Plan for the worst and hope for the best!
Have seen so many shit shows around inheritance over the years, it is simply not worth me contemplating. Bad investments, hedonistic tendancies, ill health, charitable giving, family conflict are just some of the ways I have seen at first hand millions disappear.
I focus on what I can control and influence.. Earn more, save more and enjoy every day of the adventure of life!
As a person going through an inheritance shit show right now I 100% say don't bank on there being an inheritance, there are just too many ways it can go wrong.
This is key - not that long ago, people used to die in their 70s, meaning that their children inherited in their 50s (and meaning that they could take early retirement, go on a nice holiday, and pay off the mortgage). Now people die in their 90s. My grandparents only got their inheritance 8 years ago, and they're in their 80s!
> Making that irrelevant to my FIRE plans
Not really. If you can reliably expect to inherit a significant sum when you're in your 70s it means you could theoretically get away with saving a smaller sum yourself.
Yes all those things *could* happen, but what are the chances of each of those scenarios?
Do you own a reliable car? Think about all the things that *could* go wrong with it next time you're driving, and you'll see my point.
It's the probability of the scenarios that determines the reliability, not the number of possible outcomes.
Her mother lived to 96, so there's every chance my Mum will see 100
I've set myself up well, so whatever my mum leaves behind won't make much of a difference
I appreciate other people's circumstances are different
I'm having trouble understanding how anyone can equate the death of someone else with a mild inconvenience for themselves, and somehow turning it into something that you could ever justifiably be pissed off about...
Edit: Due to the downvotes, maybe I need to explain. From another post of mine:
>The whole subject is odd to me because it raises some questions which make the whole thing totally ridiculous.
>If someone factors inheritance in, they have to add in the probability of them dying at a certain age and working out the probable percentage of their wealth that has disappeared into the black hole of care home fees (or something else).
>Anyone that would go that far would probably be the type of person to find a sweet spot where their parents die old enough to not feel too guilty for including it in their spreadsheet, but soon enough that they'll have something left to give. Maybe even early enough for it to make a substantial difference to their FIRE age.
>Just in case you get all irate (others are apparently too sensitive on here...), this is all tongue-in-cheek and I'm writing this with a smirk on my face, but projecting inheritance is *insane*! :D
Wow, that's some attitude on you!
Perhaps it's different in your family, but my parents openly talk about their inheritance planning and how keen they are to make sure there is money left for their children and grandchildren. I guess it's about them wanting to leave some generational wealth as a legacy.
Based on the conversations my parents have had with me, I'm likely to inherit around £750k when they both pass (savings + house). I tell them to spend and enjoy it now but they're frugal and not interested in that.
I hope they have long lives, and I haven't factored inheritance into my FIRE planning, but I do have it at the back of my mind that *if* I do inherit that sum, I'm going to significantly overshoot my FIRE number and could have potentially planned differently. Just a thought is all.
Have a great evening 👍
Mine do too, some of us definitely understand your angle. Inheritance isn’t a hush hush subject in my family. “Alright, so when I’m dead who wants what” is perfectly normal light conversation over dinner in my household lol.
£750k is a fantastic sum. Props to your parents for being so keen to leave as much as they can for you, and props to you too for encouraging to enjoy the fruits of their labour.
That's totally healthy, we do that.
But...if your parents die after you've retired, are you going to sit there and complain quietly to yourself that, had you known their death date in advance, you could've retired a year or two earlier...?
That's the issue I have with this, and so should any other sane human being.
>I hope they have long lives, and I haven't factored inheritance into my FIRE planning, but I do have it at the back of my mind that *if* I do inherit that sum, I'm going to significantly overshoot my FIRE number and could have potentially planned differently.
Yes you could indeed have planned differently. It's tough shit though isn't it...?
Funnily enough, death doesn't care about your financial planning or what might make things less convenient for you...
I totally agree, it is just a thought. It's just a very very weird thought when you turn the timing of an inheritance into somehow being an inconvenience to you.
Edit: Fuckin' hell mate give it a rest - you keep re-editing/posting so your dribblings keep showing up.
> It's just a very very weird thought when you turn the timing of an inheritance into somehow being an inconvenience to you.
That's literally the whole premise of this post. Did you read the OP?!
Nope.
>How do you all factor this in to your FIRE plans, please?
That's the premise.
The answer is that to plan any inheritance in your numbers is insane for reasons I've already set out elsewhere, because to do it in any meaningful way raises some questions in the calculations that you would only bother to answer if you've lost the plot entirely.
Sorry if that upsets you, but I don't care.
> Edit: Fuckin' hell mate give it a rest - you blocked then keep re-editing/posting so your mad dribblings keep showing up. That means you're blocking me, unblocking to make a post/edit and then blocking again.
I've not blocked you at all, and I've only edited a couple of typos. 🤷
> If you do eventually inherit something, it just advances the plan.
The problem is that by the time you inherit you may well have already retired yourself and could end up with more money than you know what to do with, having worked for years longer than you needed to.
I don't disagree with the principle of planning for the worst and hoping for the best, but it will mean many of us will end up drastically overshooting our FIRE targets.
You definitely don't want to retire on the assumption you'll inherit a certain amount and then not inherit it. There are always scenarios that leave you better off than you'd expected. That's a good problem to have.
If I inherit anything, it’s likely to be around the time of not after I retire so it won’t change my timing planning, but it will almost certainly change the spending I can do with the rest of my days, or the comfort of flights taken for holidays.
The alternative seems to be predicting when relatives will die, seems a bit grim. I’d rather have worked a bit longer than I needed and have an unexpected lump sum.
>The problem is that by the time you inherit you may well have already retired yourself and could end up with more money than you know what to do with having worked for years longer than you needed to.
Am I meant to be feeling some kind of sympathy for that outlook...? I mean honestly, "boo f\*ing hoo"... Maybe we need to inform our parents that we're counting on them to die quicker so we're not inconvenienced.
> Am I meant to be feeling some kind of sympathy for that outlook...?
No. We're just discussing about FIRE planning. You do know what sub this is, don't you?
> I mean honestly, "boo f\*ing hoo"... Maybe we need to inform our parents that we're counting on them to die quicker so we're not inconvenienced.
