The need to take an inheritance into account when formulating a plan for retirement is critical. For many individuals the single biggest lump sum they receive in their lifetime will come in the form of an inheritance and this can be highly significant in the money that is required in retirement.
If you calculate that you need £300K for example by the time you get to retire in various pots and plans, and you are likely to receive an inheritance from your parent or other benefactor of £100K at some point, then this obviously does make a difference to the amount of saving or fund that you need to accumulate through your own endeavours.
The problem with inheritances is naturally that you can never be sure of what you might be getting, how much and when. Many people have no idea what their parents or other relative’s intensions are and do not know what provision has been made for them. In addition, with so many people now living into their 90’s and even longer, it is perfectly possible that an inheritance from a parent may not come until a late stage in the beneficiaries own life, well beyond the time when they themselves can retire.
Inheritance is a very important part of retirement planning because the amount of money and the difference it can make can be very significant to the plan of action that is followed, however, if there is any doubt about the figures or the likelihood of receiving the inheritance, then it needs to be included in any figures and plans with a great deal of care.
Overall, however, inheritances remain a big part of financial planning towards retirement. |
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