That's a sign they never prepared. Only person to save you is YOU. I told my mom, "use all your money if it helps you enjoy life. I could care less if you leave me a penny. A heart felt note would be worth so much more."
With regard to inheritance and retirement I've always assumed I would inherit nothing and planned for funding retirement completely from my own savings and investment. That way I can care for my aging parents and help them manage their money without feeling any conflict about how they need to or choose to spend the money they worked hard their whole lives to earn. If I do inherit money I may end up having worked longer than I needed to but I'd rather have that problem than feel dependent on my parents leaving me money.
That's not really a plan. A truly useful and informative retirement plan must include every single known factor. This is why an effective retirement plan is a living document that is re-evaluated every few years to factor in new data or changing assumptions, as changes will surely happen. Similarly, some people don't include Soc Sec in their retirement planing out of fear that it won't be there, even though there is no evidence that Congress won't fix it in the 11th hour like they always do. When it comes to inheritance, I think the best policy is open communication, so there are no surprises. Talk to your parents about their finances regularly, so you can be forewarned of any change in their situation or intentions.
Your first mistake is expecting an inheritance. Never expect....just appreciate it if you get one. Second, always plan as if you're not getting an inheritance. Then if you do get one then it's just a bonus!!!
Just a note to say thank you to this couple for sharing their journey. The questions around inheritance are very emotive and will get a lot of reactions, none of which are about this couple. Many of us are in this same phase with our parents and it is a topic that produces a lot of opinion. It’s super helpful to show it in this way and this couple has done us all a favor being so open about their own thought process and situation. Ty
It’s absolutely the worst way of looking at it. None of their sources are guaranteed. Back ups of back ups. Siblings contesting stuff can drag it out YEARS. Ffs
I agree with this . And the whole thing of waiting for some relative to die so that you can live is in and of itself really distasteful. Not suggesting this couple is doing this at all, but too many do. It’s really awful and brings about a lot of kind of disgusting behavior. Even in the best families, spouses also have say and all kinds of behavior starts to show up. It’s not a good scene. Ever.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
I appreciate your guests who are willing to lay out their financial life for all to see because we can recognize ourselves in these scenarios including all the what-ifs, uncertainty and anxiety. Being vulnerable to do this is immensely helpful to viewers, even though immediately some opinionated viewers start shaming and criticizing these normal people who are just trying to help others. I hope this doesn’t damper others’ willingness to go through this exercise with you. Nobody else is doing this on RUclips and it’s more helpful than talking generally or with generic case studies.
No judgement, just sharing my experience. My parents were very, very clear from day 1 that there would be no inheritance. This, among other lessons, forced all of us onto our feet. I have had several friends over the years who inherited trust funds (and not huge trust funds) just enough to kill any self-reliance in them. I can’t think of one who actually benefitted from this windfall, and several really messed up their lives with the money. I do think it’s generally a huge mistake to lead anyone to believe they are going to inherit money. For this reason I will not do that. Odds are I will leave something to certain people, just not enough to change their lives and certainly without letting them know it’s coming.
that's really interesting. The trust fund recipients I know (3), are all the most monetarily responsible people, and financially educated folks I know. Actually, they're my inspiration for building enough wealth to leave some sort of inheritance to my own kids.
The thing is...even though it sounds like a very nice inheritance, you just don't know if one, or both, of her parents might end up needing nursing home care. Two years in a NH, for each of them, would put a huge dent in that $750,000.
It sounded to me like the actual pot of money may be valued at ($750k)X3 because I thought I heard her say she had 2 sisters. So just to throw a scenario out there, if the parents did go through $750k that would leave $1.5M split among 3 beneficiaries which would be $500k or $250k less. I do agree with you though there is never certainty with these matters.
New vehicles in the US are an unfortunate necessity due to the expense. It’s unlikely I’ll ever buy brand new again. Since I’ll be buying with cash, a 3-4 year old vehicle is a better option hands down. I avoid the serious depreciation of the first few years at the expense of not having every option I might desire. So far, it’s been a successful strategy for me and my kids. It does take much more shopping, negotiating and cash upfront.
Another "Never Count on:" The value of a property when time to sell. We had a condo in a great location, put it on the market for $50K more than it sold for. We're thankful that it didn't need any major repairs in the year that it sat on the market. James, great video as always. Good to see that you've traded your fluorescent tan for a little sunburn.