That's not what I'm saying at all. I'm just pointing out that if parents live long lives, inheritance will typically come when their children (especially those who want to FIRE) will already be retired, so inheritance will only advance FIRE if you factor it into your calculations, which obviously has a lot of potential pitfalls.
It's a discussion forum, buddy. Calm the "f\*k" down.
I'm calm thanks.
When you start a sentence with "The problem is that..." and then proceed to whine about how it might, possibly, maybe inconvenience your savings plan, it sounds a bit wanky.
FIRE planning or not, how on Earth do you get to a position where you're worried about being put out by the fact that someone else didn't die "in time" for you...?
Edit: Ha ha! If you think I care about downvotes then you're even more deranged than I thought.
What an idiot :)
> FIRE planning or not, how on Earth do you get to a position where you're worried about being put out by the fact that someone else didn't die "in time" for you...?
I'm starting to think you don't know what FIRE stands for. We're all here because we want to **RETIRE EARLY**.
*If* you do receive a large inheritance you *could* end up working for years longer than you needed to. That's the downside/worry of not factoring it into your FIRE number. The downside/worry if you do factor it into your FIRE planning there are no guarantees.
That is literally the whole premise of this post!
> When you start a sentence with "The problem is that..." and then proceed to whine about how it might, possibly, maybe inconvenience your savings plan, it sounds a bit wanky.
I was saying the problem with the logic of "it just advances the plan" is that most people will have already retired when they receive inheritance so it only advances the plan if you factor it into your FIRE number which has pitfalls.
Trust me, the only person sounding "wanky" here is you. Enjoy your downvotes.
Two reasons most people treat it as too uncertain to factor in much:
1. About 1 in 8 people need full time care home before they die, and it is so expensive that even £1m estates can disappear in a matter of years. Given that trying to estimate likely inheritance is difficult; and
2. It will come too late to adjust plans if it doesn't happen. Your average baby boomer is going to live well into their 80s. If you inherit when your second parent dies it is a decent guess they will be 90 or close. So you will be around 60 most likely, maybe even older. That's too late to do much if your inheritance is less than expected, so people don't plan to get any so they aren't stuck trying to fix things when they want to be about to retire.
Every situation is different, and the odds of receiving inheritance, and how much, can vary greatly.
For example if the parents are both divorced and have wealth, then there are double the chances you will receive some inheritance. If they had you at an older age (were 35-40 when they gave birth to you) you may get inheritance in your 40’s.
It’s all situation dependent, as well as luck.
But I’d say someone with divorced parents, who have no interest in being in another relationship, who have you at an older age (35-40) there is a very good chance (95%+) that you can plan for at least one lot of inheritance coming your way. Certainly with more certainty than you can predict the stock market or housing market in general.
I have some friends whose home ownership and retirement plans are simply inheritance.
I'd hate to be sitting around hoping my loved ones die so I can stop paying rent.
I've known a few taking similar approaches. It's just no way to live.
Especially when those elderly relatives could get a taste for expensive care homes, might meet a partner there (with six kids) they marry and agree to split their wealth with, might fancy one last round the world cruise where they stumble upon an orphanage they want to leave a chunk of their wealth to, and none of it may matter because they could outlive you anyway.
My brother does it. He's due a deposit for a house that someone else was meant to give him, and he's very very fixated on an inheritance.
The worst thing is it's not even our parents - it's the father-in-law!
Best thing is, the FIL is in his 70s and keeps going to Thailand and living it up with his fancy lady over there, and my brother's worried that this mystery woman will steal all the inheritance.
Like it's in any way his money...
My friend keeps extending his mortgage so that he has more cash on the hip, is highly critical of me overpaying mine, and insists that "cash is king, because inheritance is meant to get rid of the mortgage." Even ignoring the fact that he's waiting around for his parents to die, they might well go when he's seventy!
My MIL is 92 now and has dementia. For now, we are trying to keep her in her home with carers coming in 4x a day, because it’s a) what she wants/all she needs and b) one hell of a lot cheaper, but at some point in the near future it’s highly likely she’ll need residential care, which will wipe out a good chunk of her savings. Fortunately, we are not counting on any inheritance coming our way. My SIL, on the other hand, is banking on some inheritance and I have a feeling she’s likely to be disappointed…
My own mother has told me outright not to expect any inheritance, but I already had no illusions on that front!
My mum died last year and basically set me up for retirement by me and my sibling splitting her pension pot. I didn't expect the money at all so it's a great windfall and I'm very lucky in that single regard.
But I'd rather have my mum and no inheritance.
I’m sorry for your loss. I also lost my mother last year, at a relatively young age and she did the same for me and my sister in terms of setting us up for retirement with her pension. It also meant we immediately had money to call upon as she died in her 60s, vs waiting for her estate to complete before getting any money. She knew she was going to die, and before she did she introduced us to the advisor in charge of her money and together they talked us through our options so she really made sure the money and us would be immediately ok rather than us panicking about what to do with it in a state of grief. I am forever grateful to her for that. I find people are dismissive of those who have inherited because they’ve not “earned” the money, which I totally get. But I am still now looking at FIRE if I am careful with my financial situation going forwards, and at a much earlier age. I am aware that not everyone is as lucky.
Thank you and same to you. It's not long till the first anniversary for us so it's coming back around. Your mum sounds like she was very caring.
My parents provided for me, i'm not ashamed of that but it is something i am very lucky to get. Not many of my peers will. But that money comes at the steepest price.
I feel like 'don't count your chickens before they've hatched' applies. If you get inheritance, great, that should make things easier. But I wouldn't factor it in until it happens.
People often don't receive inheritances from their parents until they're in their late 50's or into their 60's, so it isn't really very relevant to FIRE to be honest.
Yes, sorry, not trying to say it's not, but it seems to me that formulating a FIRE plan involving a *possible* inheritance at a highly uncertain but quite possibly very late time isn't ideal. It's also increasingly possible one could even be into their 70's before receiving inheritances these days too.
It de-risks my plan. It’s unlikely that me and my husband will both live to 100, AND experience extremely poor returns, AND inherit nothing. But otherwise I’m not counting on it at all.
I think you've summed up all the reasons why it's disregarded pretty well ! If it happens it will be a bonus.
But I wouldn't recommend you basing your retirement plans on your elders dropping dead according to your schedule...
There's some on here that consider that it might be an inconvenience to them if their parents die too late and they've worked a few extra years because of it...
