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Originally Posted by puckedoff
It should be the norm for people to pass inheritances to grandchildren rather than their kids. If I croak at ~90, my kids will be in their sixties and (hopefully) fairly well set, while their kids would be ~30 theoretically and the inheritance would be much more impactful.
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This makes some sense, but there are a few considerations. One is that a lot (and I mean a lot!) of those boomers still have a bunch of debt. So, those inheritances are spoken for and that is kind of viewed as a get out of jail free card by a lot of boomers. Mom and dad die, you inherit a bunch of cash and pay those debts so that the retirement plan works.
Quote:
Originally Posted by CliffFletcher
Yes, so much uncertainty makes planning very difficult. And it’s becoming increasingly common for people to inherit only once they’re already retired themselves.
Which is why I emphasized the housing portion of it - its value is likely to endure until the last parent has died. When you combine the incredibly high value of property today with the fact many Canadians have not saved enough for retirement, those windfalls will wind up being very important to many retirements (and I expect account for most of the expected $1 trillion in wealth transfer).
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And the one enormous factor of that housing portion is that it's tax-free. That house that those folks lived in for 35 years, that grew from $200k to $1m means that there is $1m less some real estate fees to split among the heirs. It's not like an investment account (particularly a registered one) where there are taxes to be paid.