James, this is quite good. It's a great insight into what a financial plan actually is, how a planning session goes, the value of an advisor/planner and so much more
An inheritance is a gift. It is not to be expected nor should you stick your nose into the grantor's financial affairs. It is NONE of your business until the person passes and the estate is settled. As others here have mentioned, you plan for NO inheritance and maybe you are surprised by a gift.
This was a very instructive episode. I'm sure they left with a better focus as James identified the more impactful variables. Most importantly they appear to be able to face and work together on their retirement dreams and challenges.
My only caveat i would have for this nice couple is are they sure about this inheritance. Its ok to trust theirr parents about this inheritance but i would VERIFY that this is going to happen? I learned this painful lesson from own experience. I would verify this inheritance by looking at any wills and trusts in black and white on paper. Then, youll be shocked what type of estranged family comes out of the wood work to claim part of the inheritance. The nicest family members and their spouses can easily turn when dollars signs start being seen. Trust your parents but verify
I suspect she is very confident since she said she has been helping her parents with their finances for a while. Seems like she has a solid understanding.
Too many assumptions. We may get an inheritance. We may sell our condo. We may find part time work. Many older people struggle to find any type of work. What makes them think they’ll easily find work? What if her parents live 10 more years over their expectations? What if the condo needs urgent repairs in common areas requesting a $80,000 fix? Condos can send people bankrupt. Sell the condo and keep the home. Or sell both and buy a home. What’s the point of retiring if you’re still working part time? Keep working 3 more years, save up then retire comfortably. If you don’t lose your job. Good luck.
James what probability of success percentage do you like to have most clients at for a minimum? Roughly… They should talk to a mortgage broker about getting a mortgage once they no longer have income. Consider living in the condo for 2 years and then selling it to avoid paying any taxes on the gains which I’m sure they’ve had due to the most recent housing price increases.
First of all thanks to the couple for sharing the details! Can the couple be in better position to delay housing adjustments by 5 years or so? I am curious to know how the plan will look. They will still be able to achieve many of the life goals and may be in a better position to know about the inheritance.
James I hope you-and I hope that you will encourage the couple to read through the comments to this video-you will read through the comments. There is a consistent theme: NEVER count on an inheritance. Her parents could live to a 108-I have two friends whose grandmothers lived to 108. Her parents could become very feeble and require expensive long term care. A sibling could take ill and the parents could funnel loads of money toward that sibling. Or the contested will. Or Or Or. I say this as an investor who takes the 30-50 time horizon and who is willing to ride out a 10 year bear market. There are risks you can't control and risks, which although you can't control them, you can expect them and plan for them (looking at you inflation and market swings). An inheritance is gambling. I don't gamble with financial planning.
What’s it look like if she takes social security at 62 and he takes it at 70? That could help cash flow in the early years while maximizing the survivor benefit. Along with other comments, I wouldn’t count on inheritance.
Just my opinion. James has good advice. He sounds like he doesnt want to consult at all. He needs to find what he enjoys for a small income. I would sell the condo right away and cut the risk out. Managing a condo in a long distance location would be a hastle, even with property management. I would never count on the $750k inheritance.
Regarding the inheritance you may be confident about the amount but your timing could be off a decade or more. Withdrawing over a third of your portfolio in the first 4 years would terrify me. If it was me, I would wait until age 62. 2.5 more years of salary and 2.5 years less of paying for medical benefits on your own. I think this would allow you to forget about part time work and retire full time. Social Security: Beth collect at 62 for the income and medical insurance costs; Matt collect at 67/70 to maximize Beth’s survivor benefits. If you have never managed rental property cut your net income estimate in half, stuff always comes up. Good luck
You shouldn’t count on an inheritance, but you might need to plan for it if you might inherit a IRA, that can affect your taxes when you take distributions over 10 years. So it might be a good idea to do Roth conversions before you inherit the money.
Oft! Depending upon an inheritance would make me supper nervous. Unless those assets are properly secured in an irrevocable trust, that inheritance can evaporate with a long term care event. There would be nothing you can do about the 10-15K monthly expense of taking care of an ailing parent.
What if Beth’s parents require in-home care in their final years? It can potentially costs $100k-$150k per year. Their wishful inheritance can be dissolved in a few years! Pls don’t rely on future inheritance in your retirement planning! The last thing you want is to “blame” your parents not leaving you money and causes hiccups to your retirement especially when their parents passed long after they quit their jobs!
