The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: rob in cal on October 10, 2017, 10:52:20 AM
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I think in our case we actually have inherited about 63k, in different installments over the last 25 years. In our case it has mostly been in laws who wanted to help one of my wife's sisters so they gave equally to all. And also an inheritance from my grandmother. Having invested basically all that money (last gift in about 2010), it does represent a nice chunk of all of our assets, factoring the compound growth over the years. Thank you, in laws.
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We have received 0% inherited wealth. (Excluding the tremendous benefits of having parents who weren't living paycheck to paycheck, who were able to take the time to ensure we understood things that we were struggling on in school, who read to us, and who weren't stupid - genetically that makse a difference.)
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We have received 0% inherited wealth. (Excluding the tremendous benefits of having parents who weren't living paycheck to paycheck, who were able to take the time to ensure we understood things that we were struggling on in school, who read to us, and who weren't stupid - genetically that makse a difference.)
+1
Same for me.
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When my father died in 1995 I inherited a modest sum in theory. But by testament, my mother can use it up the way she wants. I can only claim it if she would remarry.
So we have never received an inheritance. In my FIRE spreadsheet I have counted on nothing. But in practice we do expect to receive a windfall in the far future when my mother ever dies or when my parents in law die. I just don't dare to count on it for sure, because you never know whether the parents suddenly decide to give it all so someone else.
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Nothing actually inherited, and not planning on it either.
My folks are financially sound (not quite FI yet, but in 3 years they will be). Should both parents die peacefully with minimal medical intervention, my brother and I stand to split a few hundred thousand, at best. It's likely that those funds will be drained if they need assisted living in their later years. Neither of us have really thought much about it.
My in-laws: Super low net worth dangerously close to retirement age. If we see anything from them, I'll be extremely surprised.
I did live a home rent free for a couple of years which allowed me to shovel cash into paying off my massive student loan, so yeah, there's my "inheritance."
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$0 inherited to date. Anticipating that number to remain the same unless someone wins the lottery or something similar.
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Not at all. Our families won't have anything to pass on. Indeed, we've helped support them during times of unemployment, etc.
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Zero. We actually spent over 100k helping out parents.
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Another in the negatives. I have given them money rather than them giving me money.
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I will most likely inherit a sizable sum when my parents go, but should be FIRE'd well before then. Shouldn't impact my FIRE date at all.
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Zilcho.
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I haven't REd yet, but have reached my FI goal. Zero inheritance so far. My dad died a few years ago and left everything to mom. She's got a nice sum to live on, but could live another 20 years and spend most or all of it. I'm not counting on any inheritance.
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0
My parents rent a few properties in the UK and have been retired 10 years. Last month was the first time they saw a month that was cash flow negative (and they do a lot of travelling). If they were to die with a small amount of medical expenses then its safe to say that I could easily end up with a very large amount.
by the time I get it i'm hoping to be in a position where its totally unnecessary and will be used as some sort of legacy (establish some education funds / seed money for grand kids).
I hope that day is a long way off.
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I inherited about $10,000 from an aunt in my mid-20's. I wasn't strategic about it at all.
My wife received a six-figure nut from a grandparent when we were still dating. It enabled us to always avoid paying PMI on the houses we've bought over the years.
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The only money I have ever inherited was $500. Used it towards buying the great little car that would drive us literally to better financial pastures. I was under strict rules from my grandmother that we should spend it on something fun because that's what our grandfather would have wanted. Yeah well, he worked until the literal day he keeled over in his office and died for all intents and purposes later in the day at 79 years old. He was insanely deep in debt (because he insisted on having the best and newest of EVERYTHING), nothing saved for retirement, and was one of the reasons I was, and still to an extent am, turned off to entrepreneurship. I knew right away not to piss away the money and my family ended up way better for it.
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My grandparents passed away in my early 20's. My parents said "We're already set, this would do you more good than it would for us." and gave me $20,000 which I used toward the down payment on my house. I have since repaid them, but that big of a boost at that time in my life was a big help.
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Zero here so far. There's a possibility of maybe $50k from my MIL, and perhaps $150k from my parents as things stand right now, but we certainly aren't counting on anything.
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I'll break up this parade of zeros. Undergrad was paid for, I went instate and graduated in 7 semesters so that was worth probably $70k 10 years ago. When my grandparents passed away I inherited about $100,000; I used a substantial portion of it to buy my first house. In 4 years the house has increased ~$250,000 in value, additionally the down payment allowed me to avoid PMI. These two things knocked years off the FI equation, I hope to be able to do the same for my son.
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Another zero. My parents were young when I was born and I expect either or (I hope) both of them to live until I'm in my seventies. None of my grandparents had two farthings to rub together. I suspect that if I'm OK financially my parents will choose to bequeath directly to my children to avoid the risk of "their" money ending up with my husband's children from his first marriage if I predecease him.
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My parents paid for my college tuition, the part that wasn't covered by scholarship and 500/semester living expenses (total of 36K, late 80's). This allowed me to graduate with no college loans, which was a big benefit. Ditto for growing up in a nice safe suburb with good public schools. I also inherited a coin, my share in the coin being around $700 (spent on fun stuff).
Otherwise, there is nothing to inherit on my side of the family unless my mother immediately pops off after selling her house (she comes from hardy stock and is more likely to out-live her money). Father rents and if anything has some medical debt.
I do give money to my mom, just to help her out.
My ex husband has been given gifts of money, the largest being 5500? earmarked for the kids, so it was divided into their college accounts. It's possible that he may end up inheriting something from his side of his family, but then again they all seem long-lived and there are too many variables, in particular medical expenses, to really count on anything.
I guess my only regret is that both of my parents did get inheritances from their parents or grandparents (Mom about 40-50K, Dad about 140K), which did seem helpful, but still somehow managed to end up with nothing to show for it. I think that's in part why I am financially conservative and save for retirement.
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No actual inheritance to date and as parents are still young I'm hoping there won't be one for a long time. I did however receive generous birthday/christmas gifts from grandparents to the tune of around 1000€ per year and a one time "early inheritance" of 5000€ also from grandparents after finishing my bachelors and will receive another 5000€ after finishing my masters. Cousins that finished education already received the second installment and my grandparents make sure to keep everything very fair, which is why those 5000€ are fairly certain. They believe in giving away before they die because that way they can see the money being put to good use. They enjoy hearing about the experiences it allows their grandchildren to have which they did not get to experience because the times were different in Germany when they were young. Until 2 years ago I mostly used those gifts for travel, since then it is mostly being invested which especially my grandma is also interested in.
Oh and no need to worry about my grandparents running out of money because they're giving it away to their grandkids. Even with those gifts they're still cash flow positive because of rental properties.
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I got about $10k when my dad died 10 years ago.
My grandfather's second wife died last year. My mother died before she did, so I got 1/3 of my mother's portion. Which was...oh I don't remember. $8k? $10k?
Didn't affect FI at all.
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$0 and will stay this way. I already told my parents to use up all their money because anything left behind will be donated to charity under their name.
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$37K at age 18, $20K at age 31, and $7K at age 37. So $64K total.
Most all it has been used for house downpayment, major house repairs, emergency savings account, starting IRA's and 1 kick ass 6 month trip taken in my younger days.
I have been greatly helped by inheritances, not necessarily b/c the amounts were so high, but because the ages I was when they came. Starting off young adulthood with a wad of cash was a huge help in a way that it would not have been if I had gotten them later.
I suspect my parents will be leaving me a somewhat decent amount depending on what the nursing home situation ends up being. I'm very grateful for what I got and am not counting on getting any more.
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I've gotten a huge leg up from family, in both dollar amounts and in security.
I got a few thousand dollars when my grandparents passed away, which my parents put toward my tuition.
My parent paid for all of my undergrad costs that weren't covered by scholarships or my part-time lab job, as well as giving us $10,000 for our wedding, AND handing over the $20,000 they'd saved up for my college, which we used as a downpayment on our house and to pay off my husband's remaining car loan. They were apparently in a good enough place financially by the time I went to school that my dad just paid for it instead of digging into savings. They've also paid off their mortgage and made sure they're set for retirement, so I don't have to worry about them ever being destitute. It's a huge load off of my mind, especially after reading some of the family horror stories on the forums. I don't know if they'll leave me anything, but I'd much rather they live for a long time and have a good life in retirement than give me their money.
My husband will inherit from a trust from his grandfather in the low 6-figures in 7 years or so. I don't ever count it in our net worth or FI calculations since it isn't officially ours yet, but if my math is right, we'll have enough saved by then that it would bump us well into FI territory. This trust also covered his undergrad costs, so we were both lucky enough to start off with no college loans.
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Zero. My Mom lived to be 90 and luckily was able to spend her $ traveling and having fun. She pre-paid all funeral costs and told us to sell her car and take everyone to a nice lunch which we did.
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My grandparents contributed to my college fund starting when I was born, and at every birthday. As a child I got these checks and dutifully handed them to be mother to be deposited. I never saw this account, but at 15 my father withdrew the money and he invested in on the market. He was a construction worker and he began taking night classes to learn about investing. My family used my college fund as leverage over me a lot when I was a teenager.
At 18 I went into the US Navy, at 24 I got out and went to college on the GI-Bill. At that time my father gave me my stock, I had $750 of GTE stock. After all those years of carrot-on-a-stick BS, my college fund was less than a single paycheck. Thankfully my GI-Bill was enough for 4 years of college.
After college I went back into the Navy, and I got married. My wife was orphaned when she was 12. At that time, her uncles donated to a 'hope chest' for her. Saying that when she got married she could have it. After 5 years of marriage, we went to visit one of her uncles specifically to get this investment. As it turned out, they had placed cash in a safe deposit box, and let it sit there for 15 years. It was around $200.
In the 1990s my grandparents passed away and I got $5,000, which we put against one of the apartment complexes that I had bought on my own.
I retired in 2001, at 42 years old, with a Navy pension. At that time, I had owned a series of four apartment complexes that I was able to buy on my Navy salary. I merged their equity into a single property and used that equity to buy a farm in the woods, all with cash, no mortgage.
Around 2005 my mother passed away, and I got $16,000, which we put make improvements to our farm.
In 2016 after 15 years of retirement living the life of an off-grid organic farmer, in the forests of Maine. My Sister-in-law passed away. She was a corporate exec of a publishing firm in DC [$250k+ salary and multiple healthy 401Ks]. Suddenly at 58 years old there is an inheritance of note. We bought a commercial building in a downtown block of a state university town, we are remodeling it into an apartment complex.
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DH inherited $10k from a great aunt, a portion of his mother's share. I'd been considering using it to pay down the mortgage somewhat, when his employer went out of business. He opted to go back to school while he had unemployment and retraining assistance, so we sat on the inheritance for a while as an extended EF. Never needed to touch it, and by the time he was settled in a new career I had earmarked some other snowflake money towards the mortgage pay down. I believe ~$15k in a lump sum knocked 8 years off our mortgage in one fell swoop.
I had written out an amortization schedule on the back of an envelope, so I could easily see how much progress we were making in clearing the mortgage out early. I could see that the sooner I paid extra, and the more I paid at once, the faster my progress. It encouraged me to be bold: I tried to at least add an extra month's principal to each month's payment, and big lump sums like tax refunds annually, rounding up as much as possible. That led me to figuring out how to maximize our tax credits, to get more to put down.
Once the mortgage was gone, 15 years early, I boosted DH's 401k contributions, and put the refunds to Roth IRAs. Little tweaks for years had snowballed into a serious savings rate for retirement.
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Zero.
We grew up fairly poor, my father is still pretty poor (living on a pipe fitter's pension, and car on pedestrian settlement), mom is dead, step-dad has a stash that should keep him off the street and is not likely to die any time soon (knock on wood).
I did benefit from a decent upbringing that emphasized education, but we were always at or below paycheck to paycheck despite a LCOL. We had a lot of stretches of living student loan to student loan, or losing paychecks shortly after finally paying off racked up credit cards from the last family calamity. I came out of it with frugal tendencies and a strong aversion to debt, for which I am very thankful.
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We have been incredibly fortunate with inheritances. I grew up in a solid middle class setting and was frankly shocked when my third of my parents estate amounted to around $180K. On my wife's side, her mother passed and left around $300K. We have been informed that via an aunt that passed recently we may be receiving another inheritance.
With these very significant windfalls, we have paid off the mortgage ( we live in a modest house for our area). We have 3 kids currently all in college, we are using the inheritance money to put them through college.
We plan to set up college savings plans for future grandchildren. Basically pass it along.
The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
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0
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Zero inherited so far and not really expecting anything either. My dad lives on SS and whatever his wife gets for retirement/SS. My mom may leave a little something to us three remaining kids but I doubt it would be much of anything. I don't need it or count on anything though since I've been FIRE for almost a year now.
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None so far.
I have two living parents in their 60's and four living grandparents in their 90's. If they all died today I would get around $750k and could retire instantly. But considering they are all in at least decent health, I can't count on it.
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My grandma died my junior year in college and left me about $3k. Conveniently, that and a summer job was enough to cover my first year of law school. I'd obviously have managed if I had needed to take a loan, but it was very nice knowing that I wasn't in hock if I didn't like it.
I inherited $50k when my stepdad died a few years ago. I am embarrassed to report that it is still sitting in my savings account; it's the last thing he will ever give me, so it feels like I should use it on something meaningful, not just toss it in with everything else. But I haven't found anything sufficiently special or memorable to use it for -- because, duh, stuff is just stuff and is thus unworthy as a permanent memorial. As a result of my paralysis, the money has helped me not one whit towards FIRE.
I will likely inherit a significant chunk from my mom. But given that she had me at 19 and still runs 5ks in her 70s, it's more like "old age insurance" than "FIRE-enabler."
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I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
^^+1
We have also been fortunate with inheritances. In 2010 my wife's mom died, and we got $80K, which we used to put an addition on our house. In 2015 my dad died and we got another $80K, which we added to our investments. In 2016 we sold everything and FIREd with $900K. So, the $160K in inheritances ended up being about 18% of our total net worth. Eventually we would've made it to FIRE, anyway, but those two cash infusions over the past 7 years helped out significantly.
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$0
I come from a long line of poor people. Just glad i didn't start my independent years with any inherited debt. Some of my friends had their identities stolen and abused by their parents before they were 30 and spent years digging themselves out of their parents asshole behavior.
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- College Tuition for my wife was covered by parents...four years at state school.
- Wife's great uncle left us 60k when we were about 25 years old. We stuck it in the bank and it sat there earning no interest for years, but at least we spent none of it. Now that we understand how FIRE works, we have a plan. Because we both have access to 403's, 457's, and a Roth IRA due to being teachers, we can shelter 83k/year combined. So, we are doing that, and are currently living off the remainder of our paycheck and that 65k until the 65k is gone. We think we can keep this level of savings up for about 2.5-3 years before it's gone, and we'll then probably save about 65k/year instead.
- Other non-money privileges. My parents are entrepreneurs, and my wife's parents were both teachers. The unearned privilege we got from being born in the USA to white, educated, relatively wealthy parents is definitely the most important leg up we have had.
Expected Inheritances -
From DW's father - Nothing.
From DW's mother - somewhere between nothing and a half-million. She's frugal, but has genes to live till she's a hundred:) Hopefully she lives to be a hundred, she's a wonderful person.
My Parents - Hard to say. I'm one of four kids. I'm not the one who will take over the family business. It will depend on how the transition of the business works out financially for my parents, how long my parents live (again, hopefully for a long time) and so many other factors)
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Directly, nothing. I left work in November 2015, officially FIREd in February 2016, and my Mom died in June 2016. I received my share of her life insurance which I stuck in the bank and have used to avoid selling investments to live on.
My Dad is 81 and reasonably healthy. When he dies, I'll receive my share of his estate, whatever happens to be left after his expenses. Could be a lot, could be zero.
