my children. While I do want to leave the kids a sizable inheritance, I also picked that rate as a fairly conservative measure to avoid running out of money and would have likely picked that rate even without kids. If markets perform better than expected, I plan on funding college for the future grandkids and giving the money to the kids when available instead of waiting for my passing. Heh, I think of the golden rule - do unto others as you would have them do unto you.

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Re: Spend It All vs. Leave $$ for the Kids

Post by msk » Sun Nov 10, 2019 4:00 am

IMHO most BHs will leave sizeable inheritances. This discussion really is about the disposal to charities, heirs, endowments, etc. E.g. most BH needs, especially as you age well past retirement, are probably met by a million $ portfolio + pension + SS + whatever. Add another million $ for discretionary wants. The wants also fade away as you approach age 80. So, what do you do with all that stuff above $2 million? I suspect that many baby boomer BHs already have portfolios above that. Not talking about the average Joe... So, let us say you have several million $ surplus above the $2 million. Been a congenital BH since the 1950s... The choices that I see are either you start giving it away while you are still alive or hoard it till the day you pop off. I have decided to give while I am still alive. Gives me great pleasure to see the fruits of my endowment and the lifting of financial anxiety amongst my adult kids and their families. It also relieves me of all hassle as regards birthday/Xmas presents, etc. Told them all to expect nil :twisted: Highly recommended. No point in hoarding... Only way I see for "spending it all" is to convert all your investments into annuities and then at age 85 you still go around shopping for the latest Corvette :shock:

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JoeRetire
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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 7:50 am

AndrewXnn wrote:
Sat Nov 09, 2019 11:22 pm
Both my father and grandfather paid the tuition for all of their grandchildren to attend college.
I think that's a very thoughtful legacy. Particularly true these days where college is so expensive.

My parents never had enough money to pay for me or my siblings' education. That was always understood when I was growing up. It made me want to be financially secure enough so that I could afford to pay for my sons' tuitions. And so we did. They graduated debt-free.

We've set up and partially funded 529s for our grandchildren. Between that and what our children will contribute, I expect our grandchildren will also graduate without any student loan debt.
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Re: Spend It All vs. Leave $$ for the Kids

Post by Call_Me_Op » Sun Nov 10, 2019 8:03 am

Spend what you need in order to enjoy the remainder of your life. Whatever is left goes to heirs and/or charity. Very simple.

Actually, I am in the camp of those who see leaving a large inheritance as a disservice. That said, I won't spend-down my assets just to try to deplete them.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Spend It All vs. Leave $$ for the Kids

Post by Dandy » Sun Nov 10, 2019 9:44 am

I think that "children" by the time they are in their 30"s have pretty much shown how they can handle life and money. You can probably tell if they received a large inheritance whether that would make their life better or tend to destroy it. Money can corrupt but it doesn't have to. The work you do as a parent early on to set them on a good path is important but is no guarantee.

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MaryO
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Re: Spend It All vs. Leave $$ for the Kids

Post by MaryO » Sun Nov 10, 2019 10:42 am

Such thoughtful, interesting replies. Thank you all.
I do hope to leave $$ for the kids and God willing, help with future grandchildren's educations and throw in some nice family vacations. But step one is doing everything possible to avoid being a burden down the road. Aside from the finances, I vow to clean out all the junk in the attic so the kids aren't cursing us when we've shuffled off this mortal coil.

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Re: Spend It All vs. Leave $$ for the Kids

Post by dknightd » Sun Nov 10, 2019 11:14 am

MaryO wrote:
Sun Nov 10, 2019 10:42 am
Such thoughtful, interesting replies. Thank you all.
I do hope to leave $$ for the kids and God willing, help with future grandchildren's educations and throw in some nice family vacations. But step one is doing everything possible to avoid being a burden down the road. Aside from the finances, I vow to clean out all the junk in the attic so the kids aren't cursing us when we've shuffled off this mortal coil.
I hope I never have to spend all our money. We do not have enough to leave a life changing amount. If wife or I need long term care we can probably afford it. We might be able to afford long term care for both of us. But that would leave nothing left for the next generation. We've raised our kids. We'll continue to help them, and grand kids, as needed, if we can afford it.

