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Retirement planning around your inheritance is a mistake

It is incredibly tempting for anyone who has wealthy parents to have "great expectations" for his or her future inheritances. In fact, many Kentucky residents have such great expectations that they completely neglect the need to plan for their retirements, and they put their financial security on the line, betting on the hope that they will one day receive a sizable inheritance that will make up for their won lack of retirement savings.

However, it is very risky to stake your future retirement on the idea that you will receive a sizable future inheritance. Indeed, although it might be possible to receive the inheritance you are thinking about -- if your parents die at the age when most people die, and they manage to keep the bulk of their retirement savings until that time occurs. However, so many things can happen in the meantime that could absolutely wreck your parent's retirement savings -- and your inheritance. Stock market issues can devastate someone's retirement in a heartbeat and long-term health costs could also deplete your parents' savings. Any number of unforeseen circumstances could arise to cause problems. There could even be a falling out between you and your parents and you could get disinherited.

The bottom line is this: No one can feel secure about his or her financial future if that financial future is dependent on someone else. It is always best to get your own ducks in a row rather than depend on someone else and that person's ability to keep his or her ducks in a row.

Numerous legal battles have been fought by disinherited relatives following the death of a loved one. Sometimes those battles are won. Sometimes those battles are lost. No matter which side of these battles you are on, the best position to be in is one of financial independence -- so that your entire livelihood and future is not dependent on whether or not you get your inheritance.

Source: USA Today, "A retirement plan based on an inheritance a grave mistake," Peter Dunn, May 07, 2016

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