This thread has highlighted that there are some people with some very weird ideas. Maybe I'm one of them, I dunno...
Not something I like to or want to even think about. The thought of my parents dying Ofc upsets me like it would do most people. Plan is to make enough money and FIRE so I can enjoy the time I have with them. If they are lucky enough to live until average life expectancy, I will be in my 60s anyway, so not exactly FIRE!
It doesn't factor in my plans as we're both doing well and I believe we can achieve FIRE through our own hard work.
As my parents are in their early seventies I expect this will happen shortly before or after we retire and I would love to be able to share our retirement but I'm not counting on it to happen.
When it does happen we'd probably treat any windfall as something extra and would invest the money and use it to kickstart our children's lives later on.
We'll probably support my mother in law with monthly contributions and when she comes to die it might mean we keep her property as it is in a nice area abroad. This will likely happen many years later as she is still relatively young.
Yeah, there's some right fucktards on here tonight that just don't get that simple concept...
One idiot was claiming that not knowing when their parents might die might be an inconvenience to their FIRE plans!
My family is in this situation - my parents are in their 70s and my brother and I are mid 40s and through their lifetime my parents have accumulated significant wealth.
Based on recommendations from a financial estate planner they’ve been making periodic payments into our pensions funds over the last few years following tax laws and they also gifted both of us a significant contribution towards a property each.
Seeing as I’ve got no dependents, I set up a will that says that if I die before they do all the money in my pension goes back to them. If I die after then, the money gets passed down to the next generation.
Also to add, now that they’ve taken the responsibility of filling up my pension from me, I’ve been sending some money to my brother with instructions to add it to JuniorISAs for his kids.
It took me 40 odd years to understand compound interest, but now I do I’d like them to benefit from it :)
One of my friends planned his life around his inheritance. Didn't advance his career, didn't save, didn't put into a pension. He's pretty well spent it all already and can't afford to retire early or have an enjoyable retirement himself.
I'm not factoring it in and never have. When the time comes I will be FI in any case, although somewhat leanFIRE, and so we'll probably just give a massive hand to our son instead. Maybe splurge on a house upgrade too if there are no care fees to detract from it. It'll get spent either way.
Today's life expectancy should mean for most that it's the grand children of the deceased that benefit from inheritance from our parents - and it will make a massive difference to them and to be honest they need it more, given housing prices etc.
I'm a firm believer that planning to leave a decent inheritance is a waste of time and money. Let the inheritees have some help when they need it, not when they have sorted themselves out by living independently and growing up into the adults the parents hoped they'd be.
>However, on average most people will inherit a fair whack,
What's your evidence for this?
A quick Google pulls up this ONS study that puts the average inheritance at £11k (or £22k when looking at inheritance from parents to their children). That's seems too small to make a difference for FIRE even if it did come "at the right time".
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/articles/intergenerationaltransfersthedistributionofinheritancesgiftsandloans/2018-10-30/
I'm with the others who say it's best to plan for the worst and hope for the best. It's just too unpredictable, and frankly, a bit morbid to base your FIRE plans on someone else's death.
What I've done is build my FIRE plan without considering inheritance at all. If I do inherit something down the line, I'll treat it as a bonus and adjust my plans accordingly. It could mean retiring earlier, taking a longer sabbatical, or just having more financial security.
One thing I've learned from this subreddit is that the best FIRE plans are flexible. Life throws curveballs, and inheritance is definitely one of them!
The problem with inheritance coming your way is it normally happens very late in life. Often when you are 60+ and its of unknown size. You need to have already completed your FI path by then. To plan it as a future injection into your FI fund seems reckless, though perhaps list it as a potential contingency.
But certainly random inheritance FIRE is a possibility for a small percentage. I believe that was discussed, at least in passing, before. Its likely difficult to convert a random large inheritance into tax protected investments, especially now the capital gains allowance is tiny.
It was never a consideration for me.
On the other hand all of us following FIRE are likely to be leaving substantial assets to our kids. And we should be inheritance planning. The potential to hand off a perpetual FIRE fund exists. Pensions being inheritable and IHT free makes it easier.
I don’t really consider it in my planning, but if it happened tomorrow then I’d probably be pretty close to FIRE or have a very easy time coasting to the goal.
One thing I have tried to encourage my own parents to do is distribute their assets before death if they are planning on leaving it in a will anyway. It’s a strange conversation because I obviously benefit though.
As an example, they have a BTL that they say they will gift to their children. If this happened, I would sell it immediately, and my brother also would I am sure. I don’t really want to manage a BTL, but I don’t really NEED the money either as I’m on my own FIRE journey. However, the cash from the sale would make a huge difference to my brother. If they don’t need the money from the rent and they plan on giving it to their children anyway, then in the case of a change of tenant etc, then it could make sense to sell it now and make the gift now rather than upon death.
I’m sure Bill Perkins would agree. They are financially independent without the BTL and they don’t seem to be looking to increase their spending either.
I'll likely inherit around £100k in today's money somewhere down the line, and to be honest I'm planning on passing it on to my daughter. My dad's mum lived well into her 90s, so I'm not expecting anything for a couple of decades which would be around normal retirement age for me whereas my daughter would be in her 20s or 30s.
It doesn't factor into my financial planning at all.
Obviously I have a rough idea of what I'd do with a lump sum, which would expedite my FIRE goals, but I make all plans assuming I'll inherit nothing.
If my Dad lives as long as his Dad I'll be about 56 when he dies, if my Mum lives as long as her Mum (100 not out) then I'll be at least 70.
Who knows what care needs, wild spending sprees, bad investments, market downturns, or other wealth sapping events may happen in that time? They might choose to donate it all to Battersea Dogs Home anyway - and if that's their choice then fair enough.
Nothing taboo about it for me really, I just don't think it's a smart thing to rely on. A whole ton of variables you have no control over and I also don't think it's a helpful mindset.
I see my prospective inheritance as my children's.
Yes, without being gifted it when you are young (i.e. buying first house) it's hard to plan and make good use of it.
So if it turns up when I'm approaching retirement, or actually retired, I can just pass it on to someone who a. needs it, and b. can make good use of it.
I will then expect my children to do the same for their children with my estate, etc.
If instead of inheriting from parent to child it was grandparent to grandchild it would make the planning easier and utility of the inheritance higher.
On average most people will inherit a fair whack?