We want to be able to take care of ourselves. We do not want to be a burden. Half the crap in our house is the kids. I'd like them to get rid of it before we die. Else we'll have to get rid of it for them ;)

If the kids are lucky they will end up with a paid off house. And a few dollars. That is is the outcome I hope for. I really do not want to have to live in assisted living. I thing if we sell off the house, and deplete savings, the kids will have enough money to pay for our care if that is that is required.

Fingers crossed!

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Re: Spend It All vs. Leave $$ for the Kids

Post by celia » Sun Nov 10, 2019 11:19 am

milktoast wrote:
Sat Nov 09, 2019 12:17 pm
Choose a SWR so if you are in the worst 10% of historical outcomes, you spend it all. And if you experience the average historical outcome, you’ll leave half behind.
The problem with this is that probably the worst 10% of historical outcomes is having NO INCOME at all in your final years, except for government assistance. Then something like 40-50% live on SS alone. We are really talking about being in something like the top 50%, if you have any assets.

I believe in the idea that the best "gift" you can leave your kids is for them not to have to support you in your old age. In our extended families, we have been pretty fortunate that most relatives who have died were left with some kind of assets. I also believed in traveling to our ancestral towns with the kids when they were minors. We showed them that it was just a stroke of luck that they were born where they were born instead of in the "old country". We also model taking care of our elders in their final years and talk about the struggles of past generations. (I am a genealogist.)

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Re: Spend It All vs. Leave $$ for the Kids

Post by pennywise » Sun Nov 10, 2019 11:22 am

remomnyc wrote:
Sat Nov 09, 2019 2:21 pm
We have told our kids our goals are to provide them debt free college degrees and for them not to support us in our old age. We are not saving/spending to leave an inheritance, but as a byproduct of not trying to run out of money for our care, we will likely (unintentionally) leave a significant inheritance. The current plan is to purchase some annuities when we're further along and start giving away up to the gift limit each year to reduce any potential inheritance. Don't want to die rich.
+1

Our fiscal priority is not to burden our kids financially, primarily should our care someday require substantial sums of money. So while we are not specifically denying ourselves in order to enrich heirs, neither are we doling out money to our children to finish out at net zero for us. Fortunately both of them have grown up to be educated, productive people who are frugal and careful stewards of their financial lives.

So failing a catastrophically expensive long term care situation it's probable that we will leave an inheritance. As time passes our plan is to also try to help them if and as they have expenses we can support. We're already planning a daughter's wedding for example, and eventually if there are grandchildren we want to provide support for an educational fund or to take family trips that we can all enjoy.

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Re: Spend It All vs. Leave $$ for the Kids

Post by willthrill81 » Sun Nov 10, 2019 11:24 am

MaryO wrote:
Sun Nov 10, 2019 10:42 am
Such thoughtful, interesting replies. Thank you all.
I do hope to leave $$ for the kids and God willing, help with future grandchildren's educations and throw in some nice family vacations. But step one is doing everything possible to avoid being a burden down the road. Aside from the finances, I vow to clean out all the junk in the attic so the kids aren't cursing us when we've shuffled off this mortal coil.
Very clear wills and correct beneficiary designations on your retirement accounts can greatly benefit your heirs as well.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Spend It All vs. Leave $$ for the Kids

Post by rascott » Sun Nov 10, 2019 11:56 am

Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds

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Re: Spend It All vs. Leave $$ for the Kids

Post by Dottie57 » Sun Nov 10, 2019 12:25 pm

rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
I agree. My mom has terminal cancer. She in all probability will leave a 401k and a 50’s ranch to brother and me. I am retired and brother is on cusp. We would rather have mom than any inheritance.

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Re: Spend It All vs. Leave $$ for the Kids

Post by MaryO » Sun Nov 10, 2019 12:31 pm

rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
The replies are getting to the core of people's value system. Should an "inheritance" be doled out while you are still living? Will helping your kids (of any age) make them lazy? Or will offering help give your kids the confidence to take on challenges they'd otherwise fear because they would risk financial setbacks? And how do you help without risking your own retirement happiness and health care needs. (We're not going to do that!)

The answers will be very different if you are envisioning a stable kid or a knucklehead. I'm looking back at how my husband's and my own lives would or could have been different if either of us had an inheritance. Ours would have been greatly improved, but I could absolutely see it helping some of our combined 8 siblings and hurting others.

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Re: Spend It All vs. Leave $$ for the Kids

Post by rascott » Sun Nov 10, 2019 12:42 pm

Dottie57 wrote:
Sun Nov 10, 2019 12:25 pm
rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
I agree. My mom has terminal cancer. She in all probability will leave a 401k and a 50’s ranch to brother and me. I am retired and brother is on cusp. We would rather have mom than any inheritance.
Sorry to hear about mom.

