Quote:
Originally Posted by Locke
Yeah, this is something that I feel might be lost?
I know a number of people who are, lets say...'less than proactive' in regards to their lives and careers because the eventual inheritance will paper over all of that, meanwhile they coast through their lives in the warm feeling of that eventual safety blanket.
Meanwhile...they're demonstrating this attitude to their kids...well...sorry kids, there may not be much left for you once mommy and daddy are done.
Because unless you're unfathomably wealthy and well set up...inheritances tend to be a declining balance.
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For typical Canadians, inheritance will come largely in the form of a house being sold. If your parents are homeowners, and you’re a homeowner, I’m not sure I see how the pot is diminished. In fact, since on average families are getting smaller, the pot will be divided among fewer siblings in the succeeding generation. The only way the home value will be diminished is if you borrow against the value of your home, or liquidate it to fund your retirement. Which would be pretty unfair if you didn’t set any aside for your kids.
And I haven’t seen anyone suggest it’s cool to spend your entire inheritance if you have kids*. The question was whether people factor it in at all. And you have to be either naive or privileged to believe the enormous monetary value of homes in the country isn’t being factored into expectations around retirement.
For a lot of Canadians it’s barely even a choice - if you have $75k saved in RRPSs after retiring from a life working at a license registry or Co-op at $55k a year, the $150k gain from half or third of a house will mean the difference between a secure retirement and a bleak one. Whereas if you have $750k saved, it’s no real sacrifice to pass that $150k directly to your own kids.
I imagine the typical Canadian, who falls between those two extremes, will pass some on to the next generation and use some to supplement their retirement.
* The moral judgements being made here seem inconsistent. If you think passing your entire inheritance on to your kids is the right thing to do, do you think the right thing for your kids to do will be to pass their entire inheritance on to
their kids?