Feeling obligated to leave money for your children?

[rerod]

I inherited 80% of my retirement money after my parents passed away which is now conservatively invested in taxable Vanguard mutual funds. I feel blessed receiving this, but also almost feel obligated to pass it on to my children. I'm 51, single, make 60k, and don't owe anything.

My sisters think I'm nuts and urge me to spend and enjoy it. But I'm still living and spending like I did before inheriting this money. In other words, I'm still a tight ass and one of the reasons I'm single again.

My tax deferred TIAA/CREF retirement account through work (the other 20%) predicts my retirement income to be the same as present if I retire at 65. So running with the plan of leaving my kids the vanguard investments, it should be allocated aggressively for their time lines. Essentially 100% equities.

I realize this is more of a moral question. But do any of you feel the same way, or are my sisters right?

And for those of you that have more than enough retirement money.. Is it allocated more aggressively than most guidelines suggest?

Thanks!

[Nutria]

Feelings make for convoluted morals that make no one very happy.

Anyway... if you spend this money now which just happens to be 80% of your retirement nest egg, then you're well and truly hosed.

(Of course, we don't know anything about your wants, desires or spending habits and thus can't give you answers beyond the broadly generic.)

[Singuy]

What I would do is spend the earnings made from that inheritance (interest or dividend) and then pass the money down....but really depends on how much we are talking about here.

If you received 50k..then perhaps look to see if your kid's college tuition is paid for...if not then this is a good place to donate some money toward the cause.

If you received say 500k+..then I would just spend the money this amount can earn and pass the 500k + your nest egg down. I will also just have my children spend the earnings and pass the principal down to their children and so on.

I do this because
A. It's a cultural thing
B. I would like to give my children freedom. I don't want them to be slaved to student loans or slaved to a particular role in life that can yield them money and nothing else.

[rerod]

I'm perfectly happy where I stand right now finally saving 1/4 of my income. I feel my possessions weigh me down, so no more toys. I value good honest friends 10 fold.
My house is to big, but its location next to the bus line saves me enough money to pay for the high property taxes.. I also feel vacation travel is over rated. I'm ok watching the world scurry around from my deck.

Of course, we don't know anything about your wants, desires or spending habits and thus can't give you answers beyond the broadly generic.

I want good friends not stuff. I desire my children to forgive me for divorcing their mother. I'm a frugal person who rarely buys anything unless I truly need it. Yes Im boring.

What I cant decide is how to allocate my taxable vanguard investments. Should I allocate according to my age? Or my kids age, or somewhere in between knowing that my tax deferred TIAA/CREF would be enough for my retirement?

[rerod]

If you received say 500k+..then I would just spend the money this amount can earn and pass the 500k + your nest egg down. I will also just have my children spend the earnings and pass the principal down to their children and so on.

Is that a typo? You would just spend it? lol

I'm guessing you meant to write you wouldn't spend it. Yes its over 500k

Allocation?

[Nutria]

I desire my children to forgive me for divorcing their mother.

Obviously we can't help you there...

Should I allocate according to my age? Or my kids age, or somewhere in between

Since you can't see the future and can't know whether or not you are going to need that extra money for an assisted living hospice, etc, etc, you should not worry about giving it to your children.

If there's money left when you die, then give it to them.

[Jluke]

Is that a typo? You would just spend it? lol

I'm guessing you meant to write you wouldn't spend it. Yes its over 500k

Allocation?

He said to live off the interest and dividends that the "500k" generates. Don't touch the principal amount.

Allocation - maybe 60:40 stocks:bonds????

[rerod]

He said to live off the interest and dividends that the "500k" generates. Don't touch the principal amount.

Allocation - maybe 60:40 stocks:bonds????

My bad..

The only thing about leaving the principal alone is that inflation whittles it away over time. I think 80/20 might be more appropriate, but I have cold feet at the moment.

[Singuy]

My bad..

The only thing about leaving the principal alone is that inflation whittles it away over time. I think 80/20 might be more appropriate, but I have cold feet at the moment.