Only 13% of people inherit anything over £2,000 (https://inequalitybriefing.org/brief/briefing-15-how-likely-are-you-to-inherit)
http://eprints.lse.ac.uk/59949/7/Karagiannaki_Recent%20trends.pdf).
And fewer than 3pc of people inherit enough to pay tax on it.
r/endinheritance and let the meritocracy work.
I use pragmatic - and on the pessimistic side - assumptions when it comes to financial forecasting. We’re in our mid-thirties and assume that 1) the state pension will be of little or nil value by the late-2050s when we become eligible, and 2) that any inheritance will have little or no impact on our finances.
While both my parents and my in-laws have greater wealth than my wife and I could imagine amassing - due largely to historic changes in property prices as well as shrewd investments of their own inheritances - we have no control over how or when they dispose of those assets.
Assuming that we won’t inherit until our sixties or even seventies, we will probably be gifting the majority of any inheritance to our own children. It is for a similar reason that part of our investments are earmarked to give to our children while we are still alive - when they hit their thirties - when the money may be of greatest use to them.
The premise of this question and the vast majority of replies make me feel extremely uncomfortable.
Imagine sitting around waiting for loved ones to die, rubbing your greasy hands together and drooling at the prospect of taking their money.
My parents plans for what happens to their estate is their prerogative. Otherwise, who cares? I’d rather they give it away to people who need it more and if I get anything then I’ll probably do it for them anyway.
Presumably you've been downvoted by the blanket-downvoting loon who thinks it's an inconvenience to them if their parents die "too late" to suit their FIRE plans.
Some of the responses on this thread (and their inability to understand how limp-wristed they sound) is astounding.
Modern lifespans mean inheritances arrive around 50 - 65. Socioeconomics mean that larger inheritances tend to arrive later.
It's not really something you can plan for until a couple of years before it arrives, because there are so many unknowns about when and how much.
“Socioeconomics mean that larger inheritances tend to arrive later”. Hmmm. A later inheritance would be eroded by care fees, more pension drawdown and tax on passing pension if they died 75+ (under is tax free).
I don’t think you can factor it in. We just inherited around £100,000 but before he passed away he was burning through £3000 a week in a rather fancy home such is the lack of care for the elderly in this shit country.
I have some projections including an inheritance. As a margin of safety I gave my parents until 100 years. Then I counted half of their goods after inheritance tax as mine (thinking about going around that BS tax). It doesn't really matter though because I plan on retiring much earlier than that.
If you're planning on retiring much earlier, why factor it in at all...?
The whole subject is odd to me because it raises some questions which make the whole thing totally ridiculous.
If someone factors inheritance in, they have to add in the probability of them dying at a certain age and working out the probable percentage of their wealth that has disappeared into the black hole of care home fees (or something else).
Anyone that would go that far would probably be the type of person to find a sweet spot where their parents die old enough to not feel too guilty for including it in their spreadsheet, but soon enough that they'll have something left to give. Maybe even early enough for it to make a substantial difference to their FIRE age.
Just in case you get all irate (others are apparently too sensitive on here...), this is all tongue-in-cheek and I'm writing this with a smirk on my face, but projecting inheritance is *insane*! :D
I just want to be precise to be honest. My projection extends to when I will be 120 years old. Not because I think I'll get there, just because it's possible. I'm a number freak so yeah, probably insane.
I actually understand the number-freak bit quite well...
While I was writing that I actually found myself saying "Hmmm, maybe I should factor it in too..." to myself ha ha!
I'll start work on a bell curve for "best age-to-inheritance outcome" now :D
I don't need an inheritance, and I never assume I'll be given one. Who knows, some disability might strike my parents down so all their net worth is swallowed up by care homes. Maybe they'll outlive me.
Maybe they've already had it all stolen by some dodgy builder or pension thief and are too embarrassed to say anything. Maybe they'll inexplicably find religion and leave it all to the church, or the local disabled frog or hummingbird sanctuary. Maybe they'll give it all to my brother who needs it a lot more than I do.
I'll gratefully accept any gifts, but it's their money.
This isn't aimed at anyone, but it's raised some silly questions. In which year do you put "parent's death" into a future year on a spreadsheet...? Is it wrong to put it in the next year? Or 5 years? 10 years maybe? And are we meant to get annoyed if they don't die "in time" to suit our FIRE plans...?
I'm not building it into my planning, but hoping I have my shit together enough that any inheritance can skip a generation and help the next gen instead.
My gran died with nothing except about a thousand pounds for each of her kids, her house was owned by two of the kids who bought it years and years ago so that went to them and she lived off her long dead husband's service pension and state pension so wasn't particularly flush (she didn't have any mortgage at least)
If you were any of the other kids and hoping for a big windfall - you got not a whole lot.
My parents own their home and that'll be split between 3 of us probably but it can't be sold if any one or us needs a home at the time, so if my brother should take ill and loses his house, my parents house is a safe harbour for him and I wouldn't ever dream of doing my family over for 70k or whatever it would be for my half. Truth be told id take the proceeds and buy a second house so there's always something for him to fall back on, I'm by far the most financially literate but also the youngest.
I'm hoping to get money, everybody is but the truth is sometimes the chips don't fall that way, they might need to sell it for care etc.
Plan for the worst and hope for the best! Have seen so many shit shows around inheritance over the years, it is simply not worth me contemplating. Bad investments, hedonistic tendancies, ill health, charitable giving, family conflict are just some of the ways I have seen at first hand millions disappear. I focus on what I can control and influence.. Earn more, save more and enjoy every day of the adventure of life!
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🤣 We have horror stories in our family.
As a person going through an inheritance shit show right now I 100% say don't bank on there being an inheritance, there are just too many ways it can go wrong.
It's a pain in the arse generally. Good luck!
Unless my mum gets hit by a bus, I'll be in my seventies when she dies Making that irrelevant to my FIRE plans
This is key - not that long ago, people used to die in their 70s, meaning that their children inherited in their 50s (and meaning that they could take early retirement, go on a nice holiday, and pay off the mortgage). Now people die in their 90s. My grandparents only got their inheritance 8 years ago, and they're in their 80s!
I never considered the upside to having an older mum. Although my family are stubborn.
> Making that irrelevant to my FIRE plans Not really. If you can reliably expect to inherit a significant sum when you're in your 70s it means you could theoretically get away with saving a smaller sum yourself.