Indirectly, I received a lot. My parents were financially capable, so they paid for my undergraduate and graduate degrees, my first car, part of my honeymoon, and part of our first house down payment. So I was able to get ahead without having things like student loans or PMI to deal with. I am appreciative and plan to pay it forward to my kids.
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We have been incredibly fortunate with inheritances. I grew up in a solid middle class setting and was frankly shocked when my third of my parents estate amounted to around $180K. On my wife's side, her mother passed and left around $300K. We have been informed that via an aunt that passed recently we may be receiving another inheritance.
With these very significant windfalls, we have paid off the mortgage ( we live in a modest house for our area). We have 3 kids currently all in college, we are using the inheritance money to put them through college.
We plan to set up college savings plans for future grandchildren. Basically pass it along.
The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
Thank you for the thoughtful response.
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I used to brag to people in my 20's that I would inherit quite a nice sum. My parents were frugal growing up, but now drive Mercedes... My Mom died 14 years ago and I went through a tough time. Nowadays, I'm the multimillionaire that is still quite frugal, and I'm quite glad my Dad is still around! Funny how life is, and much a win-win as I could hope for.
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I agree that there is are a lot of feeling of guilt and embarrassment around inheritances. I know I have a lot of hang-ups around knowing that I did not earn a lot of what I have and question if I deserve what I have.
Without the inheritances I've received: I would not have a paid off house, I would have student loans, I would not have a retirement account, I would not have the freedom to quit one job pursue self-employment and I would still have my best friend. Who I miss everyday.
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I got $10 or $15k from a grandfather when I was a teen. I blew it in college. It helped me zero, and in fact maybe even allowed me to delay maturing and making better decisions for a few years.
My dad essentially inherited his mom's house, which we then bought form him as our first home purchase. We were able to get the parent-child exclusion on property taxes which saved us a fair amount, and because the transaction was done without a relator, those savings were passed along to us. (Dad just wanted when he would have received after a regular sale.) I also don't know that we would have bought quite yet if that opportunity hadn't fallen in to our lap.
We've argued this next point here ad naseum, but I stand to inherit a large amount someday. (Most likely 7 figures.) We don't exactly count on it, but we don't totally ignore it either. It s a mental safety net to our FIRE plans, I guess. Hopefully we will be long FIREd before it comes to us, but it will absolutely be lifestyle-changing if and when it comes. What that will mostly mean will probably be more travel for us, and more to leave to our favorite causes when we die. (We have no kids and our current will leaves most of our estate to charity.)
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We did once receive a financial gift from my parents in law. That was approx 22K in the year 2000. We got it right after we had bought a house. We used to pay off the extra taxes that you need to pay when you buy a house. We had forgotten a bit about those and other extra costs when moving.
It was very convenient at that moment. Since then we have been saving more than twice that amount per year, so it did not make a real impact on FIRE.
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I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
I think you'll find most people here are happy to brag about their hard work / efforts that have realised gains, but regarding inheritances yes it's different.
I refrained from commenting here up to now, not out of guilt or embarrassment, but I recognise that not everyone is fortunate enough to have received gifts of significant size. Call it misguided sparing of feelings if you have to.
I have received a substantial sum from my parents already, and it is likely when they eventually pass, there will be a sum left to me which exceeds my total requirements for FIRE, (well after I FIRE, so in essence I'll probably have twice the stash I eventually need)
There is also the fact that many people will be comfortable taking about their own financials, but it's a step too far to start talking about other peoples financials (your relatives) if they have not given permission to do so.
Small matter of privacy and all those quaint notions from pre internet days.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
+1
I fully expect to be FIREd before either of my parents or my partner's parents die, so anything we happen to inherit will go to charity or to our children. It's looking like there may not be much from either direction, though, so even if we wanted to we couldn't plan on it.
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It depends on what you mean by 'inherited wealth'. E.g., A lot of peoples' parents buy them their first car/help with car expenses, etc. I wouldn't really consider that 'inherited wealth', though it definitely gives you a leg up in job opportunities.
On my husband's side, no financial support, apart from them purchasing him his first car in high school. Once he left at 18, he was self supporting in all ways.
On my side, nothing in HS other than the usual room and board.
After I graduated HS, there were 2 notable instances of indirect support that could not have happened if the parties involved weren't financially well off:
1) Loan free college. A wealthy great aunt paid my undergraduate tuition. 2 years at out of state rates, after which I worked to establish residency so I could stretch her gift to cover the rest. Also, during undergrad, my father gave me a small monthly stipend, just enough for me to make my cut of rent and groceries. I worked in the summer; and after my first 2 years, I worked part time all the way through school. I paid for 3 years of grad school by myself.
This was a HUGE help because it allowed me to not work as a freshman/sophomore during classes, but just focus on managing my class and study time and getting oriented to being out on my own in a different state. And I was able to graduate with no student loan debt.
2) My grandmother gave DH and me 10K after we finished graduate school, which we used as a down payment on a house. We were employed and stable by that point, but we were able to buy a couple years sooner than we otherwise would have.
That's it for big things. My parents paid for several plane tickets when I was a freshman and sophomore, helped out with particularly expensive textbooks (Kearney and Peebles for range management classes cost >100$ book back in the early 1990s ...ah memories)...and my Dad memorably snuck my POS car off to have new tires put on it when the old ones were messing the alignment up and I was temporarily out of a job right after graduation.
I feel very fortunate. I had substantial enough help to get me through freshman and sophomore years with minimum anxiety, and allow me to figure out how to build my cash flow and manage on my own by the time I graduated. And no student loans? That was HUGE. My youngest sister went to college much later, and initially did not manage her money as well. She ended up with the 'standard' 30K of loans and it is a huge drag on her finances now.
As to inheritance to come? Very possibly nothing. My father was worth several million a few years ago, but circumstances ate up more than half of that in less than 5 years and he is only in his mid 70s. Whereas ten years ago I might have anticipated maybe inheriting 200K, I know better now than to expect anything. I just hope his money lasts at this point.
ETA: As some people above have noted, we also now support some parental units in an ongoing way...I'd estimate maybe 50-60K spent so far and about 5K per year onging. So in a way, the free undergrad education I received is now being 'paid forward'...or 'backward' depending on how you look at it.
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I inherited 5.5 acres of a 100 acre farm, then purchased the balance from relatives. This was helpful as it lessened the amount needed to purchase the farm.
Otherwise, no other inheritances, but like many others have indicated I was raised by a very money savvy parent which was pretty priceless.
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My mom is 86 and her estate will be quite modest; I might inherit $50,000 someday. I've never planned on it or counted on it to make FIRE a reality.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
This.
Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.
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Ah, crap, I forgot the most important inheritance!! When my stepdad died, he set up a trust for the grandkids' college education; I think it is currently in the low-to-mid six figures. I didn't think of it, because we honestly don't plan to draw on it; my sister makes significantly less than us and has two kids to put through college, so I have been planning to preserve it for her. But realistically, my mom would be extremely hurt if we didn't use part of the money for my kids, so we will have to accept something.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
This.
Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.
Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
This.
Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.
Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.
Yeah, probably. In the context of the question - how did inheritance help you on the way to FIRE - I plan on being financially independent long before an inheritance is even a question. Like it seems like you dad received those inheritances in his 60s or 70s? I don't foresee needing to work at that age, so I imagine any inheritance would just be gravy.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
I was going to reply that I thought getting some form of inheritance was common, but what I've now read (see below), that is not correct. it is the norm NOT to receive any kind of inheritance. I think my views may be distorted because I live in a walk-friendly neighborhood that has become very popular, and many of my younger neighbors seem to have gotten help from their parents to get into their house, by gift or inheritance.
"About 8% of Americans get an inheritance of any kind — and those who do inherit will likely get less than $25,000 US Dollars (USD). Less than 2% of Americans receive more than $100,000 in inheritance. This data came from a study conducted by the Federal Reserve Bank of Cleveland" I also read that the average inheritance is 177K. However if they are simply averaging the sum of all inheritances and averaging across Americans, that paints a very misleading picture.
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My parents put me through undergrad without debt, which was much more possible because I went to community college in high school and only spent two years at a state university. I also got my first car from my grandparents that I upgraded to something more reliable in college with help from my parents. This is the only help or inheritance I expect to receive as an adult. I'm estranged from my father so I imagine his money will go to his awful, much younger wife and eventually to her daughter. I'm holding my breath for the day when my mother starts asking for money.
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Zero across the board. My parents pretty much lived paycheck to paycheck but we were always clothed, fed and had a roof over our head so thankful for that.
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I'd actually think that members here would not feel the least bit 'ashamed' or similar to mention an inheritance. This is a forum of badassity, not snowflakes, is it not? Why would one feel ashamed about their finances....unless they blew it on something silly...even then they'd probably admit it and accept the admonishment.
This board is filled with folks already FIRE'd or chasing it. That mindset tends towards a matter of fact / logical approach...not a whimsical one. Numbers are numbers...how do we make numbers meet a FIRE goal the fastest?
I inherited 10k from an aunt quite some time ago (15 years?). I actually saved every dime of it and it has probably contributed roughly $30kish towards my goal today.
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I inherited 10k from my grandfather, when I was 15 or 16. It was more money that I could really even imagine at that age, and I felt rich.
My dad helped me use 4k to fund 2 years worth of IRA (2k was the yearly max, way back then). I used 2k to fund a summer trip to Ireland and Scotland. The rest just kind of dribbled away and was gone by the time I was 19. I'd spent what I saw as a massive fortune. It was a very powerful formative lesson, and I'm pretty grateful.
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I inherited an old truck from my grandfather when I was in college, which served me well for about 5 years (no car payments for 5 years is pretty damn great). While on the surface it doesn't seem like much, it set me up for a lifetime of frugal decision making. I'm thinking that gift, when I received it, was far more impactful than any money I could have received from his estate.
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We have received some inheritance, mostly on my husband's side and related to the sale of a family farm which his father co-owned with his two uncles. Before we were married, one of my husband's uncles died (never married, no children) at kind of a young age. My husband and his sister each inherited about $40K in investments from his uncle's estate. Then a few years ago -- before his dad passed away -- his dad and mom decided they needed to do something about the farm because neither kid was a farmer and they felt inheriting it would be a burden. They sold the farm, put most of the proceeds into a charitable remainder trust to benefit lots of super-duper charities, and my husband received a $100K share in the transaction (which was related to his uncle's portion of the farm, before he died. It was complex farm tax stuff that we've never understood, to be honest.) Over the years -- under gift tax exclusions -- we also received cash when the farm has had a decent year. We've usually used these funds on our Roth IRAs and to significantly buy down our mortgage when we built our home.
In the past few years we've received a small gift from my grandfather -- around $15,000 -- which we used to fund Roths and buy investments. The day we accepted the check from him when he was 92 I told him, "Grandpa, someday I'm going to walk into the office on a random Tuesday and quit my job because I no longer have to work. And when I do, I will smile and think of you and thank you for this gift." That made him smile and laugh and I'm grateful he could give it to us while he was alive. (He's dead now.)
When my MIL dies we will inherit a significant, life-changing sum. But, to be honest, we don't factor this into our FIRE calculations and continue to save 50-60% and make plans without it. Still, it is always in the back of my mind. I think of it as a buffer if we need more cash in the future to buy housing (instead of borrowing in ER) or to help lighten the blow of post-retirement health care costs. It's hard to get my head around it, really.
I guess we've consistently used the money to buy our freedom and for the most part haven't spent it on stupid shit. I suspect that someday we'll have way more than we know what to do with, and we're already talking about how we will use it for charity and the common good. I look forward to the day when I can set up a donor-advised fund and basically give money away in my local community. I want to do it while I'm alive.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
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This is a really interesting topic. I am also surprised at the number of people who have posted about getting inheritances. I don't think there is a lot of shame surrounding them - or at least not that I'm aware of.
We have received zero so far. I know that I will get about ~$2,000 when my grandmother passes away, which won't affect anything significant. There won't be an inheritance from either of my parents (we're more likely to have to support them in their old age).
My husband might receive something from his parents given what they have earned over their lifetime, but given the aging history in his family, the fact that he will have to split whatever there is a few ways, and the fact that his parents are spendy (and fall for bad investment schemes....sigh), means it a) probably won't be much if anything, and b) definitely won't factor in to FI since we hope to be there long before either of them pass.
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I received $10,00 from my grandmother last year, and used it to pay off my HECS.
I haven’t received any extraordinary financial support from parents: did not live at home rent-free (moved out at 18), paid for my first car, my tuition, etc.
The handouts people my age expect and receive from their parents - eveything from cars to house deposits - still stuns me.
What happened to: leave home, get a job, pay your own way?
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No debt undergrad, about $20,000 from both sets of parents total for down payment on house, $500 from grandma. Best inheritance is teaching kids to not blow money. I’m a dentist, make 3 times what I need to survive, travel constantly, will be retired young. Half of that (the other half was me) was because I learned to be smart with finances from my parents and they helped me limit my debt. I’ll do the same for my kids. Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. I’m not saying that it should be split evenly between each grandchild but I would do something like this.
25% each child then 6.x% each grandchild. It’s a win for all and doesn’t “screw” the child over that just had one kid.
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Zero. We have never factored an inheritance into our financial lives. MIL died last week, and DH expects nothing by the time the estate is settled. We are in our 60's and FIR (not all that Early), so an inheritance is not going to change our lives much. I will probably inherit some from my Mom, but if she has to go into assisted living, her stache will get eaten up pretty quickly. If there is something left, I think I will end up passing most on to our son - maybe an educational fund for grandson, downpayment for a house, etc.
Like others, the greatest gift my parents gave me was an example of how to budget, and how to live a good life within that budget. DH's parents taught him what not to do - his Dad filed for bankruptcy twice that we know of, and died penniless a few years ago.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. I’m not saying that it should be split evenly between each grandchild but I would do something like this.
25% each child then 6.x% each grandchild. It’s a win for all and doesn’t “screw” the child over that just had one kid.
[[Citation needed]]
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My Dad died in debt. With my help, my Mom might manage to die penniless. They helped give me a great education, so there is that. I inherited some jewelry from my grandmother, and it is a fine keepsake. That is about it for monetary inheritance.
Inlaws gave us a couple cars and some money for my kid's college fund. Dad inlaw is still kicking, and I hope he has several years left.
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When I was born, there were all these houses, hospitals, schools, shops and roads around the place. Loads of really cool stuff had been invented, laws & education ensured that the other people around mostly co-operated with each other really well and there was no problem getting water, electricity, food etc.
If my ancestors (and those of other people) hadn't been so smart and hard working, I would never have got to the point where I could think about FIRE. So I guess inherited wealth helped me hugely on the way.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. I’m not saying that it should be split evenly between each grandchild but I would do something like this.
25% each child then 6.x% each grandchild. It’s a win for all and doesn’t “screw” the child over that just had one kid.
[[Citation needed]]
Yeah, I know a lot of grandparents who are quite stressed out by the additional grandchildren. Nonetheless, I do like your math.
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I inherited about 30,000 when I was 19 from my grandfather- but never saw any of it (It was some real estate that was to be split among me and my siblings. My father, as trustee, sold it and embezzled the money.) My parents did pay for my college and I had a wedding, paid for by them, where I received what I needed to set up housekeeping. My husband received nothing from his parents, my mother in law died in a nursing home on Medicaid- all her assets had been used for her care. His father died a few years earlier. Financial aid and his parents paid for most of his college.
I expect to inherit almost noting from my mother- she lives modestly, but I expect if she can no longer look after herself, then her house will have to be sold. I send her a small amount each month and another sibling pays some of her bills (cell phone). I've been able to put both my kids through school without them incurring any debt. That is all I expect them to receive.
