If you know you’ll be inheriting a significant amount

[Anonymous]

Anonymous wrote:How are you factoring that in your planning?

Assume that even if your parents spent a ton of money for end of life care, you’d still be getting at least $1mil (but more likely closer to 2 or 3). Both parents currently mid-70s, one who is currently in poor health and the other who has been a smoker for 50+ years. You are currently around 40. You currently max retirement. Your parents have already fully funded a 529 for your one kid.

How would that affect how you are personally saving currently?

do not count on it

[Anonymous]

I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

[Anonymous]

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

A lot of people spend a lot of money on care when it’s unnecessary. Someone who isn’t mobile would be in assisted living or the like. I’m talking about more of a housekeeper to make some meals, take out the trash, help move items, run an errand, pick up meds etc. Maybe 20 hours a week.

People give all of these extreme estimates on care costs that aren’t typical. Very few people are spending 120-150k on help in their home unless they are very wealthy. Do you even know how little most people have saved? My mom is an extremely frugal person and would never go along with something like that. Most elderly people do not live for years needing assistance getting to the bathroom, 24-7 care. That’s more end of life care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

This is inaccurate and far fetched. Think what a great career this could be. You could work 12 hour shifts and earn $75-80k per year and not even need a college education. Do you know how many people would want a job like this? Think of all of the people working 10 hour shifts at McDonald’s and earning $30k.

[Anonymous]

Anonymous wrote:If you’re just talking about your parents’ personal wealth, like in brokerage accounts and such, you can’t count on or adjust for it at all. For one thing, your parents will hopefully live a very long time. For another you can’t account for long term care, new spouses, scams etc. A lot can happen.

If you’re talking about like >$15m with intergenerational trust accounts and such I think you can take more risks than you might otherwise. It’s a safety net.

My situation is the 15M sort. A descendants trust with assured income to me, and my children.

I only contribute to the match on 401k. I dont save for the kids college- it’s funded. I can take career risks. I don’t have a fear about starting a business. I have a very different portfolio than peers, which I manage with an advisor

[Anonymous]

I'm not considering it at all. (It's not hugely significant accounting to DCUM, but it's a nice amount). Life happens. What if the house ends up not worth much? I'm happy for them to get the best end of life care and living arrangement possible, and that could cost a fortune. Things happen. I'll appreciate what we get, but we want to make sure we are 100% ok on our own without it.

[Anonymous]

My ILs were counting on some significant money that just never happened. Grandpa was worth far less than they thought and distributed differently than they expected. They had minimal savings of their own.

[Anonymous]

Anonymous wrote:

Anonymous wrote:15:57 again. Also, what is a “fully funded” 529? In-state flagship is 30K a year. SLACs are 77K a year. Some unis are 85-90K a year. For 2023. Who knows what it will be when your kids go to college!

$250K in the account with about 10 more years of growth to go. It’s definitely fully funded.

Ha - I used to think this. Let’s look at the stats.

Just picking an example, Duke: https://financialaid.duke.edu/how-aid-calculated/cost-attendance/

$84,517 excluding transportation, spending money, dorm supplies, clothing, gas, phone, insurance (health, car and dorm)

X 4 years = 338,068

Grad school, increased rates, more expensive school, etc.

I used to think like you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

This is inaccurate and far fetched. Think what a great career this could be. You could work 12 hour shifts and earn $75-80k per year and not even need a college education. Do you know how many people would want a job like this? Think of all of the people working 10 hour shifts at McDonald’s and earning $30k.

Friend, you’ve never done this. Sorry. You don’t know how much it costs or how hard it is to find. We’re currently doing this for considerably more. Yes, some of our aides make that much. It’s well deserved. The overtime is considerable and we don’t provide health insurance. Not to mention you need sick coverage and to be basically always hiring in order to replace people.

[Anonymous]

We expect to inherit $4-5M based on many conversations. We are planning for a satisfactory/acceptable retirement if we don’t inherit a dime. But assuming all goes as expected, we will have a better retirement and also leave a comparable amount to our children.

[Anonymous]

52 weeks x 40 hours a week x $25/hour (to an agency which you want because they send replacements and do all the hiring) is $52k a year. If you need 24 hour care, multiply that by 3. And my figures are several years old so probably higher now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

This is inaccurate and far fetched. Think what a great career this could be. You could work 12 hour shifts and earn $75-80k per year and not even need a college education. Do you know how many people would want a job like this? Think of all of the people working 10 hour shifts at McDonald’s and earning $30k.

It’s not inaccurate. I pay my parents elder care bills. It’s market.

And just keep telling yourself that people on this situation die soon. My parents have been like this for six years.

And yes many people won’t pay this because they don’t have it. But op’s parents do have it. And if parents have the money, it should be spent on giving them good elder care. So it could be spent down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

This is inaccurate and far fetched. Think what a great career this could be. You could work 12 hour shifts and earn $75-80k per year and not even need a college education. Do you know how many people would want a job like this? Think of all of the people working 10 hour shifts at McDonald’s and earning $30k.

Friend, you’ve never done this. Sorry. You don’t know how much it costs or how hard it is to find. We’re currently doing this for considerably more. Yes, some of our aides make that much. It’s well deserved. The overtime is considerable and we don’t provide health insurance. Not to mention you need sick coverage and to be basically always hiring in order to replace people.

Actually I have. For my father.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it depends on how your parents currently spend.

My mom has around $2 million and doesn’t spend the principle. She takes the minimum distribution and then reinvests it in a taxable account. She lives off around $75k a year without spending down principle.

She also has a $700k paid off house. I assume this will go to end of life care. The average stay in a nursing / end of life care facility is 2 years. We plan to hire help for her before that stage. I’d guess that is $50k a year. She lives in a house with a full bed and bath on the main floor.

I’d be shocked if I don’t inherit a million and plan to pay off any remaining mortgage and save the rest.

What sort of "help" do you plan to hire? 24-7 care one on one for one person is about 120-150k per year at home. That's if she is somewhat mobile. If she has to be lifted to get to bathroom or shower or into wheelchairs, the agency may make you hire two people for at least that time

This is inaccurate and far fetched. Think what a great career this could be. You could work 12 hour shifts and earn $75-80k per year and not even need a college education. Do you know how many people would want a job like this? Think of all of the people working 10 hour shifts at McDonald’s and earning $30k.

It’s not inaccurate. I pay my parents elder care bills. It’s market.

And just keep telling yourself that people on this situation die soon. My parents have been like this for six years.

And yes many people won’t pay this because they don’t have it. But op’s parents do have it. And if parents have the money, it should be spent on giving them good elder care. So it could be spent down.

Highly unusual to require 24 hour care for 6 years.