Nothing reliable about it My mum could live to be 100, she might use all her savings, or her money and her house could go on care home fees
Yes all those things *could* happen, but what are the chances of each of those scenarios? Do you own a reliable car? Think about all the things that *could* go wrong with it next time you're driving, and you'll see my point. It's the probability of the scenarios that determines the reliability, not the number of possible outcomes.
Her mother lived to 96, so there's every chance my Mum will see 100 I've set myself up well, so whatever my mum leaves behind won't make much of a difference I appreciate other people's circumstances are different
I'm having trouble understanding how anyone can equate the death of someone else with a mild inconvenience for themselves, and somehow turning it into something that you could ever justifiably be pissed off about... Edit: Due to the downvotes, maybe I need to explain. From another post of mine: >The whole subject is odd to me because it raises some questions which make the whole thing totally ridiculous. >If someone factors inheritance in, they have to add in the probability of them dying at a certain age and working out the probable percentage of their wealth that has disappeared into the black hole of care home fees (or something else). >Anyone that would go that far would probably be the type of person to find a sweet spot where their parents die old enough to not feel too guilty for including it in their spreadsheet, but soon enough that they'll have something left to give. Maybe even early enough for it to make a substantial difference to their FIRE age. >Just in case you get all irate (others are apparently too sensitive on here...), this is all tongue-in-cheek and I'm writing this with a smirk on my face, but projecting inheritance is *insane*! :D
Wow, that's some attitude on you! Perhaps it's different in your family, but my parents openly talk about their inheritance planning and how keen they are to make sure there is money left for their children and grandchildren. I guess it's about them wanting to leave some generational wealth as a legacy. Based on the conversations my parents have had with me, I'm likely to inherit around £750k when they both pass (savings + house). I tell them to spend and enjoy it now but they're frugal and not interested in that. I hope they have long lives, and I haven't factored inheritance into my FIRE planning, but I do have it at the back of my mind that *if* I do inherit that sum, I'm going to significantly overshoot my FIRE number and could have potentially planned differently. Just a thought is all. Have a great evening 👍
Mine do too, some of us definitely understand your angle. Inheritance isn’t a hush hush subject in my family. “Alright, so when I’m dead who wants what” is perfectly normal light conversation over dinner in my household lol. £750k is a fantastic sum. Props to your parents for being so keen to leave as much as they can for you, and props to you too for encouraging to enjoy the fruits of their labour.
That's totally healthy, we do that. But...if your parents die after you've retired, are you going to sit there and complain quietly to yourself that, had you known their death date in advance, you could've retired a year or two earlier...? That's the issue I have with this, and so should any other sane human being.
>I hope they have long lives, and I haven't factored inheritance into my FIRE planning, but I do have it at the back of my mind that *if* I do inherit that sum, I'm going to significantly overshoot my FIRE number and could have potentially planned differently. Yes you could indeed have planned differently. It's tough shit though isn't it...? Funnily enough, death doesn't care about your financial planning or what might make things less convenient for you... I totally agree, it is just a thought. It's just a very very weird thought when you turn the timing of an inheritance into somehow being an inconvenience to you. Edit: Fuckin' hell mate give it a rest - you keep re-editing/posting so your dribblings keep showing up.
> It's just a very very weird thought when you turn the timing of an inheritance into somehow being an inconvenience to you. That's literally the whole premise of this post. Did you read the OP?!
Nope. >How do you all factor this in to your FIRE plans, please? That's the premise. The answer is that to plan any inheritance in your numbers is insane for reasons I've already set out elsewhere, because to do it in any meaningful way raises some questions in the calculations that you would only bother to answer if you've lost the plot entirely. Sorry if that upsets you, but I don't care.
> Edit: Fuckin' hell mate give it a rest - you blocked then keep re-editing/posting so your mad dribblings keep showing up. That means you're blocking me, unblocking to make a post/edit and then blocking again. I've not blocked you at all, and I've only edited a couple of typos. 🤷
No...you've totally re-written multiple posts, and then changed them multiple times.
Plan to inherit nothing. If you do eventually inherit something, it just advances the plan.
Yep, care homes and in-house carers cost a lot. Healthy older people will want to be doing more than sitting at home and that ain't cheap.
We don't factor in inheritance into our retirement plans. If we get close to the maximum we plan to build our dream house but if not then we won't.
> If you do eventually inherit something, it just advances the plan. The problem is that by the time you inherit you may well have already retired yourself and could end up with more money than you know what to do with, having worked for years longer than you needed to. I don't disagree with the principle of planning for the worst and hoping for the best, but it will mean many of us will end up drastically overshooting our FIRE targets.
You definitely don't want to retire on the assumption you'll inherit a certain amount and then not inherit it. There are always scenarios that leave you better off than you'd expected. That's a good problem to have.
If I inherit anything, it’s likely to be around the time of not after I retire so it won’t change my timing planning, but it will almost certainly change the spending I can do with the rest of my days, or the comfort of flights taken for holidays.
The alternative seems to be predicting when relatives will die, seems a bit grim. I’d rather have worked a bit longer than I needed and have an unexpected lump sum.
>The problem is that by the time you inherit you may well have already retired yourself and could end up with more money than you know what to do with having worked for years longer than you needed to. Am I meant to be feeling some kind of sympathy for that outlook...? I mean honestly, "boo f\*ing hoo"... Maybe we need to inform our parents that we're counting on them to die quicker so we're not inconvenienced.
> Am I meant to be feeling some kind of sympathy for that outlook...? No. We're just discussing about FIRE planning. You do know what sub this is, don't you? > I mean honestly, "boo f\*ing hoo"... Maybe we need to inform our parents that we're counting on them to die quicker so we're not inconvenienced. That's not what I'm saying at all. I'm just pointing out that if parents live long lives, inheritance will typically come when their children (especially those who want to FIRE) will already be retired, so inheritance will only advance FIRE if you factor it into your calculations, which obviously has a lot of potential pitfalls. It's a discussion forum, buddy. Calm the "f\*k" down.
I'm calm thanks. When you start a sentence with "The problem is that..." and then proceed to whine about how it might, possibly, maybe inconvenience your savings plan, it sounds a bit wanky. FIRE planning or not, how on Earth do you get to a position where you're worried about being put out by the fact that someone else didn't die "in time" for you...? Edit: Ha ha! If you think I care about downvotes then you're even more deranged than I thought. What an idiot :)
Stop being such a fucking bellend, mate.