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I have received a grand life total of $0 inheritance so far. I do expect to inherit something from my Mother eventually though, but I expect to be social security age before that happens, so it's not been a factor in any of my calculations anyways.
Funny, seems like everyone else I talk to gets generous inheritances every time someone even remotely related to them dies. Then they go and blow it all immediately and are back to being broke again in weeks...
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My grandmother died when I was in 8th grade and left a significant sum of money (~$750k) to my parents. My dad was an airline pilot and made a very good living at the time, so this was way above and beyond.
It's funny what happens when you receive a windfall - it's very easy to become a spendthrift. They added onto the house, put in a pool, redecorated, put in new floors, took us on a couple of memorable trips, and paid for our college educations in full, as well as private high school. However, even all of that doesn't come close to adding up to the total amount, and yet it was completely depleted within a decade from regular spending and an appetite for toys. Not only that, but they had gone into credit card debt, did a cash-out refinance, and secured two car loans in the process. They have since straightened out their budget and gotten on track, although their spending levels still make me uneasy. They've carried a lot of regret from blowing through that money so quickly - not so much at the loss of the money itself, but the fact that they lived so frivolously and have very little to show for it.
Before this time, my folks were diligent with their money, and I remember them meeting together every week to talk about their budget and using an envelope system to stay on target. Getting that kind of wealth so suddenly messes with your mind, and locks you into the hedonic treadmill if you indulge it.
As they approached 60, they really didn't have much saved up, but they did have a very generous pension from the airline (33 yrs) that saved the day.
Looking back, I am extraordinarily grateful for the education I received, especially since my wife financed her entire BS and MSW with debt. I'm also grateful for the memories that we made as a family on our trips, and the time we spent together. The bad that came from that was being ingrained from an early age that shiny gadgets are a mandatory part of life - something that I still fight. I have awesome parents who have always been there for my brother and I - my dad even flew the Super80 for over 20 years just so he could be home every night and choose his schedule around our lives rather than moving up to larger aircraft and making more money.
I also saw their story as a cautionary tale when it comes to windfalls - they were lucky in receiving it (in the sense of random chance, not in my grandmother passing away), and even luckier to survive the post-9/11 airline layoffs, and even luckier to retire two months before the airline declared bankruptcy and slashed pensions. Had any one of those things not lined up, they would both still be working, would have lost the house a long time ago, and life would have looked much different. I feel both a pull to do the same things that they've done, as well as a strong desire to learn from their mistakes.
I haven't received any direct inheritance from anyone, but know that if my parents don't do a repeat with their current retirement windfall, that we will likely receive a sizeable chunk some day. I hope that day is a long way away, and don't factor that into any of our retirement planning. Through MANY mistakes, years of grad school, low-paying jobs, and a few good decisions mixed with career breaks, we went from -$75,000 on our wedding day to a current NW of ~$120,000 over our first ten years. Trying to accelerate that as much as possible, while also having conversations with my dad about SWR, hedonic adaptation, and happiness so that we can both live to ripe old ages and leave something to our kids.
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Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.
And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?
Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.
TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.
I apparently am one of the few folks on here apparently that has had a life-changing inheritance (or at least is willing to admit to it). I received an inheritance that made me instantly FI, and within 2 years after (to figure out how investing works and get all the ducks in rows) both my husband and I retired.
And while I did not hope for or expect a single penny, I know and appreciate just how incredible a gift this was - it is humbling and scary and exciting and sometimes a source of extreme sorrow. I'm still working through my feelings even years later.
My parents taught my sibling and myself how to be responsible with money and debts, how to save, and to have a good work ethic.
I was already well on my way to retiring in my mid 50s and the only thing I lacked was investing knowledge, but figured I had decades to get that stuff down (no clue about FIRE stuff at the time). I am frugal, had no debts, and was a hard worker with a long career with much recognition.
My sibling, raised by the same parents, is fucking terrible with money. Has been since they were a child. No impulse control, buys things because they deserve it, massive consumer debts. No ambition, no work ethic, no marketable skills. Spotty work history doing very low skill work (fast food, warehouse clerk, phone sales) with mostly no work at all over the last decade.
Considering sibling was raised the exact same way as me, you'd think we'd be roughly the same in terms of responsibility and being decent with money, but we are far apart in terms of basic world views really.
Inheriting a life changing sum didn't change who I was. I already was a hard-working, frugal person and I didn't change into a loser overnight and start throwing piles of money away on gold-plated cars or anything. And my sibling (who isn't a terrible person, just a terrible with money person) didn't turn into a frivolous spender just because they suddenly had instant wealth. They were already a spendthrift decades ago.
I took my inheritance and learned how to invest and grow it to hopefully provide a scholarship and some pretty kickass charitable trusts when I'm gone, but in the meantime, I'm doing just fine, and likely will never worry about money another second for the rest of my life.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
Receiving an inheritance in the tens of thousands isn't going to be life changing, but I would argue that inheriting at least that much is very common in middle class families. Unless someone has high end of life costs, I think almost by definition most middle class people are going to leave an estate >100k before the split among recipients. I don't mean this as an insult, but if you're living off just SS, we're using a pretty generous definition of middle class. I guess if you have a pension, you could be living comfortably but have minimal assets. Even if the only asset is a paid off house, you're usually talking about splitting 6 figure number however many ways.
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I inherited a car battery charger and a chair from my grandparents. I may or may not get a modest inheritance from my parents some day, but I expect to retire in the next 2 years and they should live a long time after that (knock on wood).
I definitely agree that my most valuable inheritance has been being taught not to be a spendy-pants.
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My parents paid for my college and raised me in the bay area. That's more than a head start.
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great grandparents gave individual blue chip stocks to each child whenborn "to pay for college". grandparents gave $40K -$50K ish to each of their 4 grandchildren when i was in high school "to pay for college". parents did well financially and paid the bill for college, which left the funds gifted to us as ours to keep.
So I ended up with ~$200K of investments when I graduated college from "inheritance", though my grandparents are still alive; more accurately it's "intergenerational transfer", not inheritance.
I worked/work hard and graduated from a top 10 school. I don't think my inheritance "spoiled" me any more so than I am spoiled by growing up in the environment I did; it's not like I don't have to work; i also didn't know about it until 18 ish, which i think helps. And I started reading Kiplinger magazine in 8th grade and always loved finance/investing, so I knew that $200K wasn't life changing in the "don't need to work anymore sense". Coming out of college I thought I needed about $10mm to retire, so a $200K head start never felt like much in terms of "i can retire now"; even though in actuality it's freaking gigantic, I realize it more every day.
I didn't blow it entirely on coke or a ferrari or something like that, but rather used it to justify spending 100% of my takehome salary after maxing out retirement accounts. It certainly stunted the development of my frugality muscles, but I can't say I would have had those if I started at $0 after college.
The same grandparents intend to split their estate (low 7 figures) amongst four grandchildren into a trust that will pay for their unborn great grandchildren's education. I am incredibly grateful but I also don't know the precise terms and think they are way overfunding it; I worry what might happen to what's left, a more extreme version of what happened to me. If the terms gift the remainder to the child, then that could be a problem. Each grandchild is likely to inherit $500 - $800K as their portion of the trust and all are in their late 20's / haven't had kids yet. So it probably will be a big pile of dough by the time the kids get to college age (in 20+ years).
Basically, my family has a long tradition of massively overfunding college education. there are worse things.
To answer the question more directly I estimate that about 40%-70% of my wealth ($800K) is from the inheritance. It gets mucky because if you're comfortable in maxing out your 401k and putting it all in one stock (a bank in 2011-2013) because you have $200K, is the wealth that you make from that "inherited". Likewise when you do so with other investments. an initial head start leads to more head starts. Even money I make now never feels like it's totally "mine"
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Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.
And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?
Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.
TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.
I apparently am one of the few folks on here apparently that has had a life-changing inheritance (or at least is willing to admit to it). I received an inheritance that made me instantly FI, and within 2 years after (to figure out how investing works and get all the ducks in rows) both my husband and I retired.
And while I did not hope for or expect a single penny, I know and appreciate just how incredible a gift this was - it is humbling and scary and exciting and sometimes a source of extreme sorrow. I'm still working through my feelings even years later.
My parents taught my sibling and myself how to be responsible with money and debts, how to save, and to have a good work ethic.
I was already well on my way to retiring in my mid 50s and the only thing I lacked was investing knowledge, but figured I had decades to get that stuff down (no clue about FIRE stuff at the time). I am frugal, had no debts, and was a hard worker with a long career with much recognition.
My sibling, raised by the same parents, is fucking terrible with money. Has been since they were a child. No impulse control, buys things because they deserve it, massive consumer debts. No ambition, no work ethic, no marketable skills. Spotty work history doing very low skill work (fast food, warehouse clerk, phone sales) with mostly no work at all over the last decade.
Considering sibling was raised the exact same way as me, you'd think we'd be roughly the same in terms of responsibility and being decent with money, but we are far apart in terms of basic world views really.
Inheriting a life changing sum didn't change who I was. I already was a hard-working, frugal person and I didn't change into a loser overnight and start throwing piles of money away on gold-plated cars or anything. And my sibling (who isn't a terrible person, just a terrible with money person) didn't turn into a frivolous spender just because they suddenly had instant wealth. They were already a spendthrift decades ago.
I took my inheritance and learned how to invest and grow it to hopefully provide a scholarship and some pretty kickass charitable trusts when I'm gone, but in the meantime, I'm doing just fine, and likely will never worry about money another second for the rest of my life.
Would not expect someone who inherited FI money to be self aware about the pitfalls of the typical behavior of a person who inherits FI money.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. I’m not saying that it should be split evenly between each grandchild but I would do something like this.
25% each child then 6.x% each grandchild. It’s a win for all and doesn’t “screw” the child over that just had one kid.
My grandfather did this interesting thing.
First, remember, that boys are more important than girls, because they are the breadwinners.
Thus, there were 2 trusts:
1. Big one ($500k)
2. Small one ($180k)
Now, there were 4 boys and 3 girls. Let's call them men and women, because grandpa was in his 80s when he died, after all (and he left the money in trust until his 2nd wife died. She lived 19 years past him.)
Boy #1 died young. Left a wife and 6 kids.
Boy #4 joined the family business. He got his inheritance while alive, part of the business.
Boy #2 and #3 are left.
So, big trust, split between boy #2 and #3. What happened to the widow? Well, she's not a boy.
Little trust: 4 girls (including the widow).
#1, #2, #3 get 1/4
Widow gets 1/8
Widow's 6 kids each get 1/48 (although one of them died before grandpa, so ended up being 1/40)
Anyway. Each of my grandfather's children had between 2 and 6 children of their own. That's a lot of grandchildren. So, he split his estate among his direct descendents, but did specify that in the case of his children pre-deceasing his second wife, that their portion go to their direct descendents. (Which is how I inherited, as my mother AND my aunt died before my step-grandma).
In any event, it seems like just leaving it to the kids directly makes the most sense to me. But it's totally up to the person with the money, ya know? I mean, what would happen if my whole family (hubby and kids) died? Would we split it among our siblings, our nieces and nephews, etc? Well, we've got some family members who are good with money and some who would blow it. So, no.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
Receiving an inheritance in the tens of thousands isn't going to be life changing, but I would argue that inheriting at least that much is very common in middle class families. Unless someone has high end of life costs, I think almost by definition most middle class people are going to leave an estate >100k before the split among recipients. I don't mean this as an insult, but if you're living off just SS, we're using a pretty generous definition of middle class. I guess if you have a pension, you could be living comfortably but have minimal assets. Even if the only asset is a paid off house, you're usually talking about splitting 6 figure number however many ways.
I wasn't even considered middle class. My dad was living on SS in a small, rural area in a paid off house. That man could get blood from a rock (in case you want to know where I get my MMM tendencies, the last gift he gave me was his copy of Walden). He started getting SS at...59? 60? I was still in college. His SS was less than $1000 a month. His pension was maybe $200 a month. Still, the man managed to save $10k over the next 20 years.
My "inheritance" was 1/7 of that $10k, plus 1/7 of the value of the house (it sold for full price, $62k). We were by no means what people consider middle class.
As far as being old/ young, whatever. He died at 81, I was in my late 30s. My mom died when I was in my early 40s. I only got 1/3 of her portion of her inheritance from her father because she died before his second wife.
In any event, probably the $20-25k I inherited was "life changing" for one of my siblings. (The one who loves to spend money.) Somewhat so for one other sibling whose spouse can no longer work due to injury. It was not life changing for me. Although maybe it will be. I really want a second toilet in my house.
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Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.
And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?
Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.
TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.
+1.
My mother literally saved every penny she ever got throughout her childhood. It should not be remotely surprising that when she inherited 4x her annual salary from her mother, she spent not one penny of it on "stuff." My stepdad also managed to inherit more than a half-million bucks and not change his lifestyle at all; the biggest thing he did with it was loan my brother the money to pay off his student loans (in default because my brother's depression/anxiety meant he couldn't keep a job for a number of years).
I can already tell you that if my kids won the Powerball, my DD would use it to buy All The Things, and my DS would buy himself an awesome computer and a bunch of parts to build robots from and put the remaining however-many-millions in the bank. It is just how they are wired. I would hope that our "nurture" (a/k/a "tough love") has helped DD learn to save and put needs above wants and all, so that if she did have a huge windfall she'd perhaps not fritter all of it away. But there is just no way in hell she wouldn't significantly increase her lifestyle.
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A few years ago I inherited about $12,000 from a relative that passed away.
I just did what I always do when my checking account hits "over xyz amount of dollars" and swept it into my investment account.
On the whole, that amounts to less than 1% of my whole net worth, so not that significant really in terms of FIRE stash.
I do feel a twinge of guilt, because I'm fairly certain she would have wanted me to "enjoy it" instead of just investing.
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I’ve received a few chunks from my grandmother. The first was 20k at 18, to pay for university. I did not end up completing university (did a year and a half... no direction/no idea what I wanted to do), but I did manage to spend that money within a few years (yeah, yeah... facepunch). The most substantial thing I bought was some furniture for the apartment I moved into with my future husband (probably used some for part of the wedding as well; I really don’t recall).
The next was 10k around age 23 for a down payment on a 100k house (excellent start in life to be sure). Ended up relocating cities for husband’s work after only two years, stayed there for three years, then back to original city. Got another 10k so that we’d be able to avoid CMHC fees (mortgage insurance) on the 145k house. We are still in that house and it’s paid off — another 5k was received around age 30. It was “invested” in a very nice piece of furniture (I KNOW ... ugh. I really have changed my spendy ways).
So, 45k early inherited. It’s definitely been a big help in (very nearly now) achieving FI, as we were able to get into the housing market when prices were still very low here.
My grandmother (and grandfather when he was alive) has been very generous to her three children and their children. She will leave a reasonably large estate (I’d say 1-1.5 million), which as far as I’m aware will divide evenly between her three children. I would not be totally surprised if my mom decided to gift some of that to me and my sister, but I am in no way factoring it into my plans. It’s absolutely unnecessary and will not change my lifestyle.
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I suspect a certain amount of whether or not you have gotten an inheritance is age related as well. Most people age 20-40 still have living parents, and may even have living grandparents. For my middle aged peers, it is almost unheard of to have any living grandparents and about half have lost a parent by now. Fast forward 20 years or so and I'm sure most of my peers will have lost their parents as well. Having more of your relatives die definitely increases your chance of inheritance.
I inherited money at age 18, but only b/c if was from a childless relative who died in his early 50's.
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I've told this story here before, but I love to tell it, so I'll add it to the pile.
When my grandfather died, his will gave my mom, his only child, $50k, with instructions to disperse it as follows: $6k to each of her six children and the rest ($14k) to her and my dad. The entire balance of his estate was equally distributed between his three sisters. One was wealthy, one middlin' and one was poor as a church mouse. His kindness gave all three of them security in their old age. Brilliant!
