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Old 03-10-2017, 07:11 PM
 
Location: Florida
4,432 posts, read 3,776,016 times
Reputation: 4250

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Quote:
Originally Posted by Submariner View Post
Spending it all now? Or maintain an estate to go to your heirs?

I see that many people focus on the idea of spending all their portfolio while they are living. The idea of drawing 2%/year or 4%/year, timed to reach zero when you die.

I remember reading in The Millionaire Nextdoor that it is common among wealthy families that they provide inheritances to their daughters, but not to their sons.

In my experience, my wife was orphaned at 12, and spent the remainder of her childhood 'couch-surfing' with cousins. He uncles took up a collection for her and one of them put it in a safe deposit box, for later when she got married. They often used that 'hope chest' fund as a carrot over her head. After we got married, she confronted the uncle for her 'hope chest' money, after 6 months of delay, he gave it to her, $150.

Both sets of my grandparents passed away when I was in my thirties. There was a lot of talk about their estates, etc. For three of them there was none. One of them had an estate left over after all medical costs, each grandchild received about $5,000. At the time, that was about one and a half of my regular paychecks. It was nice to get, but yet, it was a disappointment after all the talk about inheritances.

My parents passed away when I was in my early 50s. It seemed like a big estate, but after all expenses and dividing it out among five siblings, it worked out to $16,000 a piece.

I am not saying that I am not grateful for these inheritances. But $150 at 21, $5,000 at 35, $16,000 at 52. None of these 'set us up'. Basically all that any of these did was to provide an extra principal payment on our mortgages.

Outside of mortgages we have never carried debts, so they were never the sudden ability to get out of debt. In a way the whole inheriting thing has been a bit of a disappointment. [Sounds like I am really spoiled]

I have read many times stories about trust fund children and how it ruins someone to receive a large inheritance at an early age.

I can also see where receiving a big portfolio at 60 or 70 s a bit too late in life to really make much difference in your life.

I have been on pension for 15 years, we own our home, we have no debt. My career included a lot of travel, we have no desire to return to any of the famous tourist locations. We have became settled in our lifestyle.

We just got a fresh inheritance from an in-law. We got a couple toys, but really our discussion has been about investing it and trying to shift it to our sons [before they reach their 60s].

It seems like the focus of so many threads here, is all about spending every penny to reach the grave dead broke, with no inheritance for the next generation. Is that really where our society has gone?

Is it true that nobody is trying to help the next generation?
No
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Old 03-10-2017, 07:30 PM
 
Location: Forests of Maine
30,831 posts, read 49,713,958 times
Reputation: 19291
Quote:
Originally Posted by johngolf View Post
Submariner

You earned it. You are entitled to enjoy it.
I know, you are right.

As it stands now, if we took 50% of the annual profit for ourselves, we have no idea what to spend it on.
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Old 03-10-2017, 07:44 PM
 
7,115 posts, read 3,948,765 times
Reputation: 15155
[quote=shamrock4;47465569]DH and I hope our children will receive a substantial inheritance when we pass, as I did, but my parents both lived to 95 in quite a healthy condition so they are not holding their breaths if I have the same genes! We both have LTC care insurance that we hope will help with ever-rising costs. We would never purposely spend down as I am not too trusting of the economy in years to come and safety nets are being diminished.

We paid fully for college for the kids as my parents did for me (DH paid his own way) and our children are grateful when they see the loans their friends carry. My parents did gift me for the last 10 years of their lives, as they had solid pensions, most health costs paid by employer in retirement and Social Security. My dad spent over 30 years in retirement and was very astute in the stock market. These gifts were great as it gave us extra money to invest, pay off debt and give us a layer of security.

I am not the type to just blow money and my parents knew it, although we do enjoy traveling but "toys" mean little to us. The money I inherited will go mostly to my children if I die first as my husband has his own retirement funds. Quite frankly, much as I love DH, I have no intention of a second wife enjoying my inheritance from my parents - have seen this happen too often.

We do not plan on leaving money to grandchildren (none yet anyway). They would only receive if one of our children, their parent, died. If one of our kids dies without children, that money reverts back to our other children. I don't know why a spouse would expect to get that money but a friend of mine had that happen - the DIL expected her husband's share of the inheritance from his parents. Never heard of that before.[/QUOTE]

Different strokes...I come from a large family and one of my siblings died a couple of years after one parent and less than a year before the second. When our parents estate was being settled the executor polled the rest of us independently and we unanimously agree that the spouse of the deceased sibling would receive the same share as the rest of us from the roughly half million dollar estate even though that was not provided in the will. The recipient was then able to keep their house, a fact we did not know until after the decision was made. That person had been a member of our family since their wedding - we wouldn't have had it any other way.
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Old 03-10-2017, 09:10 PM
 
Location: Was Midvalley Oregon; Now Eastside Seattle area
4,333 posts, read 1,980,681 times
Reputation: 3327
Having irritating health issues at 67/70. Later half of 2017 we will more visibility, however, we know that we will have more assets that we can use or spend. We have an Only who is doing well and he will get some RE on our passing. We have very good LTCi, so some ROTHs assets will also be passed on.

A lot of the outcomes will depend on who the Only marries.
YMMV
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Old 03-10-2017, 09:53 PM
 
26,274 posts, read 33,266,340 times
Reputation: 32726
Quote:
Originally Posted by Submariner View Post
Spending it all now? Or maintain an estate to go to your heirs?

I see that many people focus on the idea of spending all their portfolio while they are living. The idea of drawing 2%/year or 4%/year, timed to reach zero when you die.

I remember reading in The Millionaire Nextdoor that it is common among wealthy families that they provide inheritances to their daughters, but not to their sons.

