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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe subject of this week’s IBJ Podcast is touchy, but it requires discussion due to the effect in can have on your financial future and the quality of your relationships with family members. This episode is all about inheritance, including the best and worst ways you can deal with a life-altering influx of money and/or property.
The bottom line is that the inheritance recipient benefits from someone’s death. And that seems distasteful. Nobody wants to look greedy at the expense of a family member’s life. But because it seems distasteful, we don’t talk about inheritance very much. And because we don’t talk about it, some folks don’t handle it very well.
It helps to start with a little context. According to the Federal Reserve, the average inheritance today is about $46,000, although the vast majority goes to wealthy families and more than two thirds of households receive nothing. It’s also smart to keep in mind that your perception of a potential benefactor’s wealth is probably wildly off, so making assumptions about future inheritances is a big mistake when doing financial planning.
IBJ personal finance columnist Pete Dunn, aka Pete the Planner, has seen many recipients mishandle and waste inheritances, especially when they view them apart from their long-term financial strategies. In this week’s episode, Pete also shares his thoughts about how much you would need to inherit in order to immediately retire; why putting a big down payment on a lake house might not be advisable; and why preventing family squabbles should be a key goal in planning to divide your assets.
Click here to find the IBJ Podcast each Monday. You can also subscribe at iTunes, Google Play, Tune In, Spotify and anyplace you find podcasts.
You can also listen to these recent episodes:
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IBJ Podcast: Her goal was to finish high school. Now she’s launching a college at Butler for underserved students.
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IBJ Podcast: Explaining the Indy Eleven soccer stadium, MLS soccer bid drama
IBJ Podcast: New AES prez on goals, growing up in Indy and the system upgrades that led to billing mess
IBJ Podcast: Pete the Planner on what your career earnings should tell you about retirement savings
IBJ Podcast: John Stehr, news anchor turned mayor, on tackling one of Zionsville’s hottest issues
Looking for another podcast to try? Check out IBJ’s The Freedom Forum with Angela B. Freeman, a monthly discussion about diversity and inclusion in central Indiana’s business community.
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Maybe I misheard, did you say 25 to 33 times current household income at Retirement? Should that number be 25 times of projected annual expenses when you retire? I always heard 10 to 12 times of your final working year’s income. What about Social Security at retirement as an offset?