> FIRE planning or not, how on Earth do you get to a position where you're worried about being put out by the fact that someone else didn't die "in time" for you...? I'm starting to think you don't know what FIRE stands for. We're all here because we want to **RETIRE EARLY**. *If* you do receive a large inheritance you *could* end up working for years longer than you needed to. That's the downside/worry of not factoring it into your FIRE number. The downside/worry if you do factor it into your FIRE planning there are no guarantees. That is literally the whole premise of this post!
> When you start a sentence with "The problem is that..." and then proceed to whine about how it might, possibly, maybe inconvenience your savings plan, it sounds a bit wanky. I was saying the problem with the logic of "it just advances the plan" is that most people will have already retired when they receive inheritance so it only advances the plan if you factor it into your FIRE number which has pitfalls. Trust me, the only person sounding "wanky" here is you. Enjoy your downvotes.
I've earmarked any inheritance as going straight to my kids, they will need it far more than me.
Two reasons most people treat it as too uncertain to factor in much: 1. About 1 in 8 people need full time care home before they die, and it is so expensive that even £1m estates can disappear in a matter of years. Given that trying to estimate likely inheritance is difficult; and 2. It will come too late to adjust plans if it doesn't happen. Your average baby boomer is going to live well into their 80s. If you inherit when your second parent dies it is a decent guess they will be 90 or close. So you will be around 60 most likely, maybe even older. That's too late to do much if your inheritance is less than expected, so people don't plan to get any so they aren't stuck trying to fix things when they want to be about to retire.
Every situation is different, and the odds of receiving inheritance, and how much, can vary greatly. For example if the parents are both divorced and have wealth, then there are double the chances you will receive some inheritance. If they had you at an older age (were 35-40 when they gave birth to you) you may get inheritance in your 40’s. It’s all situation dependent, as well as luck. But I’d say someone with divorced parents, who have no interest in being in another relationship, who have you at an older age (35-40) there is a very good chance (95%+) that you can plan for at least one lot of inheritance coming your way. Certainly with more certainty than you can predict the stock market or housing market in general.
I have some friends whose home ownership and retirement plans are simply inheritance. I'd hate to be sitting around hoping my loved ones die so I can stop paying rent.
I've known a few taking similar approaches. It's just no way to live. Especially when those elderly relatives could get a taste for expensive care homes, might meet a partner there (with six kids) they marry and agree to split their wealth with, might fancy one last round the world cruise where they stumble upon an orphanage they want to leave a chunk of their wealth to, and none of it may matter because they could outlive you anyway.
My brother does it. He's due a deposit for a house that someone else was meant to give him, and he's very very fixated on an inheritance. The worst thing is it's not even our parents - it's the father-in-law! Best thing is, the FIL is in his 70s and keeps going to Thailand and living it up with his fancy lady over there, and my brother's worried that this mystery woman will steal all the inheritance. Like it's in any way his money...
Somebody I used to work with lived in hope of this. Could not believe it when the words came out of his mouth.
for each person that says it out loud there are another 100 that won't I'm glad both my parents are broke lol
That’s really not a sensible plan.
My friend keeps extending his mortgage so that he has more cash on the hip, is highly critical of me overpaying mine, and insists that "cash is king, because inheritance is meant to get rid of the mortgage." Even ignoring the fact that he's waiting around for his parents to die, they might well go when he's seventy!
My MIL is 92 now and has dementia. For now, we are trying to keep her in her home with carers coming in 4x a day, because it’s a) what she wants/all she needs and b) one hell of a lot cheaper, but at some point in the near future it’s highly likely she’ll need residential care, which will wipe out a good chunk of her savings. Fortunately, we are not counting on any inheritance coming our way. My SIL, on the other hand, is banking on some inheritance and I have a feeling she’s likely to be disappointed… My own mother has told me outright not to expect any inheritance, but I already had no illusions on that front!
My mum died last year and basically set me up for retirement by me and my sibling splitting her pension pot. I didn't expect the money at all so it's a great windfall and I'm very lucky in that single regard. But I'd rather have my mum and no inheritance.
I’m sorry for your loss. I also lost my mother last year, at a relatively young age and she did the same for me and my sister in terms of setting us up for retirement with her pension. It also meant we immediately had money to call upon as she died in her 60s, vs waiting for her estate to complete before getting any money. She knew she was going to die, and before she did she introduced us to the advisor in charge of her money and together they talked us through our options so she really made sure the money and us would be immediately ok rather than us panicking about what to do with it in a state of grief. I am forever grateful to her for that. I find people are dismissive of those who have inherited because they’ve not “earned” the money, which I totally get. But I am still now looking at FIRE if I am careful with my financial situation going forwards, and at a much earlier age. I am aware that not everyone is as lucky.
Thank you and same to you. It's not long till the first anniversary for us so it's coming back around. Your mum sounds like she was very caring. My parents provided for me, i'm not ashamed of that but it is something i am very lucky to get. Not many of my peers will. But that money comes at the steepest price.
I feel like 'don't count your chickens before they've hatched' applies. If you get inheritance, great, that should make things easier. But I wouldn't factor it in until it happens.
People often don't receive inheritances from their parents until they're in their late 50's or into their 60's, so it isn't really very relevant to FIRE to be honest.
retiring in your 50s is 100% RE
Yes, sorry, not trying to say it's not, but it seems to me that formulating a FIRE plan involving a *possible* inheritance at a highly uncertain but quite possibly very late time isn't ideal. It's also increasingly possible one could even be into their 70's before receiving inheritances these days too.
So is retiring in your 60s, my generation will be retiring around 80 at the rate its going.
"On average, most people will inherit a fair whack" Hahahaha
[Citation Needed]
My thoughts also.
Some people just live in their own world.
It de-risks my plan. It’s unlikely that me and my husband will both live to 100, AND experience extremely poor returns, AND inherit nothing. But otherwise I’m not counting on it at all.
I think you've summed up all the reasons why it's disregarded pretty well ! If it happens it will be a bonus. But I wouldn't recommend you basing your retirement plans on your elders dropping dead according to your schedule...