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Re: Spend It All vs. Leave $$ for the Kids

Post by TomatoTomahto » Sun Nov 10, 2019 12:53 pm

remomnyc wrote:
Sat Nov 09, 2019 2:21 pm
We have told our kids our goals are to provide them debt free college degrees and for them not to support us in our old age. We are not saving/spending to leave an inheritance, but as a byproduct of not trying to run out of money for our care, we will likely (unintentionally) leave a significant inheritance.
We will shortly have satisfied the debt free college degree portion of our gift. We will not become a financial liability to our kids, the second leg of our gift to the kids.

We are gifting the annual gift tax exclusion amount to the kids, one into a spendthrift trust. There will probably be a substantial 7 digit inheritance for each of the kids, but we keep control of enough of it to satisfy any needs of our own.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Dottie57 » Sun Nov 10, 2019 1:31 pm

rascott wrote:
Sun Nov 10, 2019 12:42 pm
Dottie57 wrote:
Sun Nov 10, 2019 12:25 pm
rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
I agree. My mom has terminal cancer. She in all probability will leave a 401k and a 50’s ranch to brother and me. I am retired and brother is on cusp. We would rather have mom than any inheritance.
Sorry to hear about mom.
Thank you. Mom and I are close.

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Re: Spend It All vs. Leave $$ for the Kids

Post by MathWizard » Sun Nov 10, 2019 1:40 pm

My goal is that my kids will not need any money we have left over.

I have told my kids that they should not plan on receiving an inheritance.

Since we do not know when we will die, and I don't plan on annuitizing it all, we will likely have quite a bit left over.

I hope I have taught them well. They have started out life ahead of where I was at their age, so they should be fine.

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Re: Spend It All vs. Leave $$ for the Kids

Post by willthrill81 » Sun Nov 10, 2019 2:36 pm

MaryO wrote:
Sun Nov 10, 2019 12:31 pm
rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
The replies are getting to the core of people's value system. Should an "inheritance" be doled out while you are still living? Will helping your kids (of any age) make them lazy? Or will offering help give your kids the confidence to take on challenges they'd otherwise fear because they would risk financial setbacks? And how do you help without risking your own retirement happiness and health care needs. (We're not going to do that!)
My observation is that challenges, financial or otherwise, for young people are key to helping them build the character and wisdom needed to manage wealth rather than letting it quite literally consume them. While I think that young people can be helped financially without it being ultimately harmful to their character, I believe that we must exercise great care in doing so, whether in providing a 'living' inheritance or a 'traditional' one.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Spend It All vs. Leave $$ for the Kids

Post by goodenyou » Sun Nov 10, 2019 2:41 pm

It would be interesting to know what percentage of BH believe (today) that their kids will be better off financially than they are. And if this has any bearing (today) on their desire to leave a legacy. My kids should be far better off since they started on 2nd base and are running fast. I barely started on home plate. Maybe in the dugout since I had to fund my education. The greatest asset my parents gave me, however, were morals, values and an extraordinary work ethic. I believe we will be able to give the kids that and a financial head start.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Gnirk » Sun Nov 10, 2019 3:15 pm

My DH has always been very clear with me since we married 25 years ago that he is leaving his wealth to his two children ( currently in their mid-50’s) from his first marriage. This has always been his goal. He has been very frugal all his life and continues to be, while I am frugal but more generous. I’ve suggested that in the meantime he gift $15,000 each year to his children so that he can enjoy watching them use it while he’s alive, but his mind doesn’t work that way.

For the most part, I have no problem with that, except I think there are things we should be doing, like travel, that we need to do now while we still can. He agrees, but then doesn’t want to spend the money.

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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 3:18 pm

Call_Me_Op wrote:
Sun Nov 10, 2019 8:03 am
Actually, I am in the camp of those who see leaving a large inheritance as a disservice.
A disservice to whom?
Don't be a lemming.

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JoeRetire
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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 3:22 pm

MaryO wrote:
Sun Nov 10, 2019 10:42 am
Such thoughtful, interesting replies. Thank you all.
I do hope to leave $$ for the kids and God willing, help with future grandchildren's educations and throw in some nice family vacations. But step one is doing everything possible to avoid being a burden down the road.
An excellent step one!
Aside from the finances, I vow to clean out all the junk in the attic so the kids aren't cursing us when we've shuffled off this mortal coil.
Good for you!

