If you know you’ll be inheriting a significant amount

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

Most people don’t have the money to spend $300k per year on elder care. You may as well go around saying elder care is a mandatory 5 million a year. The average person come up with other solutions. It’s why so much of what you expect to inherit depends on spending levels. Are your parents the type who spend $300k a year on something? Did they send kids to private schools, drive luxury cars, expensive travel etc? If so, expect nothing. Are your parents the type who save, save save and refuse to spend an inordinate amount on something just because other people do?

My in-laws have a higher net worth but are big spenders. I expect to inherit $0. They will find a way to spend $300k a year on elder care and swear it’s necessary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

It’s shockingly expensive. I spend about $300k per year for 24x7 care for my mom. It started as daytime only. I believe that it’s her money that she and my dad saved and should be sent on keeping her comfortable and with dignity. There is something ironic about it given how frugally my parents lived their lives. There should be money left over but I certainty am not banking on it.

Because the money is now under your control and you’re a big spender so you’re spending $300k a year on home health aides. That is crazy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Huh? At an average 4% rate of return, pp will have $370,000 in ten years. They’ll be fine.

In 10 years, it won’t cost $340,000; it will be more. And of course there’s grad school. It’s a massive amount, but it may or may not be enough.

Just stop. The average parent isn’t spending that kind of money on college and especially not grad school. Most people don’t even attend grad school. Big spends like you do NOT get it.

[Anonymous]

Anonymous wrote:

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?

OP, $1M doesn't go very far.

This. I thought it would be a lot and it really is not anymore.

Person who thought they would be inheriting $5M and instead got $1M for various reasons.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

This. Assisted living alone is like $9K/month.

Memory care or nicer places are easily $14/$15K/month.

[Anonymous]

With the RMDs changed to 10 yrs vs lifetime, I'm anticipating significant tax bills in those years and beyond as my spouse will start drawing a pension probably around the same time. As such, I'm converting all of my IRAs to ROTH now. This should also give me decades of tax free growth and hopefully will never have to touch it- pass onto my kids tax free. Even if I end up with no inheritance, I think it is a smart move to do it now since my spouse has that pension, and also at the trump tax cuts rates. We are also doing all of our current retirement contributions to ROTH accounts.

[Anonymous]

I think there is a big difference between knowing you will inherit a significant amount and being in your 40s with parents in your 70s who have $5-10M. To me, a significant amount is closer to knowing you'll inherit $15+M because it's pretty difficult to spend that kind of money down completely if you are over 70 in relatively poor health. If I knew my parents were worth $100M with 3 kids, I probably would make some changes, especially with regards to my savings rate (currently 28%). On the other hand, teaching my kids that savings and living within your means is extremely important is a top priority. In OP's case, expecting to inherit $2-3M which is what I'm guessing from the post probably would not change my behavior.

All that said, the scariest stories are those from parents who remarry after the death of one spouse and then all the plans can go to hell in a second. There are no guarantees in life and you should take care of yourself. Remember most people inherit after their best working years so why would you wait for money?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

This. Assisted living alone is like $9K/month.

Memory care or nicer places are easily $14/$15K/month.

If you’re a big spender. There are plenty of memory care facilities that are perfectly fine and $6k a month in the DMV. Seriously. You just have to do your homework and not go through a major corporation. If you think about it, how many people can really afford $15k a month for memory care? Not many. It’s a luxury. Sure go to the Sibley memory care facility and it’s close to $18k a month. Again this is a luxury product and it’s not common to spend that kind of money. Nor is it necessary or any better of a product.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

It is higher now. We’re at $30-35, not through an agency. This is for CNAs. And realistically you can’t schedule people for exactly 24/7, the schedules just don’t work out perfectly. If you can’t have gaps, you get overlaps.

My number was just for a basic home health aide and we did not do 24 hours because my dad was home and my mom (the patient) slept through the night usually.

So what you’re saying is you haven’t had to do 24/7 care and you had an additional full time supervisor/caregiver who was unpaid.

Not sure why you are attacking me. I was agreeing with you that its very expensive and had my mom been divorced or a widow she would have required the 24/7 care. I was supporting what you were saying.