As for my $6k, I had a year's salary in the bank and wanted to buy a house. I was 30, and single. I was hesitating when I received his generous gift. It made me brave enough to pull the trigger. I have owned real estate ever since and it's a big part of my FIRE story. Thanks, Grandpa A for giving me the boost I needed!
Fast forward almost thirty years. My brother and I are in the midst of settling my parent's estate. I estimate that the six of us will recieve somewhere around $25k each. DH and are FI and I'm RE. I expect to give most of it to charity. I think my parents would approve.
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I think many people, who've inherited more, tend not to disclose that fact very often. I know I don't.
My mom died when I was 18. Me and my brother inherited about 40% of our family business that my dad started in the late -80s. This was in the late -90s. Over the years the business itself has dwindled, because it was in niche that doesn't really exist anymore. Much of my current net worth is from the re-invested dividends of that family business, probably about 2/3 - 3/4.
I'm already FI with a stash of a few million euros. On top of that our company continues to invest its capital and provides a yearly dividend. I also know that my dad is unable really spend all his money, so its very likely that sometime in the next 20 years there will be another windfall as he turns 70 next year. We also discuss these issues with each other at least a few times a year and have some investments together.
What has it given me? some amount of shame that I'm not self-made. Peace of mind, since I don't have to take out a mortgage, unless I would want to buy a stupidly expensive house or apartment. I can work any job I want, or I could live relatively well and not work at all. Currently I work as a lawyer for the government with something that helps people. I did decide that I will help others with my job. I make a decent amount of money at my current job and save maybe 30 % of it, because I have nothing I really want to spend it on. Since I have no mortgage or debt service, the money from my job is plenty. I indulge in travel a few times a year.
Having money also saved me, because when I had a bad case of depression I could get help immediately, rather than waiting for the health care system to work it out. I'm nothing but grateful for the inheritance, but I'd still trade it all for a few more years with my mom.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance. This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc... It can all effect one's ability to FIRE, and when.
My family raised me middle class-ish. We didn't have a lot of extravagances, but we didn't have any worries. That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs. It helped me get a head start on investing. In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.
More importantly, my parents paid for college. They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).
My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.
Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.
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When I was 17 I got $3k from my grandma’s passing. She was awesome, I’d rather have had more time with her. I used it to pay for my first international trip. I don’t expect or want anything else. My partner will receive a great deal. I’ve said, that’s yours when it comes, not mine.
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Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.
And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?
Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.
TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.
+1.
My mother literally saved every penny she ever got throughout her childhood. It should not be remotely surprising that when she inherited 4x her annual salary from her mother, she spent not one penny of it on "stuff." My stepdad also managed to inherit more than a half-million bucks and not change his lifestyle at all; the biggest thing he did with it was loan my brother the money to pay off his student loans (in default because my brother's depression/anxiety meant he couldn't keep a job for a number of years).
I can already tell you that if my kids won the Powerball, my DD would use it to buy All The Things, and my DS would buy himself an awesome computer and a bunch of parts to build robots from and put the remaining however-many-millions in the bank. It is just how they are wired. I would hope that our "nurture" (a/k/a "tough love") has helped DD learn to save and put needs above wants and all, so that if she did have a huge windfall she'd perhaps not fritter all of it away. But there is just no way in hell she wouldn't significantly increase her lifestyle.
I can relate to some of this...my parents were depression era kids and were the biggest penny pinchers out there...worked hard, lived frugally, and saved relentlessly in order to give their kids a better life. I have inherited that frugality, along with what they left my siblings and I.
DW has even greater frugal tendencies than me, and while I knew her parents were pretty well off, I had no notion, until after we were married, that she had a bit of family money too.
So what do we do...work (never had a big income), save, give, and reap the privilege of doing the above with a safety net. And it is a huge privilege, but I do not feel shame at all, but a humbling sense of the privilege I have. Also, as the many posts on MMM attest, I don't tend to talk about it, even in an anonymous forum, because when others know the relative privilege you have (e.g. being FIRE'd, or on the road to it), they can resent it.
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Inheritance: 0
Being raised by responsible people who prioritized their children's well being, independence and education: Priceless
We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.
My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.
One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.
50-50 between the two children is fair. How they choose to divide the money after that is up to them.
I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. I’m not saying that it should be split evenly between each grandchild but I would do something like this.
25% each child then 6.x% each grandchild. It’s a win for all and doesn’t “screw” the child over that just had one kid.
[[Citation needed]]
Agreed, I could certainly see this causing disputes. First off, it's the parents choice to do what they want with their money. But, if they want to be fair, I think even splitting amongst children is the way to go, unless one child disowned them (etc...). It's the parents children choice to have X number of children, and the cost of multiple children has a multiplier of X.
Off topic, but my own personal opinion is that the more children you have, the more greedy you are being. Finite resources in the world.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance. This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc... It can all effect one's ability to FIRE, and when.
My family raised me middle class-ish. We didn't have a lot of extravagances, but we didn't have any worries. That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs. It helped me get a head start on investing. In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.
More importantly, my parents paid for college. They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).
My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.
Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.
Good points. My parents funded my musical hobbies. Over 10 years of musical training, they paid $12k. I received $6k in scholarships due to my musical ability, and I also have earned about $40k total since then as a result of my musical work. I earn about $9k a year with this side hustle and will probably keep it going for life. 30 more years is $270k and that doesn't include investing it. Looks like it turned out to be a good investment and use of inheritance!
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Inheritance from my parents moved up my FIRE date by 5-7 years. My twin sister and I split 2.9M plus a couple of cars and other estate items.
As a teenager, I resented my Dad's frugal tendencies. My neighborhood friends belonged to beach clubs/country clubs, parents had fancy leased cars, fancy clothes, bikes etc. We had 10yr old station wagons, refurbished bikes, modest clothes, and played golf at the crappy public course. Now I feel beyond grateful and blessed. I was able to leave my burnout career behind at the age of 44. I think most of my parent's principles rubbed off on my sister and I, and we both adhere to a lot of the MMM "rules". Probably the coolest thing was nudging my sister to read the JL Collins stock series, and now she has a low cost lazy portfolio. Also, my wife really enjoys her job, so we live off of her salary and the stache will probably grow to a ridiculous number.
Sidenote: My sister still lives in our small hometown and ran into one of the spendypants neighbors a few months back. He lost his long time job as editor when the town newspaper went bellyup. They had to downsize to a small apartment and both work menial part time jobs in their mid 70s.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
This.
Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.
Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.
Yeah, probably. In the context of the question - how did inheritance help you on the way to FIRE - I plan on being financially independent long before an inheritance is even a question. Like it seems like you dad received those inheritances in his 60s or 70s? I don't foresee needing to work at that age, so I imagine any inheritance would just be gravy.
My parents and grandparents are big savers. I expect that we'll eventually receive a fairly large inheritance. But, I also think it will come at a time when we're FI or at least very close.
I think another interesting question for folks on here is what do they plan to do with their own money after they die. If we're all living by the 4% rule, there's a good chance that we'll have a significant amount of wealth when we pass away. What do you think should be done with it?
For myself, I assume that I'll pass it down to my kids. But, I would also be interested in setting up something like a scholarship fund for STEM education at a university that I've been involved with.
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I still hope no one would feel ashamed to receive an inheritance of any kind.
I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance. This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc... It can all effect one's ability to FIRE, and when.
My family raised me middle class-ish. We didn't have a lot of extravagances, but we didn't have any worries. That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs. It helped me get a head start on investing. In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.
More importantly, my parents paid for college. They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).
My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.
Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.
Good points. My parents funded my musical hobbies. Over 10 years of musical training, they paid $12k. I received $6k in scholarships due to my musical ability, and I also have earned about $40k total since then as a result of my musical work. I earn about $9k a year with this side hustle and will probably keep it going for life. 30 more years is $270k and that doesn't include investing it. Looks like it turned out to be a good investment and use of inheritance!
I've earned zippo from my music training. But, who knows how much impact it had in my development?
The point is that all sorts of inheritance has an impact one's ability to FIRE. And especially, there is a gray area between the lessons your parents taught you (not everyone has parents that raise them 'properly') to formal monetary gifts/inheritance.
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I still hope no one would feel ashamed to receive an inheritance of any kind.
I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.
It would seem like it should be that way, but then again, on this very thread one poster discounted another poster's entire well-written comment simply because she had received an inheritance. So, I guess you're not safe anywhere!
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$0
My family has nothing
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Large inheritances ( think trust fund) make for lazy, loser adults.
I disagree with this generalization. It really depends on the character of the person receiving the gift. In the same family I have seen both extremes. One individual will never gain control of their finances- any money they received was leveraged and increased their debt so it did have the effect Bucksandreds describes. In the same family another sibling continues to live frugally and I suspect any inherited money will be passed on to following generations in the form of educational funds.
My wife and I have received gifts through the years, they are never anticipated and we never include them in our financial planning. The best gift from our parents is, through their frugality, they have enough to support themselves through end of life. I have many friends that are not so fortunate and are faced with worrying about their own retirement care as well as their parents. We feel very fortunate and appreciate our situation.
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When my Dad died, I got about $5,000 from an old retirement plan my that still had my sister and I as beneficiaries. Dad was remarried and I knew he fully intended his wife get most of the money but had just failed to update his beneficiaries when he remarried. I ended up giving my stepmom half of my share and put the other half in an account for our daughter. Seemed like the right thing to do.
As for my Mom, she's still around and very healthy. I expect and hope she and my stepdad spend their last dime on parking at the funeral home. I'd certainly prefer that to them leaving me a big chunk of money. I'm just fine on my own.
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I don't expect to receive anything when my parents die, they don't have too much saved up and will probably end up having to spend most if not all of it in retirement. I did receive $1,000 when my grandmother passed away, that helped pay for my solo eurotrip the following summer. My parents helped me pay for school by saving up for me my whole life, that ended up being about 20k and helped with my expenses and paying off some of my debt. They occasionally send gifts and help me pay for plane tickets to visit them, amounting to maybe $500 or so per year. I'm very grateful for everything they have done for me, and if they need help later on I would do what I could. I'm a little worried about their relative unpreparedness for the future, especially my dad if he can't work as long as he expects to and doesn't rein in his unnecessary spending a bit, but I'm hoping for the best.
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As our parents are still alive, partner and I have not received an inheritance. None of them are wealthy, so we don't expect large inheritances. Two of our parents own their home, but they will have mortgages until they're in their 80s. I think the largest inheritance will be from my mother. I would be extremely surprised if it was more than €50.000 though. She is frugal so I don't believe she would waste any of her money, but she doesn't have a large pension so she she'll probably have to spend her savings once she retires. I paid my own way through university but she did gift me €2000 when I bought my first home and loaned me some more. It's a soft loan, I don't pay interest, it's not written down anywhere, but I do pay her back. The balance is now €3000. She has good genes so I fully expect her to live for another 30 years.
We know the death of at least one parent will cost us a lot of money. That parent doesn't have any savings or insurance. We'll have to pay funeral costs and empty their (rented) property. This is one of the reasons why we keep an emergency fund. Emergencies like these do happen unexpectedly and I have seen people being bankrupted because they couldn't afford the funeral of a penniless parent.
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Inheritance from my parents moved up my FIRE date by 5-7 years. My twin sister and I split 2.9M plus a couple of cars and other estate items.
As a teenager, I resented my Dad's frugal tendencies. My neighborhood friends belonged to beach clubs/country clubs, parents had fancy leased cars, fancy clothes, bikes etc. We had 10yr old station wagons, refurbished bikes, modest clothes, and played golf at the crappy public course. Now I feel beyond grateful and blessed. I was able to leave my burnout career behind at the age of 44. I think most of my parent's principles rubbed off on my sister and I, and we both adhere to a lot of the MMM "rules". Probably the coolest thing was nudging my sister to read the JL Collins stock series, and now she has a low cost lazy portfolio. Also, my wife really enjoys her job, so we live off of her salary and the stache will probably grow to a ridiculous number.
Sidenote: My sister still lives in our small hometown and ran into one of the spendypants neighbors a few months back. He lost his long time job as editor when the town newspaper went bellyup. They had to downsize to a small apartment and both work menial part time jobs in their mid 70s.
Thank you for this. I am currently struggling with whether I am being unfair to my own children. We have the resources to live a much spendier lifestyle and my teen son in particular will sometimes ask why we don't have a nicer house, expensive gadgets, etc. I've been feeling a bit of guilt that we are practicing all this frugality so we can benefit and retire earlier - with no benefit to them. This makes me realize that our frugality can also benefit them in the distant future.
To be fair to my son - he's learned a lot about not spending unnecessarily and even resists the temptation for a professional haircut and insists on surviving my clumsy attempts even though his hairstyle is very important to him (this is the boy who fusses for ages with wax in the bathrooms most mornings haha).
Anyway, to drag this back on topic - we haven't received any inheritances as yet. When DH's grandma passed, she left a small amount of money. However, my FIL insisted on keeping all of it (my SIL was not happy!). He hasn't spent it and plans to pass it on when he in turn passes. I think he feels his children (at that time in their 40s) won't be responsible with the money or something.
My mother did invest $10k into a business DH and I were involved in when I was 20. Even though she knew it was headed for disaster (the main partner was very good at talking big - we expanded too quickly and even a couple of profitable locations weren't enough to keep things afloat). I had poured most of the money from my decent summer job into it and lost that all too. At that time, she said it would be a good business lesson for me and she was right.
When I was younger, I had expectations of a reasonably hefty inheritance. Both my parents were wealthy. Unfortunately, things have changed a lot for them in the last few years as they are about to enter their 70s. My mother racked up some debts counting her chickens before they hatched and will now have just enough to manage for the rest of her life (hopefully). My father has never been saver and probably spent most of his (very generous) income. He hasn't worked for nearly a year now and funds are tight. I really, really hope he can manage for the rest of his life - what resources I have are going to my mother's support. That said - if I have to work so he won't be destitute, I'd do it.
Moral of the story - you just never know with inheritances. My DH and I were joking that we will likely receive larger inheritances from his (low income) parents than from my (formerly wealthy) parents! We'd never have dreamed of this scenario even 5 years ago.
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I still hope no one would feel ashamed to receive an inheritance of any kind.
I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.
It would seem like it should be that way, but then again, on this very thread one poster discounted another poster's entire well-written comment simply because she had received an inheritance. So, I guess you're not safe anywhere!
You. I like you.
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My dad died broke as shit (my uncles paid for his funeral). My stepdad passed recently and I inherited two guns and some tools. Mom is alive and well, but lives on SS and a very small pension; she's got no assets to pass along. So basically zero for me.
My wife's parents, however, gave their house to my wife in one of those elderly law type deals in the event they got real sick and needed to spend down assets to get on Medicaid. It's worth @$300k. But they still talk now and again about selling it and moving, which kinda freaks me the fuck out, because I'm worried it will be a taxable event for us. In addition, her dad gifted us over about $20k, again more for asset-shifting than anything else, and we pretty much just keep it invested with the understanding that they may need it some day. Same goes for the house. So in the end, she may or may not inherit those assets, and possibly like $40k-$50k more -- but the old man has never been invested in the market, having preferred to use a CD ladder to provide some extra income from the interest payments back when interest rates were normal. That strategy has been killing him the past decade, though I think they've more or less ratcheted back their spending to account for the lost interest income (which wasn't much to begin with because his entire balance never exceeded $70k from what I've seen).
At any rate, we've earned and saved more than enough to not need any inheritance money to be financially secure.
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Yes, my parents sold their old house and gave me $50,000.00 about 15 years ago. I used all of that money as a down payment on a small condo and lived there until my husband and i got together. It was a bachelor suite and not appropriate for the two of us. Since I wasn't permitted to rent it out, I sold it and invested the money. The money has grown to about 3 1/2 times the original amount.
