Californians shouldn't blow inheritance, but save for retirement


People in California may have seen a recent financial news article about inheritance, and how people who are lucky enough to receive an inheritance plan on using it. In a recent survey of people under the age of 60 who expected to inherit money or assets, most people said they would use the money to save for their own retirement.

Of people surveyed, 42% would use the inheritance to fund their retirement, 18% said they would use the money for debt reduction; 12% to pay for education; and 9% to upgrade their housing. Only about 6% said they would use inheritance money to buy something lavish like jewelry, a luxury car, or vacation travel.

The survey results were very telling, and paint a picture of a more prudent financial generation. This is refreshing, as it appears the majority of Americans have learned from the recent economic downfall that an IRA or retirement plan is by no means guaranteed to grow at a healthy rate year-after-year. Americans also have concerns about Social Security, and the possibility that Social Security benefits could be slashed as the program lurches towards insolvency in the coming years or decades.

Whatever people choose to do with their inheritance, they should always incorporate these assets into a comprehensive estate plan. People of means in California could use this money not only to ensure their own comfortable retirement, but also plan for the next generation of heirs, children and loved ones who will hopefully have the benefit of an inheritance one day. In order to get the most out of their money, people should always consult with an experienced estates and trusts attorney to find out how to get the best asset protection solution and avoid unnecessary taxation.

Source: Marketwatch "Next stop for your inheritance? Your IRA," Anne Tergesen, September 17, 2013

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