Waiting For A Windfall

August 7, 2019

We’ve talked recently about the dangers of “rolling the dice” in retirement, especially when it comes to picking risky investments.

This week I want to focus on a different sort of investor: the one who doesn’t even have the dice in his hand. In fact, this investor didn’t even need to get in his car to drive to the casino. He’s nestled comfortably at home, awaiting the arrival of someone else who is rolling the dice to bring back big bags of cash to fund his sunset years.

                While all of us might like to be that guy—who doesn’t want someone else bringing us bags of money and taking out all the work?—I’ve been seeing an unusual number of pre-retirees lately who are relying on someone else to be their retirement plan. In other words, they’re waiting on an inheritance from mom, dad, a long-lost great aunt, or other familial relation to be their ticket out of having to plan for their own future. Many of them don’t have a back-up strategy; they’re working now to sustain themselves until the needed relative passes away, and then it’s off to easy street. It’s sort of like playing the lottery while thinking you’ve got the winning ticket before they even start drawing numbers.

                Let me make this clear: if this is your plan, you’re in for a rude awakening. It doesn’t matter if you expect a million dollars to be hitting your account once the probate process ends. You cannot rely on another person—family or not—to be your retirement plan. What if an emergency happens where the funds are eaten up? What if healthcare costs bankrupt them? What if the market turns against their investments? What if they live longer than you can keep working for? Heck, what if they just leave the money to someone who isn’t you?

                If the extent of your plan is waiting on a windfall of income to float your way, you’re going to have a much different retirement than you think you’re getting. While I prefer to not be grim, your plan is literally relying on someone to kick the bucket to save you from poor financial planning. That’s not how anyone can play their cards! Your retirement is going to require your money, your time, and your hard work. Piggybacking on someone else isn’t a plan you want to be stuck in.

                I don’t want to make it sound like all retirees who take this route are some sort of scheming, trip-you-down-the-stairs-and-call-it-an-accident type either. Some of the folks I’ve met are taking this approach out of desperation. They didn’t save enough for most of their adulthood, or had a crisis happen that put them in a bind where they feel like relying on an inheritance is the only way they can retire. It’s a tough situation to be in, but again, your plan can’t be relying on someone else to swoop in and save you. There is absolutely no shame in making difficult choices or sacrifices based on the hand you’re dealt, because at least you’re the one calling the shots using the cards in your own hand.                 If you feel like your plan is too dependent on someone else’s good fortune coming to save you in the 11th hour, I encourage you to give us a call to discuss what other options you might have. Our process is built around working with what you have no matter your situation and finding a strategy that utilizes it in the most effective way to meet your goals.