My parents are fairly well off so I have no worries about them funding their retirement. They retired at about 62 and have been retired for about 20 years now.
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When I was a toddler in the 80s, my grandfather passed away and left me 400 shares of stock worth around $2,000 at the time. With dividend reinvestment it has grown to over $50,000. From a risk standpoint I should sell it, but the stock holds sentimental value, mainly to my mom. I'd be fine if the company went bankrupt as it would reduce my FIRE date by less than a year.
My parents were very frugal, and with both parents working, they lived off of a portion of the smaller of their two salaries and saved the rest. Although they have a nest egg comfortably in the seven figures, my mom continues to work because she enjoys her job, and they both live off of her salary and continue to save even more money. After she retires, their pensions and SS will more than cover their current living expenses, so I expect their stash to continue growing. Personally I would much rather that they blow it on travel and experiences, but they seem very set in their ways at this point and I'm not sure if that will change going forward. I don't really need any of their money, but I have a feeling that my brother and I will be the recipients of a sizable inheritance from them.
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The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
It's easy to say that if there are two types of inheritances that they are either "incidental" or "life-changing", with reference to dollar amount. But what really changes it is *when* someone receives the money, since a substantial sum received as a young adult defines one's life. If I receive $2 million when I'm 75 it won't matter much since I will have my own money and I'll be too old to enjoy it. But if I had inherited that same amount at age 25 and knew I was getting it at age 15 my life would be completely different.
Where I live, it is plainly obvious that inheritances are fueling the gentrification of formerly black neighborhoods. It's not just the condos but the businesses themselves. I personally know three people who opened boutique businesses and family money paid for each of them. One is a microbrewery, another is a bakery, an another is a trio of trendy restaurants.
How do those of us with student loans and no inheritances on the horizon start capital-intensive businesses? We have to beg those who did inherit money to invest and share ownership.
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I still hope no one would feel ashamed to receive an inheritance of any kind.
I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.
It would seem like it should be that way, but then again, on this very thread one poster discounted another poster's entire well-written comment simply because she had received an inheritance. So, I guess you're not safe anywhere!
You. I like you.
Me too.
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The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
It's easy to say that if there are two types of inheritances that they are either "incidental" or "life-changing", with reference to dollar amount. But what really changes it is *when* someone receives the money, since a substantial sum received as a young adult defines one's life. If I receive $2 million when I'm 75 it won't matter much since I will have my own money and I'll be too old to enjoy it. But if I had inherited that same amount at age 25 and knew I was getting it at age 15 my life would be completely different.
Where I live, it is plainly obvious that inheritances are fueling the gentrification of formerly black neighborhoods. It's not just the condos but the businesses themselves. I personally know three people who opened boutique businesses and family money paid for each of them. One is a microbrewery, another is a bakery, an another is a trio of trendy restaurants.
How do those of us with student loans and no inheritances on the horizon start capital-intensive businesses? We have to beg those who did inherit money to invest and share ownership.
Trendy non profitable businesses are a way I’ve seen an inheritor try not to appear lazy. “Barre” exercise store I’ve seen by someone I know. Probably a few hours of real work a week but enough to make them look like they’re doing something to most people. I also know a stay at home dad who utilizes a nanny. He expects to inherit multiple millions in the next decade and is spending down his Trust fund in the meantime. Less than half of the people I know with real family money do anything other than try to look not lazy. I’d probably be a bum if I received or knew I’d soon receive 7 figures while young. There are obviously exceptions. I’m just comparing it to the general population. We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
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No inheritances on either side. Expect nothing from my parents. They have plenty to keep themselves in comfort intil they die, but by the time they go there will not be a lot left.
My husband will most likely inherit a lot, but it will probably happen when we are in our 70s, his parents are from long lived families. So we are not counting on that for early retirement!
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Thank you for this. I am currently struggling with whether I am being unfair to my own children. We have the resources to live a much spendier lifestyle and my teen son in particular will sometimes ask why we don't have a nicer house, expensive gadgets, etc. I've been feeling a bit of guilt that we are practicing all this frugality so we can benefit and retire earlier - with no benefit to them. This makes me realize that our frugality can also benefit them in the distant future.
Quite the opposite, you are giving your children a valuable gift with the example you are setting for them.
I'll start off by saying that although you forgo a "nicer house, expensive gadgets", etc. I bet you still provide your children with a safe home that is warm in the winter and reasonably cool in the summer. I bet they never go hungry, and I bet the get lots of love and attention from you. But in addition to that, you are teaching them that the correct amount of stuff to own "enough stuff to be comfortable and really happy", and not "as much stuff as you possibly can". Your kids are very lucky to have you raising them.
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We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
Your argumentative strategy of generalizations and anecdotes interspersed with insults is a lot less convincing than you think.
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Thank you for this. I am currently struggling with whether I am being unfair to my own children. We have the resources to live a much spendier lifestyle and my teen son in particular will sometimes ask why we don't have a nicer house, expensive gadgets, etc. I've been feeling a bit of guilt that we are practicing all this frugality so we can benefit and retire earlier - with no benefit to them. This makes me realize that our frugality can also benefit them in the distant future.
Quite the opposite, you are giving your children a valuable gift with the example you are setting for them.
I'll start off by saying that although you forgo a "nicer house, expensive gadgets", etc. I bet you still provide your children with a safe home that is warm in the winter and reasonably cool in the summer. I bet they never go hungry, and I bet the get lots of love and attention from you. But in addition to that, you are teaching them that the correct amount of stuff to own "enough stuff to be comfortable and really happy", and not "as much stuff as you possibly can". Your kids are very lucky to have you raising them.
That was amazing. And impacted me more than you can know. THANK YOU.
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I expect my spouse and I will inherit somewhere between $0 and $500,000, give or take a couple hundred thousand, so really I have no idea and I'm not depending on anything. Our parents are all still young (in their 60s) and come from long living families, so I could be in my 60s or 70s by the time they pass, and there are so many variables which could affect their finances between now and then, namely healthcare. Hopefully my parents and my inlaws have many healthy years left to enjoy spending time with us and their grandkids, and if I do get a large inheritance in my 60s, it won't really matter because I will already be FI/RE. Anything we inherit will probably be put towards our children's (or grandchildren's) education.
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We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
Your argumentative strategy of generalizations and anecdotes interspersed with insults is a lot less convincing than you think.
Yup.
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I estimate that between 10 to 20% of my wealth came from direct money gifts from my family + the results of investing it (but do you count the capital gain as coming from your family or from you at this point?).
However it's difficult to really quantify beyond money gifts. My parents gave me a good life, largely contributed to my education choices and paid for all of it and more. I'd need to really calculate how bad my situation would be if I had had to take a loan for parts of that.
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We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
Your argumentative strategy of generalizations and anecdotes interspersed with insults is a lot less convincing than you think.
Yup.
I was about to call out the bad behaviour but I'm glad I'm not the only one who noticed it...
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The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
It's easy to say that if there are two types of inheritances that they are either "incidental" or "life-changing", with reference to dollar amount. But what really changes it is *when* someone receives the money, since a substantial sum received as a young adult defines one's life. If I receive $2 million when I'm 75 it won't matter much since I will have my own money and I'll be too old to enjoy it. But if I had inherited that same amount at age 25 and knew I was getting it at age 15 my life would be completely different.
Where I live, it is plainly obvious that inheritances are fueling the gentrification of formerly black neighborhoods. It's not just the condos but the businesses themselves. I personally know three people who opened boutique businesses and family money paid for each of them. One is a microbrewery, another is a bakery, an another is a trio of trendy restaurants.
How do those of us with student loans and no inheritances on the horizon start capital-intensive businesses? We have to beg those who did inherit money to invest and share ownership.
Trendy non profitable businesses are a way I’ve seen an inheritor try not to appear lazy. “Barre” exercise store I’ve seen by someone I know. Probably a few hours of real work a week but enough to make them look like they’re doing something to most people. I also know a stay at home dad who utilizes a nanny. He expects to inherit multiple millions in the next decade and is spending down his Trust fund in the meantime. Less than half of the people I know with real family money do anything other than try to look not lazy. I’d probably be a bum if I received or knew I’d soon receive 7 figures while young. There are obviously exceptions. I’m just comparing it to the general population. We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
So you're against inheritance being passed on to family members and believe it should be redistributed through the government, but also believe that people that receive inheritances redistribute that money by being lazy spendthrifts and opening non-profitable businesses. Sounds like maybe you're just jealous?
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. . . . .
When my MIL dies we will inherit a significant, life-changing sum. But, to be honest, we don't factor this into our FIRE calculations and continue to save 50-60% and make plans without it. Still, it is always in the back of my mind. I think of it as a buffer if we need more cash in the future to buy housing (instead of borrowing in ER) or to help lighten the blow of post-retirement health care costs. It's hard to get my head around it, really.
I guess we've consistently used the money to buy our freedom and for the most part haven't spent it on stupid shit. I suspect that someday we'll have way more than we know what to do with, and we're already talking about how we will use it for charity and the common good. I look forward to the day when I can set up a donor-advised fund and basically give money away in my local community. I want to do it while I'm alive.
Your post resonated VERY much with me. We are diligently saving and putting our heads down and living way below our means in our mid-30s. But my father has stated his goal is to leave my brother and I each around a quarter million as an inheritance and my in-laws recently shared their estate plans with us and I was blown away to see that they have a multi-million dollar real estate portfolio to split between three kids. We're not counting on any of it and will continue to save. But if everything turns out as my parents and in-laws plan and our investments turn out well, then we will have more money than we know what to do with.
Reading this thread has made me super aware of how even small inheritances can build into generational wealth. My great grandparents left my grandmother some land, she sold it and padded her retirement funds, when she passed she left a slightly larger inheritance to my father who has always been a millionaire next door type (but grew up food insecure) - my dad's goal is to leave us a fairly significant amount which will be more than we likely ever need . . . etc. My husband's family has a very similar story.
If my kids don't blow it they will each potentially have multi-millions of dollars to pass on to their own children/charity/whatever. That is sort of an astonishing thought!
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We have been incredibly fortunate with inheritances. I grew up in a solid middle class setting and was frankly shocked when my third of my parents estate amounted to around $180K. On my wife's side, her mother passed and left around $300K. We have been informed that via an aunt that passed recently we may be receiving another inheritance.
With these very significant windfalls, we have paid off the mortgage ( we live in a modest house for our area). We have 3 kids currently all in college, we are using the inheritance money to put them through college.
We plan to set up college savings plans for future grandchildren. Basically pass it along.
The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
I have issues, but I do not have any issues of guilt over a possible inheritance.
If you ever spent 5 minutes with my step-mom you would realize that she is not happy until all the money is gone. My dad was never great with money, but he always spent less than he made. She has been able to convince him to spend more than they make. When they were both working, my dad could make up the difference by working over-time. However, they retired about 6 years ago and working overtime is no longer an option.
They inherited about 300K from her mom about 5 years ago. About 100K is left. I am not looking forward to the next 2-3 years when the money is gone. They are retired and live on a modest pension and social security. However, they probably spend 20-30K/year more than their income.
They were gifted 300K during the worst housing market crash in Florida history. They lost 120K on the first house, they managed to break even on the second house and the rest of the money is being pissed away on a lifestyle they cannot afford.
During the same time, I bought a foreclosure in Florida for 95K and put 16K into it. It's currently worth 235K. They thought I was crazy when I bought that house. They wanted me to buy in a more expensive neighborhood that I could not afford, like they were doing.
If I was gifted 300K at the same time, my wife and I would have bought 7 additional rental houses in the same neighborhood for about 85K to 100K each. Our total portfolio would be worth about 1.75 million with 500K in mortgages. We would have $7200/month in rental income after vacancy, repairs and management.
I would have turned that 300K into 1.25 million. However, they managed to pretty much lose it all.
The good news is that my step-mom stopped giving me advice about money. The bad news is that the conversation has shifted into how they are now always broke and drop hints that they might need some help in a few years.
I can't wait.
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I'm not proud of my behavior during my 20's. Within a thirty-month period, I received a $10,000 inheritance, and married my wife, the latter of which included financing a new car and spending like a sailor on our honeymoon. I could have swung things $60,000 (would probably be $100,000 now) if I'd only been aware of mustachian principles then.
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I got a $1,000 CD from my great grandmother when I was 14. I spent it on a plane ticket to Europe when I was 22.
I don't expect to receive anything from my parents. They've struggled. I do imagine my wife's parents leaving something behind. Her father is very good with money. I have no idea how much. They've just said it'll be split evenly among their four children.
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I don't expect to inherit anything and certainly not anytime soon. My parents did pay for my undergrad and gave me my first car (not fancy at all) and helped me launch in a lot of ways before I was 21. So, I've definitely benefited from parental help on my road to FIRE, though not an inheritance.
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I find it weird that people on this thread who have received inheritances assumed that many others have too. I'm not sure it's very common in most middle class families.
We have received no inheritance money thus far and don't expect to. My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances. They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.
However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care. That counts for a great deal but it isn't inherited. H received a small inheritance from his grandmother when he was much younger, so that's been gone for years. His parents are living on SS.
Yeah, this was my thought too.
No hate for anyone who gets an inheritance, but it goes to show that there are levels to this, "middle class" thing, and maybe it even serves to put a dent in the whole, "anyone can do it" narrative.
Sometimes people die with some money. It has to go somewhere. I'm sure that most inheritances are small, and hopefully they come very late in life. But I think that sometimes, people don't realize just how far ahead they are. Even MMM.
He describes his situation as, "normal", which is at least more defensible than average. But he talks of things like $10K in tuition assistance from his parents, and borrowing money from his sister to buy a car at 23. Now, it's not that I think that this is a lot of money, mind you, but I think that sometimes, people take for granted, the things that they have access to.
A mental rundown of a comparison between MMM and my girlfriend: At age 23, he had people to borrow money from. At age 19, my girlfriend's dad hit her up for a loan to pay back his (dramatically underfunded) 401k so that he could avoid a penalty. Now, in our late 20s, we are the only household from her immediate family that has any savings, whatsoever. We're buying nieces and nephews (from older siblings) school clothes, giving out gas money so that family members don't miss their work shift and get fired, etc.
She didn't come from a destitute family. Just a low, to middle income family who, like much of America, sucks with money and lived paycheck to paycheck.
This isn't to say, "woe is us" or anything. We're incredibly lucky and on a terrific trajectory. I guess I don't know where I'm going with this, except to say that I think goal setting and teaching and stuff, is probably best done with the subject in mind. You're likeness to Tony Robbins is going to dictate how close to Tony Robbins-like results you can get.
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When I was 19 I inherited $8,000 from an old lady at church who died without any children. She left 8k to all of the young, single people in her church, and $15,000 to all of the married couples she was friends with. I used $1,000 toward a $4,000 used car that I purchased a few years later (and kept for 8 years). Then I used the rest toward the down payment on my first house. While 8k isn't a lot of money, that house is now an income property that has had the single biggest impact on FIRE for me to date. So thank you little old church lady, I'm sorry I'm agnostic now, but your gift is still very much appreciated.
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When I was 19 I inherited $8,000 from an old lady at church who died without any children. She left 8k to all of the young, single people in her church, and $15,000 to all of the married couples she was friends with. I used $1,000 toward a $4,000 used car that I purchased a few years later (and kept for 8 years). Then I used the rest toward the down payment on my first house. While 8k isn't a lot of money, that house is now an income property that has had the single biggest impact on FIRE for me to date. So thank you little old church lady, I'm sorry I'm agnostic now, but your gift is still very much appreciated.
What a cool story! It must have been such a surprise to everyone. Kudos to you for making such prudent choices. I was not so wise at 19...
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In a funny coincidence, my FIL just handed DH $4k in cash "just because" . He gave my BIL some cash too. He's in his 80s now and is probably feeling his age and so starting to hand out money.