My dad passed two weeks ago. My siblings and I are in the process of cleaning out his home now. I just spent the morning going through old paperwork in the house - old tax returns, insurance policies, pictures, etc, etc. Most of it was useless many years ago.

Later this week, I'll start on the garage. Eventually, the attic. It's a lot of old stuff.
Don't be a lemming.

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Re: Spend It All vs. Leave $$ for the Kids

Post by gorow » Sun Nov 10, 2019 3:35 pm

Retired boomer here. I believe if we use 3.3-3.5% withdrawal rate, we will have more than enough for the things we like to do in retirement, and will very likely leave something behind for our 3 self-sustaining adult children. We told them a long time ago that we intend to die broke, but not broke and living in their basement.
The reality is that if something extreme happens for my spouse or I that requires long term care, we have sufficient resources. My siblings and I are currently supporting our parent in that situation, and I do not want my children to have to do that. If we have generally healthy lives, our kids and their families are part of our spending plan. We do things with them that they might not have in their budgets.
Most likely, they will have some money when we are gone, not life-changing, but perhaps life enhancing.
Retired 1/1/2019. Not concerned about sequence of returns because two years here taught me what I need to know.

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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 3:38 pm

Dottie57 wrote:
Sun Nov 10, 2019 12:25 pm
I agree. My mom has terminal cancer. She in all probability will leave a 401k and a 50’s ranch to brother and me. I am retired and brother is on cusp. We would rather have mom than any inheritance.
Sorry to hear about your mom. We just lost my dad to stomach cancer two weeks ago.

It was sad to be there today starting to clean out his house. Sunday used to be our day to watch football together.
Don't be a lemming.

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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 3:42 pm

goodenyou wrote:
Sun Nov 10, 2019 2:41 pm
It would be interesting to know what percentage of BH believe (today) that their kids will be better off financially than they are.
For my sons - one is relatively better off financially than I was at his age and one is not. They are both doing just fine overall though.
And if this has any bearing (today) on their desire to leave a legacy.
No bearing at all.
Don't be a lemming.

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JoeRetire
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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Sun Nov 10, 2019 3:44 pm

Gnirk wrote:
Sun Nov 10, 2019 3:15 pm
For the most part, I have no problem with that, except I think there are things we should be doing, like travel, that we need to do now while we still can. He agrees, but then doesn’t want to spend the money.
It's unfortunate when both partners aren't quite on the same track regarding spending.

Keep the communications lines open - maybe he'll change.
Don't be a lemming.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Big Jim24 » Sun Nov 10, 2019 8:46 pm

CurlyDave wrote:
Sat Nov 09, 2019 12:44 pm
I want to become the favorite ancestor of all my descendants.
Hi Curly Dave. My grandfather is that ancestor for us.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Grt2bOutdoors » Sun Nov 10, 2019 9:06 pm

Dottie57 wrote:
Sun Nov 10, 2019 1:31 pm
rascott wrote:
Sun Nov 10, 2019 12:42 pm
Dottie57 wrote:
Sun Nov 10, 2019 12:25 pm
rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
I agree. My mom has terminal cancer. She in all probability will leave a 401k and a 50’s ranch to brother and me. I am retired and brother is on cusp. We would rather have mom than any inheritance.
Sorry to hear about mom.
Thank you. Mom and I are close.
Sorry Dottie.
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sf_tech_saver
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Re: Spend It All vs. Leave $$ for the Kids

Post by sf_tech_saver » Sun Nov 10, 2019 9:07 pm

I plan to leave as much as possible to my only child. I'm hoping it's over $10M. This helps motivate me to save more/harder.

If I haven't taught my child the value of savings, investing, and using money responsibly by then I haven't done my job. (Hilariously he just crawled up on the couch to watch me type this--he is ~2).