Well you don't have to spend every dime of the earned money if you don't want to combat inflation.

But I feel this is a better compromise vs giving none of this to your kids.

Even in 30 years, 500k with zero money added and inflation took its worth down to 300k is still better than zero.

[rennigade]

I dont have children yet but would like to pass down some $$. But it all depends how they view money...what and how they spend money. If they're constantly blowing every penny they receive then ill gladly give them a small portion of money and donate the rest to a place like st judes or whatever.

[Fishindude77]

Avg person lives to be roughly 85, so at your death your own kids will likely be 50+, and should be established financially by then. Not sure a big windfall would be as beneficial to them as it would be to the next generation, your grandchildren. I'd rather help my kids along the way, and share with them while I'm still alive.

I've really never felt any "obligation" to leave anything behind.

[disneysteve]

I'm still a tight ass and one of the reasons I'm single again.

This statement jumped out at me.

If how you handle money is so extreme that it is negatively impacting your life and your relationships, I think you need to focus on that first. That doesn't mean you need to go out and start spending like a drunken sailor but it sounds like you may need to modify your behavior a bit. If you inherited over 500K, then I think the advice to spend some of the income generated by that money is good. You can still maintain principle and probably grow the total over time allowing you to still leave a nice inheritance.

Ultimately, I think our first priority is taking care of ourselves and our families while we are alive. Providing for them after we're gone is also important but can also be accomplished with term life insurance, not only by leaving a big inheritance. Do you have adequate insurance?

[Nutria]

I'd only feel obligated if my parents asked me to leave as much as possible of "their inheritance to me" to my children.

[rerod]

This statement jumped out at me.

If how you handle money is so extreme that it is negatively impacting your life and your relationships, I think you need to focus on that first. That doesn't mean you need to go out and start spending like a drunken sailor but it sounds like you may need to modify your behavior a bit. If you inherited over 500K, then I think the advice to spend some of the income generated by that money is good. You can still maintain principle and probably grow the total over time allowing you to still leave a nice inheritance.

Ultimately, I think our first priority is taking care of ourselves and our families while we are alive. Providing for them after we're gone is also important but can also be accomplished with term life insurance, not only by leaving a big inheritance. Do you have adequate insurance?

Ive been living paycheck to paycheck most of my life Steve. My X railroaded me and I supported her for almost 20 years which changed me and gnaws at me to this day. The final straw after the X repeatedly threatened divorce, was when she rented out two beds in my home, pocketed the money, and was OK with my daughters boy friend from the projects of chicago threatening my life after I asked him to leave.
Seven people and three dogs in a 1600 sq foot house. Always wear a rain coat guys.

Iv also been taken advantage by other people in my life. Contractors, friends, coworkers. I'm must be gullible as hell and have BANK tattooed on my forehead.

I want the best for my family, even my X who remains in my will and life insurance policy. But spoiling my kids like the X did is one of the worst things anyone can do.

This sure did turn into a sob story or "life according to me".

Now I understand the phrase.. Life sucks and then you die.

[rennigade]

Ive been living paycheck to paycheck most of my life Steve. My X railroaded me and I supported her for almost 20 years which changed me and gnaws at me to this day. The final straw after the X repeatedly threatened divorce, was when she rented out two beds in my home, pocketed the money, and was OK with my daughters boy friend from the projects of chicago threatening my life after I asked him to leave.
Seven people and three dogs in a 1600 sq foot house. Always wear a rain coat guys.

Iv also been taken advantage by other people in my life. Contractors, friends, coworkers. I'm must be gullible as hell and have BANK tattooed on my forehead.

I want the best for my family, even my X who remains in my will and life insurance policy. But spoiling my kids like the X did is one of the worst things anyone can do.

This sure did turn into a sob story or "life according to me".

Now I understand the phrase.. Life sucks and then you die.

Ever hear the expression..."fool me once shame on you...fool me twice shame on me." How many times are you going to let someone take advantage of you. It seems that you're surrounding yourself with people you shouldnt be around period.

Not sure what else to tell you...good luck with whatever you do.