NPR: What do you think of this? re: retirement

peekaboo716

A friend of mine is getting married. She and her fiance are planning a lavish affair for their wedding. Both have been married before. They own a modest home that they cannot wait to move out of into something bigger. They are both employed and make really good money. They are both about 40, and want to start a family ASAP.

Her fiance made a comment to my DH when talking about things recently that he didn't need to worry about retirement because his fiancee is getting $1,000,000 once her parents pass away. I have met her parents and they are in their late 50's.

A couple of days later, my friend tells me that she asked her parents for money for the wedding since she was just going to get it later anyway. They told her no. She's livid that they wouldn't give it to her. My thought is that it's all tied in investments so how could she. She told me she was getting $500,000. (Um - not sure what's what here.)

So my question is this: If you are getting money in the form of inheritance (and no, I don't know if her inheritance is strickly cash or real estate, etc.), would you stop saving for your retirement?

My answer is no. You can't bank on other people not needing the money they have set aside for later. What if her parents get sick and need to tap into the savings? What if her parents outlive their current retirement savings making necessary taking some of the money from the inheritance? I just think you need to take care of yourself, and continue to save. And $1 million just isn't that much.

My friend has not put hardly any money into retirement since she knows she's getting this money later. Her future DH will stop once they are married. Bad idea IMO.

EliseB0323

That is really stupid retirement planning. Also, if you want a "lavish" wedding and have a good job, you can pay for it yourself. I honestly don't think DH and I have ever considered what kind of inheritance we might get. And his mom is in her 80s. I'd rather she spend all her money on herself, frankly.

A-baybride

Very bad idea.  First of all, $1 million probably won't last as long as they think it will, depending on inflation, what their expenses are in retirement and how long they live. I plan on having a lot more than that when we retire.  Second, even if the amount were much larger (enough to comfortably live off the interest and not touch the inheritance itself), things can change between now and when her parents die.  If her parents realize she and her husband are just waiting for them to die so they can retire, they might change that will - I wouldn't blame them!

brit072206

Just a lurker passing through but I couldn't help commenting. That is a very poor plan. Like PP said, $1 million will not get many people very far when it comes to retirement, after inflation, healthcare, etc. especially if you want to maintain a semi-regular standard of living.

 Secondly, there are no guarantees. The parents may need nursing home care for their last year (my grandma's nursing home was over $8k a month), may have doctor's bills, etc. You never know.

Katesmama

I think your friend, on this issue, is a spoiled brat that has no clue what real life is really like.  Kind of surprising given her age.  There is no part of her "plan" that makes sense or is responsible. 

tarebear9891

That seems really depressing that she actively talks about the money she will be getting when her parents pass away. I can't imagine being so matter of fact about that. I would much rather have my parents around and I can't imagine talking to other people about it.

And like pp said I would never not plan for retirement (when I could) because of inheritance I think I will receive. That is really naive.

Disneygeek77

She is just a fool. What if her parents live into their 90's?  What will she do in her early 70's late 60's ? 

You just never know what will happen in life. 

veloelle

No. That is wrong on so many levels. Good for her parents for not giving into her snotty, entitled attitude. My parents will sometimes say "we're spending your inheritance" to which I say, good!! My estate planning isn't predicated on my parents dying. My mom works for a CPA who does lots of estate planning and sees this entitement all the time. It's sad and makes me mad.

Rebekah1021

Yep - not a good idea. That money is theirs. They don't have to give it to her and they can give all away to charity and not give her a cent. They could have a falling out and they could change the will and she not get a cent.

DH's gma has changed her will so often that nobody counts on a nickel.

They are setting themselves up for a disaster. Not to mention, a million isn't going to go as far in the future. It only gets more expensive to live.

JOEBunny

Well, I am not sure how anyone could "know" they are getting money.  My Grandfather is 93 years old.  His burn rate is about $75,000 a year at this point.  He has to pay it all out of pocket.  His social security is nothing.  If my parents had counted on him, they would be screwed (and so would I because I would have to take care of them!)