Leave your kids your portfolio after you've left them with the skills to invest/spend/live with money wisely and use it as the basic tool it is vs. a contaminant....my 2 cents.
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Re: Spend It All vs. Leave $$ for the Kids

Post by Grt2bOutdoors » Sun Nov 10, 2019 9:15 pm

goodenyou wrote:
Sun Nov 10, 2019 2:41 pm
It would be interesting to know what percentage of BH believe (today) that their kids will be better off financially than they are. And if this has any bearing (today) on their desire to leave a legacy. My kids should be far better off since they started on 2nd base and are running fast. I barely started on home plate. Maybe in the dugout since I had to fund my education. The greatest asset my parents gave me, however, were morals, values and an extraordinary work ethic. I believe we will be able to give the kids that and a financial head start.
Don't know, too young. Maybe in 15 years I'll have a better vision, right now the crystal ball is too murky.
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Grt2bOutdoors
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Re: Spend It All vs. Leave $$ for the Kids

Post by Grt2bOutdoors » Sun Nov 10, 2019 9:17 pm

sf_tech_saver wrote:
Sun Nov 10, 2019 9:07 pm
I plan to leave as much as possible to my only child. I'm hoping it's over $10M. This helps motivate me to save more/harder.

If I haven't taught my child the value of savings, investing, and using money responsibly by then I haven't done my job. (Hilariously he just crawled up on the couch to watch me type this--he is ~2).

Leave your kids your portfolio after you've left them with the skills to invest/spend/live with money wisely and use it as the basic tool it is vs. a contaminant....my 2 cents.
Open an UTMA, fund it nominally, every month, when your kid can understand numbers, show them the statement quarterly, let them get used to seeing gains and losses. Knock those behavioral missteps out of the way early.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Spend It All vs. Leave $$ for the Kids

Post by latesaver » Sun Nov 10, 2019 9:39 pm

MaryO wrote:
Sat Nov 09, 2019 12:13 pm
I was reading a SWR thread and posters were chiming in with their thoughts on generational wealth being part of their retirement plan. For some it's a given. Some believe "teaching a man to fish" and leaving nothing is best. Some plan to help with school/home purchase/wedding but otherwise not let the desire to leave a nice inheritance be a focal part of their planning.

Assuming you don't have a child with special needs who obviously will require assistance down the road, what are your thoughts?
I plan to save enough to live a lavish retirement compared to what i live now. i am targeting a 3% safe withdrawal rate based on a $100K per year expense load; i only spend $85K max per year.

knowing that i will oversave and probably won't ever loosen up and live that lavish lifestyle, i will leave it to my heirs, along with the $80K i save in a 529 for each of my children.

all of the maths around SWR are fuzzy. so is retirement planning, hence the need for buffers.

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Re: Spend It All vs. Leave $$ for the Kids

Post by 3CheersforLkyJack » Sun Nov 10, 2019 10:14 pm

This is a topic I think a lot about. We are in our mid thirties with two children. One has special needs. He is young so how much extra help he will need isn't completely clear, but our guess is he will need some ongoing assistance. So we're saving for two retirements.

We save as much as we can in an account we've tagged for him. On top of that we will leave enough when we pass so he can have plenty of money to do whatever it is that he enjoys. Hoping to gift to our other son while we are still alive to see the impact. Would also like to fund all grandchildren's college funds. I was blessed to graduate college debt free and to have a head start thanks to the generosity of both my parents and grandparents.

I've seen my parents receive an inheritance in their mid sixties which had no material impact to their life. A large portion of anything that is left to us will be set aside for our special needs son. Otherwise it would have minimal impact if we were in our 50s or 60s.

Our plan is to be as generous with family and charity as we can in our golden years. If things don't go according to plan our child who is able will have to understand that the number one priority has to be to leave enough for the child who isn't able to provide for himself. I won't lie, I do worry about it a lot.

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Re: Spend It All vs. Leave $$ for the Kids

Post by TravelforFun » Sun Nov 10, 2019 10:19 pm

With a 3% SWR, I've no doubt our kids and grandkids will get something from us after we're gone.

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Re: Spend It All vs. Leave $$ for the Kids

Post by MathIsMyWayr » Sun Nov 10, 2019 10:27 pm

MaryO wrote:
Sun Nov 10, 2019 12:31 pm
rascott wrote:
Sun Nov 10, 2019 11:56 am
Find most of these replies odd... in that it somewhat assumes that the money would be left to very young people (children/ young adults) .... which would be far from the norm. Much more likely an inheritance to be going to middle-aged / nearing retirement / in retirement descendants.