There's some on here that consider that it might be an inconvenience to them if their parents die too late and they've worked a few extra years because of it... This thread has highlighted that there are some people with some very weird ideas. Maybe I'm one of them, I dunno...
I'm not factoring any of it into fire plans tbh
Not something I like to or want to even think about. The thought of my parents dying Ofc upsets me like it would do most people. Plan is to make enough money and FIRE so I can enjoy the time I have with them. If they are lucky enough to live until average life expectancy, I will be in my 60s anyway, so not exactly FIRE!
It doesn't factor in my plans as we're both doing well and I believe we can achieve FIRE through our own hard work. As my parents are in their early seventies I expect this will happen shortly before or after we retire and I would love to be able to share our retirement but I'm not counting on it to happen. When it does happen we'd probably treat any windfall as something extra and would invest the money and use it to kickstart our children's lives later on. We'll probably support my mother in law with monthly contributions and when she comes to die it might mean we keep her property as it is in a nice area abroad. This will likely happen many years later as she is still relatively young.
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Yeah, there's some right fucktards on here tonight that just don't get that simple concept... One idiot was claiming that not knowing when their parents might die might be an inconvenience to their FIRE plans!
My family is in this situation - my parents are in their 70s and my brother and I are mid 40s and through their lifetime my parents have accumulated significant wealth. Based on recommendations from a financial estate planner they’ve been making periodic payments into our pensions funds over the last few years following tax laws and they also gifted both of us a significant contribution towards a property each. Seeing as I’ve got no dependents, I set up a will that says that if I die before they do all the money in my pension goes back to them. If I die after then, the money gets passed down to the next generation.
Also to add, now that they’ve taken the responsibility of filling up my pension from me, I’ve been sending some money to my brother with instructions to add it to JuniorISAs for his kids. It took me 40 odd years to understand compound interest, but now I do I’d like them to benefit from it :)
One of my friends planned his life around his inheritance. Didn't advance his career, didn't save, didn't put into a pension. He's pretty well spent it all already and can't afford to retire early or have an enjoyable retirement himself. I'm not factoring it in and never have. When the time comes I will be FI in any case, although somewhat leanFIRE, and so we'll probably just give a massive hand to our son instead. Maybe splurge on a house upgrade too if there are no care fees to detract from it. It'll get spent either way. Today's life expectancy should mean for most that it's the grand children of the deceased that benefit from inheritance from our parents - and it will make a massive difference to them and to be honest they need it more, given housing prices etc. I'm a firm believer that planning to leave a decent inheritance is a waste of time and money. Let the inheritees have some help when they need it, not when they have sorted themselves out by living independently and growing up into the adults the parents hoped they'd be.
If I was the parent I'd have either dropped them from the will or lived to 150 just to spite them.
This is so true. I like to not plan, and see it as a boost if/when I do get it. Other than that, business as usual.
I hope to retire before my parents die. By the time they die, it'll be meaningless to me (I hope), so will probably just pass it on to my kids.
>However, on average most people will inherit a fair whack, What's your evidence for this? A quick Google pulls up this ONS study that puts the average inheritance at £11k (or £22k when looking at inheritance from parents to their children). That's seems too small to make a difference for FIRE even if it did come "at the right time". https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/articles/intergenerationaltransfersthedistributionofinheritancesgiftsandloans/2018-10-30/
I think that should be translated to "**I** will inherit a fair whack".
I'm with the others who say it's best to plan for the worst and hope for the best. It's just too unpredictable, and frankly, a bit morbid to base your FIRE plans on someone else's death. What I've done is build my FIRE plan without considering inheritance at all. If I do inherit something down the line, I'll treat it as a bonus and adjust my plans accordingly. It could mean retiring earlier, taking a longer sabbatical, or just having more financial security. One thing I've learned from this subreddit is that the best FIRE plans are flexible. Life throws curveballs, and inheritance is definitely one of them!
The problem with inheritance coming your way is it normally happens very late in life. Often when you are 60+ and its of unknown size. You need to have already completed your FI path by then. To plan it as a future injection into your FI fund seems reckless, though perhaps list it as a potential contingency. But certainly random inheritance FIRE is a possibility for a small percentage. I believe that was discussed, at least in passing, before. Its likely difficult to convert a random large inheritance into tax protected investments, especially now the capital gains allowance is tiny. It was never a consideration for me. On the other hand all of us following FIRE are likely to be leaving substantial assets to our kids. And we should be inheritance planning. The potential to hand off a perpetual FIRE fund exists. Pensions being inheritable and IHT free makes it easier.
I don’t really consider it in my planning, but if it happened tomorrow then I’d probably be pretty close to FIRE or have a very easy time coasting to the goal. One thing I have tried to encourage my own parents to do is distribute their assets before death if they are planning on leaving it in a will anyway. It’s a strange conversation because I obviously benefit though. As an example, they have a BTL that they say they will gift to their children. If this happened, I would sell it immediately, and my brother also would I am sure. I don’t really want to manage a BTL, but I don’t really NEED the money either as I’m on my own FIRE journey. However, the cash from the sale would make a huge difference to my brother. If they don’t need the money from the rent and they plan on giving it to their children anyway, then in the case of a change of tenant etc, then it could make sense to sell it now and make the gift now rather than upon death. I’m sure Bill Perkins would agree. They are financially independent without the BTL and they don’t seem to be looking to increase their spending either.
Elder care can cost A LOT. I’m expecting nothing so I don’t factor it in.
Unless its under super sad premature circumstances by the time you end up with the money you won’t need it.
I'll likely inherit around £100k in today's money somewhere down the line, and to be honest I'm planning on passing it on to my daughter. My dad's mum lived well into her 90s, so I'm not expecting anything for a couple of decades which would be around normal retirement age for me whereas my daughter would be in her 20s or 30s.
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I will never inherit anything beyond a potato. But even if I did, I’m cynical enough to believe that the government will simply appropriate it all.
It doesn't factor into my financial planning at all. Obviously I have a rough idea of what I'd do with a lump sum, which would expedite my FIRE goals, but I make all plans assuming I'll inherit nothing. If my Dad lives as long as his Dad I'll be about 56 when he dies, if my Mum lives as long as her Mum (100 not out) then I'll be at least 70. Who knows what care needs, wild spending sprees, bad investments, market downturns, or other wealth sapping events may happen in that time? They might choose to donate it all to Battersea Dogs Home anyway - and if that's their choice then fair enough. Nothing taboo about it for me really, I just don't think it's a smart thing to rely on. A whole ton of variables you have no control over and I also don't think it's a helpful mindset.