James love your videos,but I think you missed something. Keep it simple, what's most important?Ditch the condo,look for there new house in next 2 years, sell old house. Maybe count on 50% of inheritance 2 years later than expected, only for analyzing numbers.
A brother wants to live in inherited home. If he buys me out, do I pay tax on that money? If not, would he have to provide any kind of form stating that money is from house inheritance?
How would you inherit a pension? How do they know what long term care may be needed at $14k a month? It sounds like both parents are still alive so the risk is high that they may need more of that money before it passed down.
Another great video. I know it isn't the point of this video but they could cut that cost by 250/mth by just not buying a new car every 10 years. I mean sure if you have money to burn, do whatever but a car is the worst way to spend money. I have just never understood just getting a new car to get one, especially if you don't really have the money. 20 years/200k miles is the minimum I keep a car and it is usually 25-30 years. Just buy a decent/reliable car and do basic maint. and it should last. As far as inheritance , I would have looked at it like I have for SS. Assume it doesn't exist until you get it. If you can survive without it and you happen to get something great, it just makes it easier, then. I definitely agree with having an inflation resistant cash equivalent investment, ideally to cover 3-7 years of market down turn, depending on what you can financially afford.
Never expect an inheritance. Never
That's a sign they never prepared. Only person to save you is YOU. I told my mom, "use all your money if it helps you enjoy life. I could care less if you leave me a penny. A heart felt note would be worth so much more."
With regard to inheritance and retirement I've always assumed I would inherit nothing and planned for funding retirement completely from my own savings and investment. That way I can care for my aging parents and help them manage their money without feeling any conflict about how they need to or choose to spend the money they worked hard their whole lives to earn. If I do inherit money I may end up having worked longer than I needed to but I'd rather have that problem than feel dependent on my parents leaving me money.
Exactly!
I used to tell my mother: Enjoy the money, you earned it. Just leave me enough for your funeral.
Same!
This is exactly what I did. This ends up being a big conflict when children have always expected a windfall. It’s fraught with problems.
That's not really a plan. A truly useful and informative retirement plan must include every single known factor. This is why an effective retirement plan is a living document that is re-evaluated every few years to factor in new data or changing assumptions, as changes will surely happen. Similarly, some people don't include Soc Sec in their retirement planing out of fear that it won't be there, even though there is no evidence that Congress won't fix it in the 11th hour like they always do. When it comes to inheritance, I think the best policy is open communication, so there are no surprises. Talk to your parents about their finances regularly, so you can be forewarned of any change in their situation or intentions.
Your first mistake is expecting an inheritance. Never expect....just appreciate it if you get one. Second, always plan as if you're not getting an inheritance. Then if you do get one then it's just a bonus!!!
Just a note to say thank you to this couple for sharing their journey. The questions around inheritance are very emotive and will get a lot of reactions, none of which are about this couple. Many of us are in this same phase with our parents and it is a topic that produces a lot of opinion. It’s super helpful to show it in this way and this couple has done us all a favor being so open about their own thought process and situation. Ty
It’s absolutely the worst way of looking at it. None of their sources are guaranteed. Back ups of back ups. Siblings contesting stuff can drag it out YEARS. Ffs
I agree with this . And the whole thing of waiting for some relative to die so that you can live is in and of itself really distasteful. Not suggesting this couple is doing this at all, but too many do. It’s really awful and brings about a lot of kind of disgusting behavior. Even in the best families, spouses also have say and all kinds of behavior starts to show up. It’s not a good scene. Ever.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
I appreciate your guests who are willing to lay out their financial life for all to see because we can recognize ourselves in these scenarios including all the what-ifs, uncertainty and anxiety. Being vulnerable to do this is immensely helpful to viewers, even though immediately some opinionated viewers start shaming and criticizing these normal people who are just trying to help others. I hope this doesn’t damper others’ willingness to go through this exercise with you. Nobody else is doing this on RUclips and it’s more helpful than talking generally or with generic case studies.
Another great video. Thank you for the real life scenario interviews.