By that point in life you should have a pretty clear idea what kind of adults you are dealing with here. I don't think most are talking about setting up big trust funds for 20 year olds
The replies are getting to the core of people's value system. Should an "inheritance" be doled out while you are still living? Will helping your kids (of any age) make them lazy? Or will offering help give your kids the confidence to take on challenges they'd otherwise fear because they would risk financial setbacks? And how do you help without risking your own retirement happiness and health care needs. (We're not going to do that!)
Which is better between a warm helping hand and a cold one?

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Re: Spend It All vs. Leave $$ for the Kids

Post by shorty313 » Sun Nov 10, 2019 10:33 pm

3CheersforLkyJack wrote:
Sun Nov 10, 2019 10:14 pm
This is a topic I think a lot about. We are in our mid thirties with two children. One has special needs. He is young so how much extra help he will need isn't completely clear, but our guess is he will need some ongoing assistance. So we're saving for two retirements.

We save as much as we can in an account we've tagged for him. On top of that we will leave enough when we pass so he can have plenty of money to do whatever it is that he enjoys. Hoping to gift to our other son while we are still alive to see the impact. Would also like to fund all grandchildren's college funds. I was blessed to graduate college debt free and to have a head start thanks to the generosity of both my parents and grandparents.

I've seen my parents receive an inheritance in their mid sixties which had no material impact to their life. A large portion of anything that is left to us will be set aside for our special needs son. Otherwise it would have minimal impact if we were in our 50s or 60s.

Our plan is to be as generous with family and charity as we can in our golden years. If things don't go according to plan our child who is able will have to understand that the number one priority has to be to leave enough for the child who isn't able to provide for himself. I won't lie, I do worry about it a lot.
In a similar boat, one able child, one special needs child. Right now we are planning a retirement for 3 people. I hope we get some clarity on our son’s long term needs in the next 5-10 years.

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MaryO
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Re: Spend It All vs. Leave $$ for the Kids

Post by MaryO » Mon Nov 11, 2019 1:33 pm

JoeRetire wrote:
Sun Nov 10, 2019 3:22 pm
MaryO wrote:
Sun Nov 10, 2019 10:42 am
Such thoughtful, interesting replies. Thank you all.
I do hope to leave $$ for the kids and God willing, help with future grandchildren's educations and throw in some nice family vacations. But step one is doing everything possible to avoid being a burden down the road.
An excellent step one!
Aside from the finances, I vow to clean out all the junk in the attic so the kids aren't cursing us when we've shuffled off this mortal coil.
Good for you!

My dad passed two weeks ago. My siblings and I are in the process of cleaning out his home now. I just spent the morning going through old paperwork in the house - old tax returns, insurance policies, pictures, etc, etc. Most of it was useless many years ago.

Later this week, I'll start on the garage. Eventually, the attic. It's a lot of old stuff.
I am sorry to hear about your dad. I hope you and your siblings will share lots of laughs and good memories as you handle all the cleanout. It really brings up some powerful emotions.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Ron » Mon Nov 11, 2019 1:41 pm

How do you know how much to spend if you want to spend it all? :twisted:

- Ron

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JoeRetire
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Re: Spend It All vs. Leave $$ for the Kids

Post by JoeRetire » Mon Nov 11, 2019 2:16 pm

Ron wrote:
Mon Nov 11, 2019 1:41 pm
How do you know how much to spend if you want to spend it all? :twisted:
It's a pretty simple equation:

"how much to spend" = "all"
Don't be a lemming.

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Re: Spend It All vs. Leave $$ for the Kidsin those

Post by RadAudit » Mon Nov 11, 2019 3:08 pm

Well, since you asked for opinions ...

By now you figured out that opinions on this subject vary according to an individual's personal situation. Mine vary too as I seem to run hot and cold on the question. First, I accept the basic idea of "rags to riches to rags" in three generations. I just don't know where DW, my kids and I are on that curve. But, where ever I am, I'm fairly sure the money won't be around for three generations.

Second, my primary goals are to have enough to are care of DW and me for the duration in the manner she'd like to become accustom to (she deserves it), and avoid becoming a burden to the kids. Third, I'd like to help the kids out financially while I'm around (contribute to the grandkids' college education, etc.) as long as doing so doesn't favor one kid over the other. [DW and I paid for both kids to receive college educations through the masters level.] (What ever the kids get - before or after I'm gone - won't be enough for them to live well without working.) After the government is through with the remainder, the kids will split it 50 / 50.