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Inherited knowledge has helped me infinitely more than inherited money. Having my dad set me up with an eTrade account at a young age didn't hurt for learning about investing.
When I was a kid, my grandfather gave me $1k of stock, a bunch of savings bonds that ended up paying for a portion of my college tuition, and my dad gave me $6k of his company stock. Those gifts got me started investing--I managed it from about the age of 13 and grew it to 20k by the time I was in college.
As an adult, I got I believe four $10-14k cash presents or inheritances. All invested immediately.
I'm glad I haven't gotten more because I really want FIRE to be mostly of my own doing. I wouldn't feel as accomplished if it was just handed to me now!
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There are a few ways to look at this
1. monetary giving which was the subject of this post - i've been getting 10k a year from my parents for 3 years now and it will increase. Does this help - Yes - does it help ALOT - No - i dont count on it as FIRE income and the 10k a year is just a nice little extra to get.
2. My parents have money. it allows me to take what many here would percieve as risky. i dont know that everything i've done to date in my life would have been as easy to do with out knowing i've got some support on the back end from them as needed - conversly my parents treat me similarly - they know we have money. I see this as the first start of building wealth for generation to come.
3. they taught me to be conservative with money and how to shop. alla the MMM grocery thread is how i always shop for groceries. This was worth alot. They also taught me about investing - though incorrect i learned alot and then found this.
so there are many ways in which "wealth" can be used to help you on your way -
1. passed on wealth
2. security
3. knowledge
Its unfortunate that most of these ideals are tied to people who already have money. In the end Financial Literacy is the biggest issue facing society today - it help cure most of the other ailments we have.
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When I was in my twenties, my mother gave me a life insurance policy they bought when I was a baby, I turned it in for the cash value (about $1,100) and put that into Vangard.
When She died I got a $2000 life insurance policy payout.
On the other hand for the ten years after my dad died, when I visited at Christmas time, I always gave her between $1k and $3.5K to help her out.
I was also left half of her house my sister the other half. I kind of expected my sister to start
paying me rent or a purchase payment at some point, but it's going on 6 years now.
I did visit recently and she did check with a bank about getting a loan, and an appraisor did an appraisal. But it's been 6 weeks since and she doesn't respond to my calls. I suspect she wants to live their another winter. Her and her girlfriend spent a few years living in a van,
so a house is nice.
She is broke but working and will have a hard time qualifying for a mortgage on half the house. She has a girlfriend living with her, I suggested she write a contract with her girlgriend to show the girlfriend paying her a fair rent and she could glide by with plenty of income. I don't know how that went over.
If she ever pays me off, I''ll get $30k or $35k of inheritance. It won't make any difference in our retirement though.
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^^^ Well you sound like a good guy, BTDRetire. I'm sure it is nice for your sister and her girlfriend to have a roof over their heads after living in a van. Hopefully they are able to make an effort in getting a new loan. If not, you know that you're doing the right thing not making this a huge issue.
My own inheritance story is a slightly different one than most here. When my young husband died 10 years ago, I received his almost 6 figure 401K as his beneficiary, which rolled over into my name and has grown. His company's life insurance was for one year's salary, so I received a check for right around $105,000. Another private insurance policy was for $50K. I used our money market savings to put a down payment on a house in a much more LCOL area than pricey Silicon Valley where we'd been living, and where we could never quite afford a house of our own; we'd had an expensive rented house. The majority of the remaining funds, I put into Fidelity, taking some out quite cautiously about a year later to buy a small business, which has double in size, and I "paid" myself back over 5 years. Another insurance payout came from the uninsured motorist policy about a year after my husband's death, I invested in a rental property which cash flows well today.
I'm certainly no rich widow by anyone's definition, but I like to think I have carefully used and saved this money well. I've tried to make good (and admittedly imperfect at times) decisions to ensure my 3 kids and I stay in the middle class.Roofs need replacing, septic tanks need redoing, kids need orthodontia. I've witnessed financial horror stories by other widows who've made dreadful decisions and hopefully have avoided that. I do sometimes, quite futilely, wonder what our financial situation would have been in my husband had not died. He was on an upward career trajectory, was a smart software developer who was fascinated by his work. I've almost always been employed in one enterprise or another, so I think we'd be doing pretty well at this point in time. We lived well, but never beyond our means and I'm sure we'd have accumulated a decent stache.
About 5 years ago I reset my mortgage to coincide with my youngest child leaving the nest. So at age 50 or so I should have 3 paid for pieces of property, a business that could be sold, and retirement and investment savings. I may be on track for FIRE, but unclear as to the future and what that might bring.
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My family have nothing of worth to pass on. No money, no knowledge about money. Zip. The only thing they've managed of value is to be an example of how not to do money, family, life generally.
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Be careful what you disclose about wealth on the internet, especially if you share other personal information. innocent seeming questions can elicit data that helps thieves target.
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Be careful what you disclose about wealth on the internet, especially if you share other personal information. innocent seeming questions can elicit data that helps thieves target.
That's always a worry, which stops me from posting too much personal information here. But if someone digs hard enough then you can always be found - as we discovered on another thread dedicated to a bit of online sleuthing.
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I talked about this on another thread, but I grew up solidly "middle class" (I know that that's not a precise term). My parents are both educators. They are divorced and both live in cities with insane housing prices. They are older and have very solid government pension plans. My dad, in particular, has always been very frugal/cheap. For example, most of his clothes are from Goodwill, he renovated his apartment mostly himself in the early 80s and hasn't upgraded at all since, vacations were camping when I was a kid. He doesn't own mod cons like a dishwasher or a microwave and his fridge is from the 1950s. I worked from when I was around 15 and funded my own education. My parents never bought me a car or helped financially with college and I never asked them to. But I'm very privileged in the sense that I always knew that if I had big financial issues my parents would probably help me out - luckily I've always been frugal and OK with money. My DH grew up very poor so he has never had this luxury. Also, I've never had to bail out members of my family -as so many others have had to do.
Fast forward to now, and I recently found out that not only are each of my parents' houses worth a huge amount of money because of the insanely hot real estate markets in each of their cities, my dad also has a lot of money in an investment account. He knows very little about money but he has a financial planner provided by his pension plan who seems to have done very well with it. And I guess all his natural penny pinching and frugality was worth it. He's like MMM but more hardcore in many ways and without the financial literacy. I was really shocked to find this out recently - could have knocked me over with a feather.
Anyway, as outlined on my other thread i'm not letting this knowledge influence me. My husband earns very little and I earn low wage compared to many on this board. We're trying to stick to our budget and live frugally by not owning a car, eating cheaply etc. But I imagine that if and when (hopefully not soon) either of my parents passed away, we'd be in a position to FIRE immediately, which is a very weird thought.
I totally get the negative comments about "trust fund babies" and people born into wealth on this thread. I've had these thoughts too particularly when I'm having a hard time at work and wished that I could change careers to something less well paid (or at least not be the breadwinner for my family anymore). As someone who had no idea that my parents have money (and their money is mainly tied up in the houses where they live anyway) this is a very strange position to be in.
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My parents are very frugal with good pensions, so they're likely to leave something behind. But we intend to FIRE well before my parents are likely to die, so any inheritance does not factor into our financial plans.
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Inherited knowledge has helped me infinitely more than inherited money. Having my dad set me up with an eTrade account at a young age didn't hurt for learning about investing.
When I was a kid, my grandfather gave me $1k of stock, a bunch of savings bonds that ended up paying for a portion of my college tuition, and my dad gave me $6k of his company stock. Those gifts got me started investing--I managed it from about the age of 13 and grew it to 20k by the time I was in college.
As an adult, I got I believe four $10-14k cash presents or inheritances. All invested immediately.
I'm glad I haven't gotten more because I really want FIRE to be mostly of my own doing. I wouldn't feel as accomplished if it was just handed to me now!
When I was 21, a family friend self-published a book about investing (this was right at the turn of the century). She gave me a copy, inscribing it "Remember your Roth".
I just saw my Roth balance pass $100,000 for the first time. She's been dead for 13 years, but I hope she'd be proud, even though I used mutual funds and all of her investing was in individual stocks.
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Our inheritance certainly factored in our plans. Recently received 50K (w. 128K inheritance still to come)
46K applied to down payment on house currently going thru escrow + 4K for used Solar Panels/new batteries=50K
Our house = rental income. 1/2 acre yard sports two designated areas where RVers can live F/T. Includes a back private entrance to private bathroom w/shower & shared laundry room+ mud room. Also each RVer will have an additional 20x20 storage shed & fenced area for gardening. About 12 wks out of the year during winter, they'll need their own generators for power. Will charge a flat $460 mo ea.
$1290 would be our House Payment vs our current $1200 mo. We live in California.
$920 mo rental income
-$60 rental expenses
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$860 mo towards $1290 house payment=$430 House payment. Longer drive to work is the downside
$300 extra transportation costs
$430 house payment
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$730 monthly payment -VS-
$1200 Current housing
Save $470 mo.
50K gives us a nicer home, better air quality, in a touristy recreation area (great hiking, biking) w. 1/2 acre while saving $470 mo
It's probably the Mtn Biking Capitol of California and we are Mtn Bikers so it's perfect~and starting Nov 1st, I'll be getting a small raise at work of $50 per week.
Remaining $128K Inheritance
50K towards a Condo for our son
70K Re-invest in Real Estate
3k moving expenses
5K in safe
RV'ers may want to rent out their abodes some on airb&b during the summer for 14 days or less -Special IRS rule/benefit-. We could follow suit renting our house out so maybe a trade can be had. This plan above is probably illegal but due to this being a nice touristy area w/ 60% of the homes being vacation homes, it is acceptable.
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The stories here are very interesting! I especially like Hula Hoops since hers was a surprise
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The stories here are very interesting! I especially like Hula Hoops since hers was a surprise
Thanks. It's made me realize that life is a total crapshoot. There are so many things, both good and bad, that are beyond our control.
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I have an aunt and uncle with no kids, little contact with her family, and only 3 nieces / nephews on our side. They keep reminding me that I will be getting condo X ($600k), that it is in their will...
They are only 72, acting like they are 92, and it is highly likely that he will die first, she will reconnect with some of her family, and adjust her will at that time... or that they will sell a condo in the next 15 years , or... well, anything could happen.
I don't understand, and it is not helpful for them to live like they are about to die in the next 5+ years.
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I had a well off family member who paid for my undergrad. I got a scholarship to grad school so I only took a 15K loan for living expenses during the two years it took to get my masters. I paid it off in two years. I don’t know anyone my age (34) with my education level, without student loans.
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I have a friend whose dad's family grew up in Flatbush, Brooklyn. It was a poor and crime-ridden area when he was a boy in the 1960s and 1970s. The fate of the house wasn't much of a concern because it was not of much value. Grandma is still alive and now the modest house is worth $1 million. This came as a surprise to the four siblings and unfortunately it has led to a major rift in the family as one of the sisters succeeded in getting the grandmother to rewrite the will so that the house will go to her and her alone. This sister doesn't even live in the United States anymore. For whatever reason the other siblings aren't able to reconcile their differences and go up there and demand that the will be rewritten to split the house evenly.
The irony of the whole thing is that whoever ends up buying the house will likely buy it...with an inheritance. The $1 million will go to someone who is now an EU citizen and become the inheritance for her kids.
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TBH, inheritance will a big contributor to reducing the number of years until becoming FI by about 5 years. I have known (and hoped) that this inheritance from my grandfathers trust was coming at some later stage in life, and truthfully I have slacked off and have lost some career ambition because of it.
That amount will be about $400,000. Also, as an only child l am anticipating additional inheritance from my parents of a similar amount.
Does inheritance affect my goals and life plans? Probably.
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Less than half of the people I know with real family money do anything other than try to look not lazy. I’d probably be a bum if I received or knew I’d soon receive 7 figures while young. There are obviously exceptions. I’m just comparing it to the general population. We all know it’s true. The responders to my earlier post can get overly sensitive about it if they want to. They know that I’m right.
You sound a little jaded, perhaps from some inheritance situation in your own life? I'm sorry if that's the case. It can be a deluge of emotions to see something unfairly distributed or perhaps squandered and leave a bad taste especially as it pertains to the memory of a passed loved one. If you are NOT sour from some inheritance mishap in your family and are just making generalizations based on those around you then damn - surround yourself with new people! And for the record, you're not comparing anything (meaningful) to the general population. You're making outrageous extrapolations from a very small anecdotal set that itself is not at all representative (7 figure!) of the general population.
I am a beneficiary to a trust fund. I would not call the end amount significant nor typical of whatever imagery is conjured up in conjunction with the phrase 'trust fund' (I probably don't and won't ever have an amount constituted as "real family money") but it will definitely help to FI. Though to be honest, I have gleaned more life/financial lessons from being around the person than the money will. I expect a larger sum down the road on my wife's side as well. This won't change anything behavior-wise as I'm/we're already pretty lazy. ;-)
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Less than half of the people I know with real family money do anything other than try to look not lazy.
You sound a little jaded, y wife's side as well. This won't change anything behavior-wise as I'm/we're already pretty lazy. ;-)
Actually, I thought this (simonsez) was a great description of my attitude towards work during FIRE. e.g., start a 10 hour a week lifestyle business to be busy and interested, while being as lazy as I care to.
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Less than half of the people I know with real family money do anything other than try to look not lazy.
You sound a little jaded, y wife's side as well. This won't change anything behavior-wise as I'm/we're already pretty lazy. ;-)
Actually, I thought this (simonsez) was a great description of my attitude towards work during FIRE. e.g., start a 10 hour a week lifestyle business to be busy and interested, while being as lazy as I care to.
Yes, sounds exactly like my dream lifestyle. I have had to work had to be FI. I can't blame anyone who is FI through other means doing the same thing.
While I do believe it's generally good for character development to get that feeling you earned something yourself, I don't think it's a set rule that anyone who inherits something is bound to be a lazy and ungrateful and growing up in poverty is in itself not some kind of enlightening experience. I did intend to get wealthy at a fairly young age because my family was so poor, but the fact that I'm currently on my way to become wealthy one day had to do with many other factors.
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I've inherited very little (with one exception). I inherited 5K from my grandmother when I was in my 30s. Most just went into savings. By the time my father died leaving me 50K I was in my 50s and already FI. Most of it was in an IRA so I just take the RMD each year. . We got a 5 year old car when MIL passed - the same car we bought her 5 years earlier. Now no more older relatives.
The only significant "inheritance" I've received was when DH1 died. Mid-6 figures in 401K/IRA/life insurance. But that's a bit different. Although I will say from a financial point of view death is better than divorce.
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My FIL passed away NYE 2004 leaving behind a $100k life insurance policy and $45k IRA that my wife split with her brother. We're stretching the IRA out over my wife's lifetime and used a portion of life insurance proceeds to pay off the PMI on the 5% down mortgage on our first house and then refinanced into a 15 year loan with the same payment as before. We were in the process of closing on our first investment property when he died. While we were already under contract and could have paid for renovations when the insurance proceeds came in, that extra cash did allow us some flexibility as we were still learning home renovations and we didn't have to borrow as much as initially expected so we did it cheaper. We sold the rehab at the end of 2005 and looking to invest in rental real estate this time, I couldn't find any numbers that I liked so we kept it in cash until the crash of 2008 and we purchased our first rental property for cash. Then we used a HELOC to purchase more properties. We now own enough properties to gross a monthly amount my wife and I could live off of once the loans are paid off, the kids are out of the house and we retire.
We were able to leverage a modest inheritance into laying a good path to FIRE. Money can help but you also need the wherewithal to do good with it. My brother in law leveraged the same money (and an additional $50k he received as a settlement at the same time) into 4 DUIs. Everything else was pissed away.