No judgement, just sharing my experience. My parents were very, very clear from day 1 that there would be no inheritance. This, among other lessons, forced all of us onto our feet. I have had several friends over the years who inherited trust funds (and not huge trust funds) just enough to kill any self-reliance in them. I can’t think of one who actually benefitted from this windfall, and several really messed up their lives with the money. I do think it’s generally a huge mistake to lead anyone to believe they are going to inherit money. For this reason I will not do that. Odds are I will leave something to certain people, just not enough to change their lives and certainly without letting them know it’s coming.
Well said.
that's really interesting. The trust fund recipients I know (3), are all the most monetarily responsible people, and financially educated folks I know. Actually, they're my inspiration for building enough wealth to leave some sort of inheritance to my own kids.
Great series. Keep up the good work James. Might be interesting to look at someone or a couple around 20 years away from retirement.
The thing is...even though it sounds like a very nice inheritance, you just don't know if one, or both, of her parents might end up needing nursing home care. Two years in a NH, for each of them, would put a huge dent in that $750,000.
It sounded to me like the actual pot of money may be valued at ($750k)X3 because I thought I heard her say she had 2 sisters. So just to throw a scenario out there, if the parents did go through $750k that would leave $1.5M split among 3 beneficiaries which would be $500k or $250k less. I do agree with you though there is never certainty with these matters.
New vehicles in the US are an unfortunate necessity due to the expense. It’s unlikely I’ll ever buy brand new again. Since I’ll be buying with cash, a 3-4 year old vehicle is a better option hands down. I avoid the serious depreciation of the first few years at the expense of not having every option I might desire. So far, it’s been a successful strategy for me and my kids. It does take much more shopping, negotiating and cash upfront.
Another "Never Count on:" The value of a property when time to sell. We had a condo in a great location, put it on the market for $50K more than it sold for. We're thankful that it didn't need any major repairs in the year that it sat on the market. James, great video as always. Good to see that you've traded your fluorescent tan for a little sunburn.
"Risk is what's left over after you think you've thought of everything" is a quote attributed to Carl Richards. I was thinking it was Morgan Housel.🤨
Really digging the new format.
James, this is quite good. It's a great insight into what a financial plan actually is, how a planning session goes, the value of an advisor/planner and so much more
An inheritance is a gift. It is not to be expected nor should you stick your nose into the grantor's financial affairs. It is NONE of your business until the person passes and the estate is settled. As others here have mentioned, you plan for NO inheritance and maybe you are surprised by a gift.
This was a very instructive episode. I'm sure they left with a better focus as James identified the more impactful variables. Most importantly they appear to be able to face and work together on their retirement dreams and challenges.
My only caveat i would have for this nice couple is are they sure about this inheritance. Its ok to trust theirr parents about this inheritance but i would VERIFY that this is going to happen? I learned this painful lesson from own experience. I would verify this inheritance by looking at any wills and trusts in black and white on paper. Then, youll be shocked what type of estranged family comes out of the wood work to claim part of the inheritance. The nicest family members and their spouses can easily turn when dollars signs start being seen. Trust your parents but verify
You have NO right to nose into the supposed grantor's financial affairs. None of your business.
I suspect she is very confident since she said she has been helping her parents with their finances for a while. Seems like she has a solid understanding.
My father hasn’t talked to his sister in 25 years due to disagreements over my grandmothers estate. People get real weird and petty over inheritances.
Thanks, Matt and Beth! I appreciated all of the nuances and caveats you shared with us during your planning.
I love this series ❤
Too many assumptions. We may get an inheritance. We may sell our condo. We may find part time work.
Many older people struggle to find any type of work. What makes them think they’ll easily find work?
What if her parents live 10 more years over their expectations?
What if the condo needs urgent repairs in common areas requesting a $80,000 fix? Condos can send people bankrupt. Sell the condo and keep the home. Or sell both and buy a home.
What’s the point of retiring if you’re still working part time?
Keep working 3 more years, save up then retire comfortably. If you don’t lose your job. Good luck.
Yup..... but they are chomping at the bit.....and I can relate to that phase.
So love these! Good luck guys!!! 🎉
Convert to Roth before soc sec and medicare start. Account for the taxes on the conversions in your plan.
James what probability of success percentage do you like to have most clients at for a minimum? Roughly…
They should talk to a mortgage broker about getting a mortgage once they no longer have income.
Consider living in the condo for 2 years and then selling it to avoid paying any taxes on the gains which I’m sure they’ve had due to the most recent housing price increases.