[Anonymous]

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

It’s a good reality check. My parents’ care and assisted living costs $20,000 per month

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

This. Assisted living alone is like $9K/month.

Memory care or nicer places are easily $14/$15K/month.

If you’re a big spender. There are plenty of memory care facilities that are perfectly fine and $6k a month in the DMV. Seriously. You just have to do your homework and not go through a major corporation. If you think about it, how many people can really afford $15k a month for memory care? Not many. It’s a luxury. Sure go to the Sibley memory care facility and it’s close to $18k a month. Again this is a luxury product and it’s not common to spend that kind of money. Nor is it necessary or any better of a product.

My inlaws LTC insurance pays about $350/day (I'm not sure the exact amount because it gets a COLA every year) and has no cap on benefits. They spent an obsene amount of money two decades ago to buy the top of the line insurance with COLAs and no caps. They are also extremely frugal and barely spend more than their social security despite having almost $20M. So we feel more confident than most what we will inherit (shared among my husband's siblings, who are all financially comfortable in their own right.) I said earlier that we are not counting on it in the sense that we will have a perfect fine retirement on our own if it vanishes, but it will dramatically improve our retirement and our kids' inheritance assuming its as expected.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

Most people don’t have the money to spend $300k per year on elder care. You may as well go around saying elder care is a mandatory 5 million a year. The average person come up with other solutions. It’s why so much of what you expect to inherit depends on spending levels. Are your parents the type who spend $300k a year on something? Did they send kids to private schools, drive luxury cars, expensive travel etc? If so, expect nothing. Are your parents the type who save, save save and refuse to spend an inordinate amount on something just because other people do?

My in-laws have a higher net worth but are big spenders. I expect to inherit $0. They will find a way to spend $300k a year on elder care and swear it’s necessary.

No, my parents are not big spenders. At all. hHeir house is paid off and if they were able and self sufficient they could easily have lived off 50k per year and been comfortable.

We, the children and POAs, are the ones choosing to spend their money on good elder care rather than saving it for our own inheritance. Since the money is there, we are spending it on THEM. Not saving it for ourselves. I guess some people whose parents have millions would instead let their parents sit in wet diapers and not be turned or changed enough so they inherit more. Our parents raised us better than that.

There are two of them. It's easy to spend 150k per person on at home 24-7 elder care. Through an agency you tend to pay 25 to 35 dollars per hour. Do the math. During the day we need two people because my parents are so disabled. We are all mostly busy with careers - which were made possible by the fact our parents sent us through college and grad school. So yeah, we are not going to stingy with their care and leave them alone in their house to sit in wet diapers or fall.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

It’s a good reality check. My parents’ care and assisted living costs $20,000 per month

Per person or total for both of them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your parents really had all that much, they would have taken advantage of this era of trumps estate tax exemption to gift to you. Since they havent, to me that means they have something in the five to ten million range. Hate to break it to you, but they could go through most or all of that. My parents' elder care costs 300k per year. Your parents could live another ten to twnety years.

Dont count on it until it is in your bank account.

How can one possibly spend $300K per year on eldercare? And even if it somehow were possible, it would likely entail a level of luxury and self-indulgence that most parents would not engage in in lieu of giving money to their kids and grandkids.

You don’t know what you’re talking about. Do the damn math. I could show you receipts from the elder care company.

It’s shockingly expensive. I spend about $300k per year for 24x7 care for my mom. It started as daytime only. I believe that it’s her money that she and my dad saved and should be sent on keeping her comfortable and with dignity. There is something ironic about it given how frugally my parents lived their lives. There should be money left over but I certainty am not banking on it.

Because the money is now under your control and you’re a big spender so you’re spending $300k a year on home health aides. That is crazy.

I am actually quite careful with how I spend money. Have you read the articles about how the elderly with dementia are often treated? It’s not pretty. My mother is 101. If she were 80, I would probably not be able to do this for her. But I don’t sit around waiting for her to die soon so I can have a more comfortable retirement.

[Anonymous]

I think some posters just sound envious that some people will inherit a substantial amount, even after accounting for long lives and pricey elder care. Some people just have that much money and/or very good insurance. All of life is a lottery of sorts.