Wednesday, May 30, 2007

Save money for retirement - avoid these pitfalls! Part III

As previously stated, due to an uncertain future of tax rates, health insurance costs, college costs for kids, changing government regulations, and increased life expectancies, I believe it is near impossible to predict how much we'll actually need to save for retirement. Therefore, the amount you need is A WHOLE LOT! That's all you need to know - you need A LOT. And if you need a large pile of money for retirement, you need to start saving now. The sooner you make the pile of money "sorta big," the bigger it will be upon retirement.

Here is the third pitfall that I believe you need to avoid on your road to retirement:

3. Counting on an inheritance

There is a danger in changing your current saving and investing behaviors because you think you may inherit some money. This is terribly dangerous - there are so many things that can happen that could reduce your prospective inheritance to zero. Your parents could get sick and be racked with medical bills, or even long-term care bills. (My grandpa paid $5,000/month to be in a nice long-term care facility. Ouch!). They could live to age 100 - I'd be 75 by that point! I'd better have my retirement secured all by myself by then! They may end up deciding, through dementia or not, that it's their money and they're going to spend it how they see fit. They could get scammed out of the money. They might decide to give some or all of their money to charity. And due to any of these above reasons, they could end up running out of money, which could potentially have you supporting them during their final years.

Wow, lots of ways to have that inheritance slip through your fingers, huh?

Here's my situation. My parents are in their early 60's. My dad is retired, while my mom works 4 days a week. They have about $1.5 million. My wife's dad died penniless (very long story, he had millions, bad things happened). Her mom has a few hundred thousand maybe, maybe half a million, and owns two houses outright. Beyond that, it's hard to pinpoint how much she has. My wife's aunt and uncle, neither of which had children, own two farms totalling 200 acres, and also own 5-10 rental properties, some outright and some with mortgages. They live very frugally and have done very well for themselves. Their money, along with my mother-in-law's money, would be passed down to my wife and her two brothers. My mother-in-law has a will, while I don't think the aunt and uncle do. The ownership structure of these farms and rental properties is unclear to me - they do not keep airtight books (nothing illegal, they just sort of fly by the seat of their pants).

We're talking about a few million bucks in play here. I hope I never inherit it, which means that everyone lives to a very ripe old age. But if some of them should die before me, I cannot tell a lie - it would be nice to inherit some of that money. My $210,000 net worth could use a shot in the arm, right? I have to admit that I think about it sometimes.

But it is nothing I can count on, and I know with my current plan, I can get to retirement without inheriting any money. Put together a plan that can do the same thing for you.

29 comments:

Anonymous said...

Great point. My father is a mortition and he has learned that MOST people burn through all of their net worth in the last 5 years of their life. People who die late typically have health issues for a few years before dying. Maybe its long-term care, maybe its prescription drugs, maybe surgery.

My wife's grandmother is 70 and has been in fairly good health with retirement funds of around $500k-$600k. She just had 2 major sergeries and was in the hospital for 3 weeks. It cost them nearly $100k out of pocket. She is healthy now, but still has treatments and drugs that are quite costly. It is possible that either she or her husband may live 20 more years. With that, it is unlikely that they will pass on anything.

Anonymous said...

And they could just leave it all to someone else.

My parents are likely to split their estates between us children, but there are several of us (more than average, not enough for a football team). That in itself probably won't give us a whole lot each. Add to that the possibility that they might leave it to a new significant other and you can see that I'll also be counting on a big fat zero.

Anonymous said...

Q, you said in your April Net Worth post that your net worth is $330K, but here you say its $220K? Are you giving away $100K sums to strangers off the street, and if so, can I get in on that?

Rizzo said...

Alex,

Yeah, I am making it too confusing. As of yesterday, I have $210,000 or so in equities and real estate (not including my principal residence). This is the magic number, the one I'm working to get to $1 million. The $300+K number includes my principal residence, cars, and other meager belongings.

I should probably just report on the $210k number

Anonymous said...

The other "cost" of counting on an inheritance is you have to kiss ass and try not to annoy the people you're hoping to get cash out of.

Too much work! You're basically a trophy wife at that point. I'd rather just work at work then work at trying to stay in someone's good graces. If they like you and leave you something, fine. If they don't and don't, fine too.

PF101 said...

This is something I teach in my classes. "Don't rely on anyone - Government, family, spouse, etc. - to fund your retirement. YOU are the only person who cares about your money so it's up to you to save it."

You hear all the time about people who thought they were coming into big bucks and then it didn't happen and now they have to scramble. Personally I don't expect to inherit - in fact, I expect to have to support my mom when she gets older. But even if she had money I'd want her to spend every penny instead of trying to save it for me.

Great series!

Anonymous said...

Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

Anonymous said...

Thanks into sharing. Like on all occasions, on the in money and right-minded on objective!

Anonymous said...

Hello. My wife and I bought our house about 6 months ago. It was a foreclosure and we were able to get a great deal on it. We also took advantage of the 8K tax credit so that definitely helped. We did an extensive remodeling job and now I want to refinance to cut the term to a 20 or 15 year loan. Does anyone know any good sites for mortgage information? Thanks!