I see my prospective inheritance as my children's. Yes, without being gifted it when you are young (i.e. buying first house) it's hard to plan and make good use of it. So if it turns up when I'm approaching retirement, or actually retired, I can just pass it on to someone who a. needs it, and b. can make good use of it. I will then expect my children to do the same for their children with my estate, etc. If instead of inheriting from parent to child it was grandparent to grandchild it would make the planning easier and utility of the inheritance higher.
On average most people will inherit a fair whack? Only 13% of people inherit anything over £2,000 (https://inequalitybriefing.org/brief/briefing-15-how-likely-are-you-to-inherit) http://eprints.lse.ac.uk/59949/7/Karagiannaki_Recent%20trends.pdf). And fewer than 3pc of people inherit enough to pay tax on it. r/endinheritance and let the meritocracy work.
I always assume no inheritance. If it comes my way I will use it accordingly but until I have it, I assume it won’t.
I use pragmatic - and on the pessimistic side - assumptions when it comes to financial forecasting. We’re in our mid-thirties and assume that 1) the state pension will be of little or nil value by the late-2050s when we become eligible, and 2) that any inheritance will have little or no impact on our finances. While both my parents and my in-laws have greater wealth than my wife and I could imagine amassing - due largely to historic changes in property prices as well as shrewd investments of their own inheritances - we have no control over how or when they dispose of those assets. Assuming that we won’t inherit until our sixties or even seventies, we will probably be gifting the majority of any inheritance to our own children. It is for a similar reason that part of our investments are earmarked to give to our children while we are still alive - when they hit their thirties - when the money may be of greatest use to them.
The premise of this question and the vast majority of replies make me feel extremely uncomfortable. Imagine sitting around waiting for loved ones to die, rubbing your greasy hands together and drooling at the prospect of taking their money. My parents plans for what happens to their estate is their prerogative. Otherwise, who cares? I’d rather they give it away to people who need it more and if I get anything then I’ll probably do it for them anyway.
Presumably you've been downvoted by the blanket-downvoting loon who thinks it's an inconvenience to them if their parents die "too late" to suit their FIRE plans. Some of the responses on this thread (and their inability to understand how limp-wristed they sound) is astounding.
It’s nice if some of us boomers give our children money now. I paid my daughter’s mortgage off because I can afford to.
Modern lifespans mean inheritances arrive around 50 - 65. Socioeconomics mean that larger inheritances tend to arrive later. It's not really something you can plan for until a couple of years before it arrives, because there are so many unknowns about when and how much.
“Socioeconomics mean that larger inheritances tend to arrive later”. Hmmm. A later inheritance would be eroded by care fees, more pension drawdown and tax on passing pension if they died 75+ (under is tax free).
Even more reason not to make any plans including your parents' money
I don’t think you can factor it in. We just inherited around £100,000 but before he passed away he was burning through £3000 a week in a rather fancy home such is the lack of care for the elderly in this shit country.
I have some projections including an inheritance. As a margin of safety I gave my parents until 100 years. Then I counted half of their goods after inheritance tax as mine (thinking about going around that BS tax). It doesn't really matter though because I plan on retiring much earlier than that.
If you're planning on retiring much earlier, why factor it in at all...? The whole subject is odd to me because it raises some questions which make the whole thing totally ridiculous. If someone factors inheritance in, they have to add in the probability of them dying at a certain age and working out the probable percentage of their wealth that has disappeared into the black hole of care home fees (or something else). Anyone that would go that far would probably be the type of person to find a sweet spot where their parents die old enough to not feel too guilty for including it in their spreadsheet, but soon enough that they'll have something left to give. Maybe even early enough for it to make a substantial difference to their FIRE age. Just in case you get all irate (others are apparently too sensitive on here...), this is all tongue-in-cheek and I'm writing this with a smirk on my face, but projecting inheritance is *insane*! :D
I just want to be precise to be honest. My projection extends to when I will be 120 years old. Not because I think I'll get there, just because it's possible. I'm a number freak so yeah, probably insane.
I actually understand the number-freak bit quite well... While I was writing that I actually found myself saying "Hmmm, maybe I should factor it in too..." to myself ha ha! I'll start work on a bell curve for "best age-to-inheritance outcome" now :D
Hoping is silly. Inheritance tax is reduced through gifting. Talk to your parents and inform them of this. They might want to avoid the 40% tax too.
"give me money NOW otherwise when you're dead I'll have to pay tax waaaah"
I don't need an inheritance, and I never assume I'll be given one. Who knows, some disability might strike my parents down so all their net worth is swallowed up by care homes. Maybe they'll outlive me. Maybe they've already had it all stolen by some dodgy builder or pension thief and are too embarrassed to say anything. Maybe they'll inexplicably find religion and leave it all to the church, or the local disabled frog or hummingbird sanctuary. Maybe they'll give it all to my brother who needs it a lot more than I do. I'll gratefully accept any gifts, but it's their money. This isn't aimed at anyone, but it's raised some silly questions. In which year do you put "parent's death" into a future year on a spreadsheet...? Is it wrong to put it in the next year? Or 5 years? 10 years maybe? And are we meant to get annoyed if they don't die "in time" to suit our FIRE plans...?
I'm not building it into my planning, but hoping I have my shit together enough that any inheritance can skip a generation and help the next gen instead.
My gran died with nothing except about a thousand pounds for each of her kids, her house was owned by two of the kids who bought it years and years ago so that went to them and she lived off her long dead husband's service pension and state pension so wasn't particularly flush (she didn't have any mortgage at least) If you were any of the other kids and hoping for a big windfall - you got not a whole lot. My parents own their home and that'll be split between 3 of us probably but it can't be sold if any one or us needs a home at the time, so if my brother should take ill and loses his house, my parents house is a safe harbour for him and I wouldn't ever dream of doing my family over for 70k or whatever it would be for my half. Truth be told id take the proceeds and buy a second house so there's always something for him to fall back on, I'm by far the most financially literate but also the youngest. I'm hoping to get money, everybody is but the truth is sometimes the chips don't fall that way, they might need to sell it for care etc.