What To Do With an Inheritance

inheritance

The real sand in the gears in this calculation is how likely you are to receive the inheritance. Lots of things can happen to an inheritance.

Some parents leave different amounts to children depending on the children’s various financial situations. If your parents are like that, expect, as the high-income professional in the family, to get a smaller chunk.

The easiest thing to do with any possible inheritance is to just count it as gravy. That means if it comes, great. If it doesn’t, that’s fine too. That means that the money you inherit should be earmarked for charitable contributions, leaving as your own inheritance, or at least only counting on it for extras rather than mandatory living expenses.

The Easiest Thing to Do With an Inheritance

The “Sure Thing” Inheritance

On the other hand, some people are going to inherit a rather substantial sum relatively early in their investing careers, and the chance of something going awry seems very small. If that is the case with you, you may want to add the value of the inheritance into your plan.

Talking to Your Folks

Perhaps the best thing to do is to actually talk to your parent or whoever you expect the inheritance from and tactfully (very tactfully) ask if an inheritance is something you should incorporate into your financial plan.

The Bottom Line on Inheritances

If you’re sure you’re going to get an inheritance, sure about how much it will be, and sure about when you’re going to get it, then factor it into your retirement plans (always adjusting as you go of course.) I suspect that’s a very small percentage of inheritors, however.

FOR MORE ABOUT THIS POST, VISIT PHYSICIAN ON FIRE