Mike

Anonymous said...

Hey Everyone!

I have been looking to figure out a place to start with the acai free trial & was just wondering if anybody had any thoughts on whether or not the stuff works for weight loss? So far here is the 1 [url=http://acaiberries.zoomblog.com/]article[/url] I've been able to read online that seemed real for the goals I have. Thoughts?

Anonymous said...

The most comic and amusing images and pictures online.
Check unconscious
[url=http://www.funnyimgz.blogspot.com]funny[/url]

Anonymous said...

[b][url=http://www.uggsonsalewebsite.co.uk/]ugg boots sale[/url][/b] Most of these destinations get additional function and likewise there is certainly an even bigger component of chance necessary, yet you are able to report an excellent get the job done. Other physical spots to check are inclined to be discounters related to T. J. Similar with in that respect there significant quality reviews to recuperate using this unique? May be its tactics for locating a fantastic creator purse discounted without the existence of prospect of shopping for a replicate? There may well you must be quite a few aspiration to preserve. A number of net websites make them readily available because of the most effective organization linked with cut down dependable stylish purses. In a very health and fitness club uncover slideshow superb swap for people generally aren't capable to place it off to store upward in direction of probably the most up-to-date Balenciaga transfer and in many cases Mentor handbag.

[b][url=http://www.uggsbootsoutletmarket.com/]ugg boots outlet[/url][/b] Consequently, the weather constituting the fraud, the case will not be enough to the criminal situation, Tan Moumou at best be thought to be If it comes to tracing what exactly is who should bear responsibility for that challenge of compensation and destroyed info that belongs to civil liability,abercrombie and fitch, not owned with the Legal Investigation Brigade tube. the owner the dilemma: police investigation: a really serious individual aim of airport team 4-point demand Miss Gu believes that considering that the police have extensively investigated, it is actually obviously the obligation of your airport, so with four:00 towards the airport: in creating why the computer was brush to give an rationalization and an apology;, restore the data in the computer is damaged; compensation for damages; investment in the pc data will not be leaked. The future hence provoked leaks,chaussure foot, many of the obligation as well as the reduction borne by Nanning Airport.

[b][url=http://www.cheapuggbootswebsite.com/]www.cheapuggbootswebsite.com[/url][/b] The understanding has become distorted by incorrect translations, the apply of Ayur-Veda continues to be disrupted as well as in lots of circumstances prohibited. The critical part of consciousness, of meditation and various mental methods was lost (Sharma and Clark, 1998). Hence Ayur-Veda has considerably required to be restored to its completeness by knowledgeable men and women..

[b][url=http://www.uggsclearancemall.co.uk/]ugg uk[/url][/b] The easiest way to apprentice how you can buy a new car on the web is to make use of the blogs and analysis web-sites that do not allocution considerable regarding the appraisement or even the claimed overview. Whatever you must alpha with will be the web pages that can accord you a assessment with just the appearance plus the costs in the autos. That is recommended a non-bias study and so they may be genuine beneficial..

[b][url=http://www.bestlouisvuittonbags.co.uk/]louis vuitton bags[/url][/b] Louisette superior includes individualizing massive, modest, You Me ring, exquisite handgrip pendants, truthful bracelet once again studs. using the meat of flower petals fame 750 thousandths (18kt) other than trinkets of rubicund sapphires, rubies yet again diamonds, Louisette enhanced delivers fitter nobleness even further shapeliness. Refreshingly fragile, these rings squeeze the contours within the area maintain the flattering again immediate drawing near.

Anonymous said...

[url=http://www.patriotsfootballprostore.com/logan_mankins_jersey_super_bowl]Logan Mankins Jersey[/url] emurbursofs
[url=http://www.footballfalconsproshop.com/tony_gonzalez_jersey_super_bowl]Tony Gonzalez Jersey[/url] TynckeyncBype
[url=http://www.footballravensprostore.com/cary_williams_jersey_super_bowl]Cary Williams Jersey[/url] Proonseorek

QUALITY STOCKS UNDER 5 DOLLARS said...

guessing the direction of the stock market is something that many have tried buy failed to do.

Anonymous said...

[url=http://www.freewebs.com/order-amoxicillin/]amoxicillin mg\/kg dose
[/url]amoxicillin 875 mg tablet
amoxicillin 1000 mg twice day
amoxicillin 500 mg how often to take

Anonymous said...

[url=http://amoxicilline.webs.com/]Agram en ligne
[/url][url=http://acheter-amoxicilline.webs.com/]amoxicilline mal de gorge
[/url] amoxicilline formule
amoxicillin tablets uk
amoxicilline sinusite

Anonymous said...

What's up everyone, it's my first pay a visit at this web site, and
piece of writing is in fact fruitful in favor of
me, keep up posting these types of content.

My blog :: http://Helenparkhurst.nl
My webpage > make money blogging

Anonymous said...

Hello, every time i used to check blog posts here in the early
hours in the daylight, for the reason that i like to learn more and more.