As you can see, there's enough variables in those goals that anything can happen - from being old and broke on their doorsteps to leaving the kids with more money than my folks left me. Time has a way of answering that question.
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Re: Spend It All vs. Leave $$ for the Kids

Post by BobStrauss » Mon Nov 11, 2019 4:17 pm

One thing I haven’t really seen brought up yet: how inheritance could help adult children in weathering a financial storm. Major health care surprises, freak accidents, lawsuits. There are so many ways in which a bad bounce or two can have permanent negative impacts on one’s life. No matter the values and discipline you instill in your children, you never know what kind of breaks, bad or good, they may have in their future. However, if you raise your kids with BH sensibilities, leaving something behind could potentially make an enormous difference to them in challenging times.

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Re: Spend It All vs. Leave $$ for the Kidsin those

Post by Broken Man 1999 » Mon Nov 11, 2019 4:23 pm

RadAudit wrote:
Mon Nov 11, 2019 3:08 pm
Well, since you asked for opinions ...

By now you figured out that opinions on this subject vary according to an individual's personal situation. Mine vary too as I seem to run hot and cold on the question. First, I accept the basic idea of "rags to riches to rags" in three generations. I just don't know where DW, my kids and I are on that curve. But, where ever I am, I'm fairly sure the money won't be around for three generations.

Second, my primary goals are to have enough to are care of DW and me for the duration in the manner she'd like to become accustom to (she deserves it), and avoid becoming a burden to the kids. Third, I'd like to help the kids out financially while I'm around (contribute to the grandkids' college education, etc.) as long as doing so doesn't favor one kid over the other. [DW and I paid for both kids to receive college educations through the masters level.] (What ever the kids get - before or after I'm gone - won't be enough for them to live well without working.) After the government is through with the remainder, the kids will split it 50 / 50.

As you can see, there's enough variables in those goals that anything can happen - from being old and broke on their doorsteps to leaving the kids with more money than my folks left me. Time has a way of answering that question.
Well said!

The old saying "Man plans, God laughs" comes to mind.

We paid for DDs college, and have back-stopped the grandchildrens college with four years of tuition to any Florida public university. They can also go to private and out of state universities, though more tuition would have to be paid if they choose that route. All four will have some additional funds from the 529 plans I am funding at a modest level. All four are doing very well in school.

As you mentioned, I don't want to be a burden on the daughters. And I also want DW's retirement to be at our current standard of living even if I am gone.

We shall see how things play out.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Re: Spend It All vs. Leave $$ for the Kids

Post by tesuzuki2002 » Mon Nov 11, 2019 4:27 pm

MaryO wrote:
Sat Nov 09, 2019 12:13 pm
I was reading a SWR thread and posters were chiming in with their thoughts on generational wealth being part of their retirement plan. For some it's a given. Some believe "teaching a man to fish" and leaving nothing is best. Some plan to help with school/home purchase/wedding but otherwise not let the desire to leave a nice inheritance be a focal part of their planning.

Assuming you don't have a child with special needs who obviously will require assistance down the road, what are your thoughts?
set some aside for your kids and don't tell them... thus pushing their need to fish for themselves.

tell them you are spending it ALL!!! and spend most of it for sure... then they will get a little gift after you pass and most likely at that point on their lives put it to really good use.

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Re: Spend It All vs. Leave $$ for the Kids

Post by Thegame14 » Mon Nov 11, 2019 4:36 pm

my goal is to transition from working for a company, to working for myself. I recently started a company and I am doing Facebook Advertising Management. I hope to turn that into a legit business hopefully making at least $5K a month, then I may one day start home based accounting firm where I can manage clients books remotely, then I may want to own a rental property and of course have a decent 401K for myself, hoping for $2-3M. With the thought that when my kids reach working age, I transition the companies to them, so they don't have to work for someone else, or only have the security to work for someone else, but always have the business as a side gig. So I guess a mix of both leaving them whatever is left in my 401K when we are gone, plus giving them a business to run and teaching it to them over time, is teaching them to fish...

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Re: Spend It All vs. Leave $$ for the Kids

Post by MathIsMyWayr » Mon Nov 11, 2019 5:30 pm

JoeRetire wrote:
Mon Nov 11, 2019 2:16 pm
Ron wrote:
Mon Nov 11, 2019 1:41 pm
How do you know how much to spend if you want to spend it all? :twisted:
It's a pretty simple equation:

"how much to spend" = "all"
Bill Gates has $106B. If he spends it all today, poor Bill will be broke from tomorrow.

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