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So far, I inherited about $15k from my great-uncle (more like a grandpa to me); invested it right away in 2010. But I was also 26 at the time - had I inherited that money earlier in my life I probably would have blown it on some meaningless crap. If you count my parents paying for college as inheritance, then I got that too (which I very much appreciate and intend to do the same for my son as well).
As far as likely inheritance, my wife has a wealthy grandma who will leave a multi-million dollar estate to her mom and uncle. If any of that makes it our way that would be great, but my wife and I are doing just fine on the road to FI so it really won't impact our life in a meaningful fashion and isn't anticipated or expected.
However, when my parents and wife's parents do pass (hopefully 20+ years from now), we will likely inherit several million dollars which we do talk about how to structure to pass along something to my son but also along to a number of charities (Planned Parenthood, Hole in the Wall Gang Fund etc). My wife and I both have pensions and excellent deferred comp plans and anticipate being FI but still working with many month-long breaks from work, so the inheritance really is better distributed to organizations who can put the money to more constructive (subjective I know) use.
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We've hit financial independence with no inherited wealth. The closest we came was earning $1000 in stuff we sold in ebay in exchange for working for two days straight cleaning out a relative's house that resembled the scene of hoarders.
Funny enough, my wife's grandfather returned an outboard motor to sears when it stopped working. He was a Colonial and relentless in trying to get his way. The 1987 motor was new in box and fetched a nice sum on Ebay.
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We have received 0% inherited wealth. (Excluding the tremendous benefits of having parents who weren't living paycheck to paycheck, who were able to take the time to ensure we understood things that we were struggling on in school, who read to us, and who weren't stupid - genetically that makse a difference.)
I had neither of these things - e.g. Inheritance or parents that wanted to be parents. Although, I was genetically lucky and born in the USA so from a young age, due to our school system and keen observation, I came to know I could achieve anything I put my mind to. Achieved FI last year and working on final logistics of leaving the corporate workforce.
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The only significant "inheritance" I've received was when DH1 died. Mid-6 figures in 401K/IRA/life insurance. But that's a bit different. Although I will say from a financial point of view death is better than divorce.
I'm so sorry for your loss. Financially, death is indeed better than divorce. If my s/o were to die before the age of 59, I stand to inherit a life insurance policy that's worth about 1/3 of what we need to be FI, and everything else he owns. The same goes for him if I die before 55. I'm glad to know we've provided for each other in case the worst happens, but I pray we'll never need it.
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I inherited approximately 30k between when my grand-father passed away and my parents were generous enough to pass on the inheritance to myself and my sister instead of keeping it. Also, arguably the greatest "inherited wealth" I have is an education provided and paid for by my parents (through the end of my B.A.), as well as a very strong frugality muscle from my parents.
Considering this strong frugality muscle, I stand to inherit a fairly large amount at the passing of my parents. I don't know the exact number though, nor do I want to - I honestly hope there's nothing left because they will have lived long and large enough to spend it all. I'm not expecting this money, and don't factor it into my FIRE plans. If it happens, it will be for my children or theirs.
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My inherited wealth is zero in terms of actual financial gain. Both my parents were horrible with money and I learned from their example of what not to do. My parents absolutely loved me (and still do), but were young and dumb when it came to finances. One parent will die owing lots of money and the other will most likely spend every last penny of their small retirement fund in their later years.
On a positive note, the “education” I’ve received as a result of their ways has been invaluable. I don’t have a college degree, but through hard work, plus saving and investing, am a member of the two comma club. A few charities will benefit nicely when my DH and I are both gone.
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One thing I've seen in life: if you think funerals with a large estate have all sorts of drama, just imagine how a funeral with ZERO works...those are no fun and can split families, too.
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My dad gave me one hundred dollars when my granddad passed away. I'd love to tell you I invested it and parlayed it into a fortune...but that would be a lie.
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I see no shame in receiving an inheritance. It means you most likely come from people that worked hard and saved their money well. Those are the kind of people this site is about, except they achieved it years ago.
The only shame would be if the heirs mismanage it and go broke.
I am one of the fortunate ones, but my parents & grandparents were better at making money than investing it, and weren't able to pass along any wisdom about investments. This forum is a wealth of shared knowledge that I am very thankful for.
There's no family glitz, glamour, or extravagance to share here. There's plenty of shame & frustration from alcoholism, mental issues, and associated abuses. No reason to share dirty details. Many families experience these things, regardless of income level.
I am very proud of the financial achievements of my family, but saddened by seeing them work too many years and not enjoying life more. The FIRE mindset here is wonderful, and I believe it is the most valuable thing you can give your children.
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I commented awhile back about inheritance in our situation particularly, but wanted to add...
The fact that we stand to inherit is also the byproduct of parents who lived in a very mustachian way, but also because they lived at a different time and had access to a more considerable social safety net that allowed them to accumulate. This isn't a whiny-pants story, but instructive I think.
My in-laws largely lived on one income throughout their lives. My MIL's money management and savings skills could probably put us all to shame, but the fact that they came of age during a time when there was a stronger social safety net and employer provided benefits were more generous is huge.
- My FIL served in the Korean conflict and went to graduate school on the GI bill.
- My in-laws were able to buy their first home under low-interest VA programs.
- My FIL had a Federal defined-benefit pension from his job, from which he retired at 55.
- My FIL received post-retirement health care coverage which bridged until Medicare, very low cost.
- My FIL received long-term care coverage as part of his retirement package.
My parents retired early and received post-retirement health care coverage (free to them), including long-term care coverage. My mom has a defined benefit pension.
Both sets of parents were able to benefit from Medicare and SS when it wasn't totally under siege.
Both sets of parents grew up poor. My FIL's dad lost a farm during the Great Depression. My dad's family were subsistence farmers. Both mom's families were not farmers, but definitely working class. Both sets of parents lived frugally and invested in stocks and real estate and farming investments and built substantial nest eggs. They worked hard and sacrificed and have every reason to be proud of that hard work and those accomplishments. They took some risks that I would not be comfortable with today, but at the same time they had a safety net which protected them from many "worst case scenarios." On the flip side -- and to their credit -- I know they lived through the horrible economies of the 70s, with high interest rates, and made sound financial decisions in horrible conditions.
Even with all of this hard work and these advantages, neither set of parents says that they were "self made." Politically, they are all moderate -- Republicans and Democrats. But neither set buys into the myth that they are totally "self-made." They give generously to charities and support local institutions like the public schools, public libraries, and their churches.
Edited to add: My husband and I both had the distinct advantage of learning responsible financial management from our parents, and this plays a huge role in wealth accumulation and transfer. When I got my first job out of college, my dad sat me down right away to go over my benefits and got me on the path to saving money into an IRA at 22. Once in college I remember him explaining real estate investing and the concept of "leverage" on a legal pad to me. And there are lots of little messages we got along the way -- watching our parents weigh purchases rather than making them impulsively, speeches about buying used cars, and getting used to not being the kids on the block with the boat, the ski vacation, or other expensive toys.
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When my wife and I graduated from college about 2003, she had no debt from a combination of low tuition, scholarships, and parental finances. I had about $40k in debt from a new car purchase (which I am still driving and plan to continue doing for several more years) and tuition loans, which I consolidated at 2.3%. The car was paid off by '06, and because of the low interest rate, I didn't bother trying to retire the loans early. My wife had about $10k from her folks in a Roth. From '06 to '12, we managed to save and invest about $250k on our own, and the next two years, we received two gifts of $100k ($200k). We put 50% down on our house, and continued saving and investing. At the moment, our net worth is in the mid $900ks, and one of our investments looks poised to push that number past $1M in the short term. I am in my late 30s. I'm pretty certain that by avoiding some opportunity costs as a direct result of the gifts (and being less attached to the money and therefore more willing to assume risk), we were free to invest principal it would have taken us another 5 or 6 years to accumulate on our own, if not longer due to early childhood budget changes. The past few years savings have slowed down due to early childhood costs, but in a couple years we'll be finished with that, and I'm anticipating we'll be able to FIRE within the next 5 years. We both also work in jobs that tend to have a lot of freelance opportunities, so even in FIRE, there's a decent chance we'll still be bringing in $20-$30k through periodic work that way. Since we spend almost entirely on our credit card, and only have a handful of expenses outside that, it's been easy to track our expenses and know that without daycare, we spend about $40k a year. Post FIRE, we'll spend $3k less a year on transportation, and another $400/mo less once our house is paid off.
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I received $1000 when my grandmother passed - I was in grad school. I used it to help pay for my month abroad in Australia before I worked on my dissertation hard core.
As far as parental inheritance - I'll get a small amount from my parent, possibly... maybe 50 to 100k. My spouse should be getting significantly more. However, it won't effect anything in our lives, and as everyone has already said, we aren't counting on it.
I think this thread has been really interesting -reading about successes and failures. Thanks for starting it.
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I hope you all collect what your are counting on. My mother in law's nursing home costs were about $95,000 a year- she exhausted all of her assets after about 18 months and then went on Medicaid for 6 years. A long illness (in this case Alzheimer's) can exhaust a robust nest egg.
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Marion - I realize that, which is why I'm not counting on an inheritance from either parent. Just plodding along being mustachian and trying to save as much as possible. I think most of us are like this here which is why we're on this forum.
Really sorry to hear about your MIL. It must be heartbreaking seeing her deteriorate. Alzheimer's is such a cruel illness.
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I commented awhile back about inheritance in our situation particularly, but wanted to add...
The fact that we stand to inherit is also the byproduct of parents who lived in a very mustachian way, but also because they lived at a different time and had access to a more considerable social safety net that allowed them to accumulate. This isn't a whiny-pants story, but instructive I think.
My in-laws largely lived on one income throughout their lives. My MIL's money management and savings skills could probably put us all to shame, but the fact that they came of age during a time when there was a stronger social safety net and employer provided benefits were more generous is huge.
- My FIL served in the Korean conflict and went to graduate school on the GI bill.
- My in-laws were able to buy their first home under low-interest VA programs.
- My FIL had a Federal defined-benefit pension from his job, from which he retired at 55.
- My FIL received post-retirement health care coverage which bridged until Medicare, very low cost.
- My FIL received long-term care coverage as part of his retirement package.
My parents retired early and received post-retirement health care coverage (free to them), including long-term care coverage. My mom has a defined benefit pension.
Both sets of parents were able to benefit from Medicare and SS when it wasn't totally under siege.
Both sets of parents grew up poor. My FIL's dad lost a farm during the Great Depression. My dad's family were subsistence farmers. Both mom's families were not farmers, but definitely working class. Both sets of parents lived frugally and invested in stocks and real estate and farming investments and built substantial nest eggs. They worked hard and sacrificed and have every reason to be proud of that hard work and those accomplishments. They took some risks that I would not be comfortable with today, but at the same time they had a safety net which protected them from many "worst case scenarios." On the flip side -- and to their credit -- I know they lived through the horrible economies of the 70s, with high interest rates, and made sound financial decisions in horrible conditions.
Even with all of this hard work and these advantages, neither set of parents says that they were "self made." Politically, they are all moderate -- Republicans and Democrats. But neither set buys into the myth that they are totally "self-made." They give generously to charities and support local institutions like the public schools, public libraries, and their churches.
Edited to add: My husband and I both had the distinct advantage of learning responsible financial management from our parents, and this plays a huge role in wealth accumulation and transfer. When I got my first job out of college, my dad sat me down right away to go over my benefits and got me on the path to saving money into an IRA at 22. Once in college I remember him explaining real estate investing and the concept of "leverage" on a legal pad to me. And there are lots of little messages we got along the way -- watching our parents weigh purchases rather than making them impulsively, speeches about buying used cars, and getting used to not being the kids on the block with the boat, the ski vacation, or other expensive toys.
A lot of really useful info in here.
I swim at the Y, so I chat with a lot of old guys. And I live in a HCOL area.
Many of them just have a vastly difference life -
They bought houses long before they cost a million bucks
One guy is 70+ with SS, two pensions, and 3 different medical insurances.
My stepdad has SS and a pension, plus Medicare and supplemental insurance from his pension.
That is just very different than today's reality. Not that it *doesn't* exist anymore, but it's just not nearly as common. And the type of pension that you'd get today - from the military, the feds, or local and state government, or even large corporations are much reduced compared to before.
I hope you all collect what your are counting on. My mother in law's nursing home costs were about $95,000 a year- she exhausted all of her assets after about 18 months and then went on Medicaid for 6 years. A long illness (in this case Alzheimer's) can exhaust a robust nest egg.
Yep. My grandfather's 2nd wife easily could have spent all the money in the trusts before it went to the children. She didn't (then again, she had her own house, SS, and a pension.)
My stepfather stands to leave a good estate (maybe a few hundred thousand) to the 3 stepkids. But he's 70, and has cancer. He's got great insurance, but you really don't know what life will send you. He's very frugal, but we keep telling him to ease up a bit. (For example, we finally got him to hire a cleaning person. He's too frail right now to clean!)
My husband's grandparents basically died with nothing. They had a house. Near the end, they sold the house to their kids for $1. When they started to get frail, the house was sold. My inlaws bought a second home to move the grandparents into that was close by, and "rented it back" to them (using the proceeds of the home sale). Eventually they both ended up in a home. Grandma lived until 95. That's a lot of time in a home. And not a very nice one either, because by then it was paid for by Medicaid. Because everything else was gone. I think she was in the home for 15 years? She had Alzheimer's also, and eventually cancer.
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FIL and MIL were early retirees themselves and retired at the age of 50. They did that by a combination of FIl selling his half of a succesful company with 35 or so employees and both living reasonably frugally. FIl (75) has mentioned that his nest egg is reducing fast now, because of the private clinic. He thinks that when he is 82, it might be empty and he will have to depend on the minimum old age benefits he gets from the government.
A couple different ways of looking at this:
1) It's too bad they retired at 50 and burned through much of their nestegg early on. Now he's going to be living very modestly on government benefits in his final years.
2) It's AWESOME that they decided to retire at 50 and had a chance to really enjoy life while they were still physically and mentally able to do so.
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FIL and MIL were early retirees themselves and retired at the age of 50. They did that by a combination of FIl selling his half of a succesful company with 35 or so employees and both living reasonably frugally. FIl (75) has mentioned that his nest egg is reducing fast now, because of the private clinic. He thinks that when he is 82, it might be empty and he will have to depend on the minimum old age benefits he gets from the government.
A couple different ways of looking at this:
1) It's too bad they retired at 50 and burned through much of their nestegg early on. Now he's going to be living very modestly on government benefits in his final years.
2) It's AWESOME that they decided to retire at 50 and had a chance to really enjoy life while they were still physically and mentally able to do so.
We also think that he at the age of 82 might not be so active anymore and probably doesn't need as much money as he does today. So DH and I don't think this will be a problem.
I also think he has been very lucky being able to retire at 50 and had so many good years in good health. This is of course where DH got his first idea of retiring at 50, which he mentioned about 10 years ago when we found out we had been saving a lot during the previous years.. We just didn't realise we could have accellerated FIRE by doing more hardcore saving.
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We also think that he at the age of 82 might not be so active anymore and probably doesn't need as much money as he does today.
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Read the post above about the high costs of nursing homes.
$100K per year, for ? number of years, and possibly times 2 (mom & dad) can consume a lot of money.
My dad's in a skilled nursing facility because he has a feeding tube, vision impairment, he rarely walks now, and early dementia. It's about $7500 per month.
Mom's in a retirement apartment that includes meals & weekly housekeeping for $3200 per month, plus $1000 spending money.
Don't know how long dad will live. Maybe 6 months, maybe 6 years... Mom's physically okay now, but I expect her health will likely begin to decline within the next 12-24 months, and her costs will begin to increase.
Getting old can get expensive, and nobody knows how long it will last. :(
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My dad's in a skilled nursing facility because he has a feeding tube, vision impairment, he rarely walks now, and early dementia. It's about $7500 per month.