In my experience, my wife was orphaned at 12, and spent the remainder of her childhood 'couch-surfing' with cousins. He uncles took up a collection for her and one of them put it in a safe deposit box, for later when she got married. They often used that 'hope chest' fund as a carrot over her head. After we got married, she confronted the uncle for her 'hope chest' money, after 6 months of delay, he gave it to her, $150.

Both sets of my grandparents passed away when I was in my thirties. There was a lot of talk about their estates, etc. For three of them there was none. One of them had an estate left over after all medical costs, each grandchild received about $5,000. At the time, that was about one and a half of my regular paychecks. It was nice to get, but yet, it was a disappointment after all the talk about inheritances.

My parents passed away when I was in my early 50s. It seemed like a big estate, but after all expenses and dividing it out among five siblings, it worked out to $16,000 a piece.

I am not saying that I am not grateful for these inheritances. But $150 at 21, $5,000 at 35, $16,000 at 52. None of these 'set us up'. Basically all that any of these did was to provide an extra principal payment on our mortgages.

Outside of mortgages we have never carried debts, so they were never the sudden ability to get out of debt. In a way the whole inheriting thing has been a bit of a disappointment. [Sounds like I am really spoiled]

I have read many times stories about trust fund children and how it ruins someone to receive a large inheritance at an early age.

I can also see where receiving a big portfolio at 60 or 70 s a bit too late in life to really make much difference in your life.

I have been on pension for 15 years, we own our home, we have no debt. My career included a lot of travel, we have no desire to return to any of the famous tourist locations. We have became settled in our lifestyle.

We just got a fresh inheritance from an in-law. We got a couple toys, but really our discussion has been about investing it and trying to shift it to our sons [before they reach their 60s].

It seems like the focus of so many threads here, is all about spending every penny to reach the grave dead broke, with no inheritance for the next generation. Is that really where our society has gone?

Is it true that nobody is trying to help the next generation?
I seriously doubt I will ever receive any inheritance, other than the task of selling my parents belongings to pay for care. They are both elderly and in poor health. They've refused to sell the house and move into a CC community, and insist on staying where they are. I imagine that they will have to get a reverse mortgage to find the funds to pay for care. I know that they assumed that the house would be somewhat of an "inheritance" for us, but the reality is, it's their asset to be used for their care. And I am perfectly fine with that. I don't think it's a parents duty to provide an inheritance but it's a nice thought, if you are able. I hope to be able to do that for my son, but if not, oh well.
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Old 03-10-2017, 11:09 PM
 
Location: Paranoid State
13,047 posts, read 10,546,074 times
Reputation: 15689
I find it interesting that charitable giving isn't more frequently mentioned. Charitable giving is a large piece of our plan for our estate.
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Old 03-11-2017, 01:19 AM
 
6,410 posts, read 4,826,246 times
Reputation: 13314
Quote:
Originally Posted by Submariner View Post
Spending it all now? Or maintain an estate to go to your heirs?

I see that many people focus on the idea of spending all their portfolio while they are living. The idea of drawing 2%/year or 4%/year, timed to reach zero when you die.............

There seems to be a serious misunderstanding here. A 4% safe withdrawal rate is not "timed" to reach zero when you die. It is the amount that can be withdrawal that all but guarantees the withdrawals will continue at an inflation adjusted amount for approximately 30 years. Few of us who retire at around age 65 will make it that long. Even if we do last those 30 years or so, the amount of our portfolio is not likely to be anywhere near zero. The portfolio amount is likely to be more than the initial amount and possibly several times more.


As to the other issue, how much money to leave as inheritance, I have very mixed feelings. This is equivalent to the parable of this fishes. Rather than give fishes, it is much better to help our children to learn to prosper and succeed. We do that in many ways but in modern society nothing is important as education. The time and effort we have devoted to this has been very considerable. The financial contribution has also been considerable. Look up the cost of paying for 6 years for a double degree and a masters at a top rated University. We also helped one child struggle through many years as an adult. I think we have done enough. Also by the time our children reach retirement, it seems that they will be very secure financially.
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Old 03-11-2017, 02:23 AM
 
72,710 posts, read 72,559,630 times
Reputation: 50244
a 4% safe withdrawal rate is based on making it through the worst of times we have had . anything better than the absolute worst time frames , 1907,1929,1937,1965 ,1966 will leave money left over .

90% of every rolling 30 year period to date , 115 of them have left you what you started with . 2/3's of the time it left you with 2x .

of course the safe withdrawal rate does not account for your spending patterns nor does it consider those large unexpected expenses that cause your yearly budget to go way over .

I know with us this is the 3rd year since we retired we are experiencing insane dental bills and terrible teeth issues . more than 5 digits this year for my wife , 8500.00 for us last year and we had I think 4500 the year before .

so that stuff if not within the years budget will reduce from the bucket left over . what about long term care costs ? they can drain a bucket that is potentially left in very short order .

on the other hand the success rate is bolstered by life expectancy since the odds of someone in a couple seeing 90 is just under 50% .

of course while we know how many people will hit 90 we don't know who . is it you ?

so the variables are pretty great , and the dry powder you need to keep for the what if's can be just as great . so unless you want to risk running out of money before you run out of time you need to keep a pretty hefty stash .
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Old 03-11-2017, 05:04 AM
 
4,747 posts, read 10,378,603 times
Reputation: 2305
Mathjak why not look into a dental health plan?
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Old 03-11-2017, 05:19 AM
 
72,710 posts, read 72,559,630 times
Reputation: 50244
we had one . they do not cover much and the max limits are to low . they are good for routine stuff and an occasional root canal .


i needed many implants and years ago my wife capped all her teeth for cosmetic reasons . 15 years later bacteria got under the caps and destroys the canals so extensive root canal work is needed on so many teeth.

i have spent 50k on just myself the last 8 years as i rejected a few implants down the road .
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