Review my weblog ... http://Wiki.tonyyet.com/index.php?Title=User:VelmaBock

Anonymous said...

I blog often and I really thank you for your information.
This great article has truly peaked my interest.
I will bookmark your site and keep checking for new details about
once a week. I opted in for your RSS feed too.

Have a look at my homepage herbal supplement myths

Anonymous said...

[url=http://longchampsoldesk.blinkweb.com/]sac longchamp moins cher[/url] Backpack safety can be broken down into a few Excellent Mulberry Henry Natural Leather Laptop Briefcase Black for Men,With 100% Authentic Mulberry Handbags Sale You Can't Miss. easy steps, with many of these ideas and recommendations coming from Dr. Marvin Arnsdorff, cofounder of Backpack Safety America/International. First and foremost, your child needs to choose the proper size bag.
[url=http://longchamppaschers.wallinside.com/]longchamp soldes[/url] If you have molds, you can press the syrup-covered popcorn into them at this point. But for traditional popcorn balls, just grab a handful of popcorn and Beautiful Mulberry Women's Daria Drawstring Leather Tote Light Coffee Bag for sale is a preowned Mulberry Handbags but in great condition. Comes with outer box, pouch and cards. shape it into a ball. If you like, put on a pair of rubber gloves to keep your hands from becoming a sticky mess.
[url=http://kafafa.com/longchampmoinse/]sac longchamps[/url] How you will use your bag plays a large role in determining the size and shape, but a designer handbag can also accentuate your body type. Handbags don't form to your body like most accessories (necklace, bracelet, etc.), so the shape of the bag must be chosen with your own physical makeup in mind. A rule of thumb is to find a bag that is opposite your body structure.. Fabulous Mulberry Women's Standard Bayswater Leather Shoulder Black Bag online supply Save 50% and free shipping anywhere The French fashion house Chanel, is one of the only brands who have kept their reputation intact as many still view it as the fashion powerhouse. The Chanel 2.55 bag is a Chanel classic flap bag. The Chanel 2.55 bag is a well-known vintage handbag that has been reputable in the fashion world... The border of the saree is a light beige patch that has subtle brown floral patterns. This colour blends well with the patterns and the texture of the saree which ends up in the harmonized and well balanced looks. The huge silver floral pattern makes a style statement and makes you stand apart while one is draped with this saree.

Anonymous said...



Here is my web-site ... how to win the lottery

Anonymous said...

Has casually found today this forum and it was registered to participate in discussion of this question.
Certainly. I agree with told all above.
In my opinion, you are not right.
There is no sense.
It is a pity, that now I can not express - I hurry up on job. I will be released - I will necessarily express the opinion on this question.

[url=http://shenenmaoyipp.bravesites.com/][b]michael kors outlet online[/b][/url]
[url=http://shenenmaoyipo.livejournal.com/][b]michael kors outlet online[/b][/url]
[url=http://shenenmaoyik.livejournal.com/][b]michael kors outlet online[/b][/url]
[url=http://shenenmaoyizzz.viajeblog.com.br/][b]michael kors outlet online[/b][/url]
[url=http://www.shenenmaoyiw.350.com/][b]michael kors outlet online[/b][/url]

Anonymous said...

Greate article. Keep posting such kind of info on your site.
Im really impressed by it.
Hi there, You have done an incredible job. I will certainly digg it and in my view suggest to my friends.
I'm sure they will be benefited from this website.

My website :: Discount Checks

Anonymous said...

They are in store as of this poster and available for merchant marine choosing gifts for
men, nearly women conceive of gadgets. Many became bona fide fad phenomena, impelling us to race to our nearest Toys 'R to Study, are also Dandy as gifts for your girlfriend.

My page ... owl necklace
my webpage > owl-gifts-decor.com

Anonymous said...

Thank you for another wonderful post. Where else could
anyone get that type of info in such an ideal means of writing?
I've a presentation next week, and I'm on the look for such information.


Take a look at my homepage single cup coffee makers

Anonymous said...

Very good blog! Do you have any recommendations for
aspiring writers? I'm planning to start my own blog soon but I'm
a little lost on everything. Would you advise starting with a free platform like Wordpress or
go for a paid option? There are so many options out there that I'm completely overwhelmed .. Any ideas? Thank you!

my website; Modcloth coupon codes

Anonymous said...

I really like what you guys are usually up too.
This type of clever work and coverage! Keep up the excellent works guys I've incorporated you guys to our blogroll.

Feel free to surf to my page - http://www.besttextbasedgames.com/2013/01/urban-clothing-stores-online

Anonymous said...

Way cool! Some very valid points! I appreciate you penning this post and also
the rest of the website is very good.

Feel free to surf to my blog: innovacion.org.gt

Anonymous said...

It's truly a nice and helpful piece of info. I'm glaԁ that you
just shared this helрful information with uѕ.
Please keep us uρ to ԁate like this. Thanks for shаring.



Here is my weblog - hcg diet reviews
Also see my web page: hcg diet