Couple expecting $1-million inheritance want to know if they can retire early
How to factor an inheritance into your retirement planning is a looming question for a growing number of people, given that an estimated US$84.4 trillion in savings, stocks and property will pass from baby boomers to their heirs and favoured charities by 2025 in the greatest transfer of generational wealth in history.
One married couple, Jonas* and Kathleen, in British Columbia are the sole beneficiaries to the estates of their parents and an aunt, and expect to inherit upwards of $1 million over the next 15 years. They are frustrated that inheritance planning isn’t typically part of the retirement planning process and that wealth calculators only make the process more difficult. Another issue they have is that talking about money and death remains taboo.
“It feels wrong, somehow immoral, to be talking about receiving a future inheritance,” Jonas said. “But these are important conversations that can remove some of the uncertainty about the future.”
Jonas, 55, and Kathleen, 49, would like to retire in the next five years. He would like to start working less in the next year or two, and they would like to spend at least five months a year living outside Canada when they do retire. If necessary, he can take on IT consulting projects in retirement, which could easily bring in about $50,000 a year.
Jonas’ current annual income is $110,000 before tax and Kathleen earns $20,000. Their investments generate about $7,200 in dividend income each year, which is automatically reinvested.
It feels wrong, somehow immoral, to be talking about receiving a future inheritance
The couple do not have children or beneficiaries, are debt free, own a home valued at $1.4 million and have a bit more than $1 million in savings. To this point, the
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