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Getting old can get expensive, and nobody knows how long it will last. :(
I don't mean to sound insensitive about this. This has nothing to do with your dad -- it's just that your description of his situation reminds me of something I've thought about quite a lot.
Extremely high expenses to prolong a (generally) poor quality of life in old age has always bothered me. I'm not judging others' decisions to spend their own money this way on themselves or family. And I know that my perspective could very well change if I'm ever in this situation. But where I stand now, I feel like I'd much rather be willingly euthanized and leave an inheritance (to heirs or charity) than blow through my nestegg to just barely stay alive for a while and not even enjoy it.
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My dad's in a skilled nursing facility because he has a feeding tube, vision impairment, he rarely walks now, and early dementia. It's about $7500 per month.
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Getting old can get expensive, and nobody knows how long it will last. :(
I don't mean to sound insensitive about this. This has nothing to do with your dad -- it's just that your description of his situation reminds me of something I've thought about quite a lot.
Extremely high expenses to prolong a (generally) poor quality of life in old age has always bothered me. I'm not judging others' decisions to spend their own money this way on themselves or family. And I know that my perspective could very well change if I'm ever in this situation. But where I stand now, I feel like I'd much rather be willingly euthanized and leave an inheritance (to heirs or charity) than blow through my nestegg to just barely stay alive for a while and not even enjoy it.
Ditto. But that's not a legal option in the US.
(Actually, since he's being fed through a feeding tube he can refuse feedings. Also, when the dementia progresses to a certain level we, the family, can choose to withhold feedings. We were told many dementia patients eventually refuse food towards the end.)
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2) It's AWESOME that they decided to retire at 50 and had a chance to really enjoy life while they were still physically and mentally able to do so.
This this this this this!
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My dad's in a skilled nursing facility because he has a feeding tube, vision impairment, he rarely walks now, and early dementia. It's about $7500 per month.
...
Getting old can get expensive, and nobody knows how long it will last. :(
I don't mean to sound insensitive about this. This has nothing to do with your dad -- it's just that your description of his situation reminds me of something I've thought about quite a lot.
Extremely high expenses to prolong a (generally) poor quality of life in old age has always bothered me. I'm not judging others' decisions to spend their own money this way on themselves or family. And I know that my perspective could very well change if I'm ever in this situation. But where I stand now, I feel like I'd much rather be willingly euthanized and leave an inheritance (to heirs or charity) than blow through my nestegg to just barely stay alive for a while and not even enjoy it.
Ditto. But that's not a legal option in the US.
(Actually, since he's being fed through a feeding tube he can refuse feedings. Also, when the dementia progresses to a certain level we, the family, can choose to withhold feedings. We were told many dementia patients eventually refuse food towards the end.)
It is legal in certain states in the US, but only to the point where you’re still competent. I live in one of those states and it certainly made us feel a bit better about having this be where we live out our retirement and elderly years.
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My parents in law live in the Netherlands where euthenasia is legal. MIL has had a will for many years, many times reviewed and resigned with same statement. It says that she does not want to be revived if she collapses (get a heart attack or similar). The nursing home has gotten this as an instruction. She has also signed a euthenasia letter that will be executed if she mentally doesn't recognize her family anymore. So far, she is mentally good enough, so this has not been an issue yet. I think her body will collaps before she stops recognizing her family, especially FIL.
I understand her choice very well. If she and her frail body with dement mind will collapse, just let it be over. That would be best for her. Now she sits in a nursing home and cannot do anything at all, not even read or knit.
Most people who perform euthenasia choose to end their lives just a few weeks before that natural estimated death, to avoid the last period with a lots of pain and discomfort.
Technically, the written declaration of will is not valid when someone is diagnosed with dementia, so active euthanasia wouldn't be possible. ( There has been a lot of BS in American media about this due to Senator Rick Santorum who made false claims about this). You don't just need the legal paperwork, you need to be of sound mind to express that this is still what you want right now.
In practice though, care homes are very sensitive to their patients' last will. Many people want to die a "gentle death" and when someone who is elderly or ill expresses the wish to not extend their suffering longer than necessary, they will assist people getting that "gentle death". They will not push food if someone decides to stop eating. Many patients ask to be sedated after some time without food and die gently in their sleep. It's the accepted view that there's no point in extending life as long as possible, at all costs, if there's no quality of life at all.
An aunt of mine died a few years ago aged nearly 90 from a massive stroke. She had declared that she didn't want any invasive procedures to extend her life, like your MIL has done. She was in a care home when she had this massive stroke. She was taken to hospital, but they didn't put her on a ventilator. She didn't regain consciousness and she died calmly a few days later with her family by her side. Another uncle developed early stages of dementia after having several strokes that also partially paralyzed him. He refused food, which many people with dementia seem to do. He was physically weak, so the second day without food he couldn't get out of bed. The next day he was slipping in and out of consciousness while receiving the last rites. He died two days later. I'd much prefer that kind of death for my relatives, rather than years of misery from Alzheimer's.
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3 years ago we received a huge windfall inheritance from a wealthy aunt (high six figures). This is what started us on our FI path, as we were not good with money and knew the statistics about most people who receive windfalls blowing through their money within 5 years. We really were in need of a financial education so we did a lot of research starting with Bogleheads and eventually came across MMM. We have learned so much over these past few years. We used about half of the money to buy our first house and the rest went to into Vanguard. Although we never used any of the inheritance to finance our business, knowing that we had it just in case allowed us to move forward with growing our business. Our business is now what will bring us to FI rapidly--and I'm not sure we would have been comfortable with the risks if we didn't have the inheritence to fall back on.
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We have received 0% inherited wealth. (Excluding the tremendous benefits of having parents who weren't living paycheck to paycheck, who were able to take the time to ensure we understood things that we were struggling on in school, who read to us, and who weren't stupid - genetically that makse a difference.)
My situation exactly. With 5 siblings and my parents living in a LCOL area, I expect to receive nothing from them for inheritance because their net worth after any long term care will be so little that divided amongst my siblings and their children any amount I might inherit would be a token amount. Both parents worked in the public sector so their retirement savings are tied up in pensions that die with them so no inter generational transfer of wealth beyond house equity.
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3 years ago we received a huge windfall inheritance from a wealthy aunt (high six figures). This is what started us on our FI path, as we were not good with money and knew the statistics about most people who receive windfalls blowing through their money within 5 years. We really were in need of a financial education so we did a lot of research starting with Bogleheads and eventually came across MMM. We have learned so much over these past few years. We used about half of the money to buy our first house and the rest went to into Vanguard. Although we never used any of the inheritance to finance our business, knowing that we had it just in case allowed us to move forward with growing our business. Our business is now what will bring us to FI rapidly--and I'm not sure we would have been comfortable with the risks if we didn't have the inheritence to fall back on.
I'll bet your aunt would be proud of what you've learned and how you used her money. Good for you!
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About a year ago I inherited a one-fifth share of my fathers estate that came via my stepmother after she keeled over. Total amount was a touch over $200k. Apart from buying a few toys (total of about $5k) and using around $20k to finish our renovations debt-free the rest got invested. We were on the way to FI but this has put us a lot closer and we recently added a second comma to our liquid assets.
My brother used his share to pay off their mortgage and I know her son used a chunk of his share to buy a new car. Not sure what her two daughters did with theirs but based on little bits and pieces we've heard they most likely blew the lot. So I like to think that at least my brother and I used our bit wisely.
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I hope you all collect what your are counting on. My mother in law's nursing home costs were about $95,000 a year- she exhausted all of her assets after about 18 months and then went on Medicaid for 6 years. A long illness (in this case Alzheimer's) can exhaust a robust nest egg.
Exactly why I do not count on an inheritance from my folks. I am praying their money lasts long enough to take care of them, that they run down at the same time the money runs out.
Alzheimer's, and all other types of dementia, suck!
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We have been incredibly fortunate with inheritances. I grew up in a solid middle class setting and was frankly shocked when my third of my parents estate amounted to around $180K. On my wife's side, her mother passed and left around $300K. We have been informed that via an aunt that passed recently we may be receiving another inheritance.
With these very significant windfalls, we have paid off the mortgage ( we live in a modest house for our area). We have 3 kids currently all in college, we are using the inheritance money to put them through college.
We plan to set up college savings plans for future grandchildren. Basically pass it along.
The psychology surrounding inheritances is quite complex.I am not surprised to see very few people coming forward with information about inheritances received. There can be guilt, embarrassment even. A feeling that this was not "earned" money, and shame that may accompany that. I have certainly had to work through that, and part of me posting this is to help me process our own good fortune.
I believe that there are many many people reading this thread who have received - or are likely to receive - very significant inheritances. They are not posting because they are working through their issues around inheritances.
Yes...I am an only child and both of my parents are quite well off. On my newly started journal I have no problem detailing all of my earned money to the dollar on my way to FI...but don't even like to think about the number that my parents might leave me much less write it down. For one obvious reason, they are still herel. So it seems morbid and like bad luck or something to think about them passing away. For another, I don't actually know how much there will be as medical expenses come up as they get older. But for another, it makes me feel like all my hard work, budgeting, saving, investing etc might not really matter at all. Instead of being proud to FIRE due to my own hard work, might it one day feel like "cheating"?
So for now I'm just ignoring possible inheritances and carrying on and flexing my frugal muscles :)
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I didn't inherit anything from my family, have been self-supporting since I was a teen, and earned my own scholarships to university up through my doctorate. My husband benefited from a trust fund set up by his grandfather to fund undergraduate degrees for all the grandchildren. This made it possible for my husband to attend a very prestigious institution, but at a time in his life when he wasn't particularly diligent, so he feels he didn't take full advantage of the opportunity... But at least he didn't generate any debt. Then he changed fields entirely for his doctorate, and earned his own scholarship for that. A few years ago, the youngest grandchild finally finished their BA, which meant that the trust had to be dissolved and the remaining funds distributed evenly to the grandkids. The timing was terrible - right on top of the crash basically. There was some flexibility in the trust document about the timing of the dissolution, but we were the only ones not desperate for cash, so everyone else voted to cash out immediately... So my husband received a distribution of about $30,000 from that.
For the past few years, we've been under increasing pressure to accept money from my husband's parents, because they want to treat their kids equally, and my husband's sibling got substantial help from them to buy a house. My in-laws really wanted to gift us an equal amount - but were only willing to gift it toward a house deposit. Because we are in a very expensive housing market, and aren't sure we are going to continue to live in the same city for much longer, we batted this back. But the pressure is on again because sibling has moved and, although they have sold house #1, are aiming for a much more expensive house #2 and the proceeds from house #1 are insufficient for the deposit... So my husband's parents are planning to top up their funds again, and are again pressuring us to buy a house so that they can transfer the equivalent cumulative amount to help us purchase a property...
We still aren't in a position where it's rational for us to buy (but this time around, we expect this to change in the next 12-18 months, as my husband finishes his doctorate and we are in a better position to relocate (or stay put) for the foreseeable future). I don't know the scale of what my in-laws are proposing - it's fluctuated at different points from $30,000-$80,000, and presumably depends on how expensive the sibling's house is, so it's substantial, although not life-changing for us at this point. We already have enough money put aside for a house deposit - that isn't why we haven't purchased. We may end up rejecting the money, because my husband's parents are a bit fussy about the 'standard' of the house, and we expect they will be a bit horrified at any fixer-upper we might purchase... So we are not factoring these funds into any calculations - not even our calculations for what house we might purchase.
Our FIRE calculations assume no inheritance. I do suspect there will be some, depending on eventual medical expenses and such, but I think it's not unlikely that these will go to the grandkids, rather than to our generation.
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I suppose the "only gifting it toward a house deposit" thing makes sense, because anything more liquid than that could be...mismanaged.
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$50k in my early 30s. I invested it, but my first marriage, a few years later, cost me $60k. So, it helped me avoid a major setback to FIRE.
We do not expect any further inheritances. My uncle could leave us millions, but will probably bequeath it all to a local dog shelter. I do kinda wish the portion that was my grandfather's money ($300k) would go to my dad. Here's why: my aunt was cut out of the will in order to prevent her from suing. Yeah, she's like that. The verbal agreement was that my father and my uncle would give her her portion. Well, when the time came, my uncle refused. My father paid his sister her third out of his half. My aunt promptly blew everything, as we knew she would, but those are her decisions. So, out of the 3 siblings, the only one that did the right thing got shorted. Does not seem fair...
My parents and my in-laws may leave a substantial amount, but that very much depends on circumstance, and we just want them to be comfortable and enjoy their money.
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Zero, nada,...We came from poor, humble beginnings as broke, poor new immigrants in US and Canada, who put ourselves through school, worked 2-3 jobs at the same time, barely had food to eat, lived in not so safe neighborhood surrounded by alcoholics, gang members, gamblers, prostitutes, drug dealers/users,…but were able to overcome the challenges, graduate college, and get good jobs and now make $400K+/yr.
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No inheritance yet, but anticipate to get some over the next 20 years or so. My husbands parents are in their 70s in good health. They own a modest home and have some savings. My parents are in their 60s, I imagine doing a bit better. The real question mark is my uncle. He's in poor health now, but built a successful small business from nothing over the course of his life and is now wealthy by any standard. He has an adult son, who I believe is estranged, but who knows. He married my aunt who has no kids--but my sister and I were close to her growing up and still are. Once he dies, I sincerely hope all his money goes to my aunt--she's been caring for him for years, she deserves it. After she passes away, it may come to me and my sister.
Of course, all of this depends on how much they end up spending on end of life care. My understanding is that being in a nursing home can drain savings at an alarming rate. But it's possible that the inheritance from my uncle could be a "life changing" amount.
We factor zero of this into our retirement plans. First, there are just too many unknowns to plan on it. And second, it feels gross. I want to focus on enjoying my family while they're here.
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I suppose the "only gifting it toward a house deposit" thing makes sense, because anything more liquid than that could be...mismanaged.
Oh I agree with this - I understand what they are worried about. Although, if we were the mismanaging type, it's fairly easy to draw money back out of a mortgage... But we've been very clear that we are able to purchase property on our own, without help, once we are ready to do it - it just doesn't make sense to buy, in this market, when we are actively on the job market and might relocate, potentially even overseas... I think they probably don't believe this is true, and are assuming that there must be a financial issue that we aren't fessing up - this probably seems more likely because our household income is significantly lower than the other sibling's, who actively asks for help...
Personally, we are worried that they are overgifting, and might not be estimating their own retirement financial needs accurately... So if they do give anything, our plan would be to sequester some equivalent in case they need it back in a decade or so...
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No money of any kind. My parents are both still alive & well. We help them out, and I hope they spend all of their limited (but well planned) retirement funds. My mom has a disabled sister. If my parents pass with any money, it will go towards her care, assuming she's still alive. My husband's parents live in a country where the US forbids any transfer of funds. At most, if they could, they would have $5-10K for us. They have expressed their sadness they cannot share with us, which is exceptionally sweet, but obviously not a game changer. Instead, they will instead pass it on 100% of their estate to my husband's sister.
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No inherited money!
Canada is the land of immigrants eh?
Your parents arrive a few years before you're born, owning zero, maybe speaking no English.
By the time you're in your mid-20s they've paid off a mortgage, possibly helped their own parents to emigrate and pay off their mortgage, and you're paying your own way through your education--which is totally doable.
By the time you're middle-aged they're retired and watching you enjoy a professional career, and possibly early retirement.
This was all possible in the 2nd half of the 20th century in Canada. Amazing!
And in our case we could always have 2-week vacations (OK, camping) and weekends off.
This has happened to so many families . . . it's been a truly blessed time and place for anyone halfway diligent. The opportunities, the social and economic mobility, may be taken for granted, but they're fantastic.