First of all thanks to the couple for sharing the details! Can the couple be in better position to delay housing adjustments by 5 years or so? I am curious to know how the plan will look. They will still be able to achieve many of the life goals and may be in a better position to know about the inheritance.
James I hope you-and I hope that you will encourage the couple to read through the comments to this video-you will read through the comments. There is a consistent theme: NEVER count on an inheritance. Her parents could live to a 108-I have two friends whose grandmothers lived to 108. Her parents could become very feeble and require expensive long term care. A sibling could take ill and the parents could funnel loads of money toward that sibling. Or the contested will. Or Or Or. I say this as an investor who takes the 30-50 time horizon and who is willing to ride out a 10 year bear market. There are risks you can't control and risks, which although you can't control them, you can expect them and plan for them (looking at you inflation and market swings). An inheritance is gambling. I don't gamble with financial planning.
What’s it look like if she takes social security at 62 and he takes it at 70? That could help cash flow in the early years while maximizing the survivor benefit.
Along with other comments, I wouldn’t count on inheritance.
Just my opinion. James has good advice.
He sounds like he doesnt want to consult at all. He needs to find what he enjoys for a small income.
I would sell the condo right away and cut the risk out. Managing a condo in a long distance location would be a hastle, even with property management.
I would never count on the $750k inheritance.
Regarding the inheritance you may be confident about the amount but your timing could be off a decade or more. Withdrawing over a third of your portfolio in the first 4 years would terrify me. If it was me, I would wait until age 62. 2.5 more years of salary and 2.5 years less of paying for medical benefits on your own. I think this would allow you to forget about part time work and retire full time. Social Security: Beth collect at 62 for the income and medical insurance costs; Matt collect at 67/70 to maximize Beth’s survivor benefits. If you have never managed rental property cut your net income estimate in half, stuff always comes up. Good luck
You shouldn’t count on an inheritance, but you might need to plan for it if you might inherit a IRA, that can affect your taxes when you take distributions over 10 years. So it might be a good idea to do Roth conversions before you inherit the money.
Oft! Depending upon an inheritance would make me supper nervous. Unless those assets are properly secured in an irrevocable trust, that inheritance can evaporate with a long term care event. There would be nothing you can do about the 10-15K monthly expense of taking care of an ailing parent.
What if Beth’s parents require in-home care in their final years? It can potentially costs $100k-$150k per year. Their wishful inheritance can be dissolved in a few years! Pls don’t rely on future inheritance in your retirement planning! The last thing you want is to “blame” your parents not leaving you money and causes hiccups to your retirement especially when their parents passed long after they quit their jobs!
Never assume
I wouldn’t retire with the savings they got so far. They should work til at least age 65.
James love your videos,but I think you missed something. Keep it simple, what's most important?Ditch the condo,look for there new house in next 2 years, sell old house. Maybe count on 50% of inheritance 2 years later than expected, only for analyzing numbers.
I really wanted to see a scenario where they took SS early.
Why not sell the condo and use that money towards your other house? That plan based on inheritance seems scary. I would lower my expenses.
Lots of opportunity for this plan to fall apart
A brother wants to live in inherited home. If he buys me out, do I pay tax on that money? If not, would he have to provide any kind of form stating that money is from house inheritance?
Haha such an engineer I love it
How would you inherit a pension? How do they know what long term care may be needed at $14k a month? It sounds like both parents are still alive so the risk is high that they may need more of that money before it passed down.
Can you share what software you are using in this video?
It's on their website. You can use their license if you purchase their advanced course which as of today is 300 dollars.
Another great video.
I know it isn't the point of this video but they could cut that cost by 250/mth by just not buying a new car every 10 years. I mean sure if you have money to burn, do whatever but a car is the worst way to spend money. I have just never understood just getting a new car to get one, especially if you don't really have the money. 20 years/200k miles is the minimum I keep a car and it is usually 25-30 years. Just buy a decent/reliable car and do basic maint. and it should last.
As far as inheritance , I would have looked at it like I have for SS. Assume it doesn't exist until you get it. If you can survive without it and you happen to get something great, it just makes it easier, then.
I definitely agree with having an inflation resistant cash equivalent investment, ideally to cover 3-7 years of market down turn, depending on what you can financially afford.
Her father could gift property before he dies and they wouldn’t have to pay taxes no?
Lol no