Over the coming decades, baby boomers and older generations are expected to transfer more than $100 trillion in assets to their heirs, according to some estimates. If your parents or grandparents are well off, you might assume that at least a portion of their money will become yours, and that might mean you choose to save less today.
Financial experts caution, however, against relying on an inheritance to fund your retirement. Here’s why that’s risky and what to do instead.
Your inheritance could arrive later than planned
Pushing yourself to save aggressively for retirement may seem unnecessary if you’re expecting a generous inheritance once your parents die. The reality, though, is you don’t know how long your parents will live and when that money might arrive.
“Advances in modern medicine mean people in the U.S. are living longer than ever. For many people, an inheritance may not arrive until they are already well into retirement themselves.”
Your inheritance could be surprisingly small
Not only might an inheritance land too late to fund your retirement fully, but the cost of long-term care could erode that windfall. CareScout, a company that helps families navigate long-term care, puts the average annual cost of assisted living at $74,400 as of 2025. For a shared nursing home room, that figure jumps to $114,975.
Not all inherited assets are created equal
There are different types of assets that can be part of an estate plan. Trent Von Ahsen, managing partner at Cedar Point Capital Partners in Cedar Rapids, Iowa, says not all assets may be equally useful for actually paying near-term retirement expenses. Even if you inherit an asset that could be worth a lot in theory, that doesn’t mean it automatically becomes an asset you can liquidate on the spot.
Use an inheritance as bonus retirement money
Ultimately, the amount of money you inherit may be different from the amount you expect, and it may arrive later than anticipated. Prioritize retirement plan contributions so you’re saving on a consistent basis.
“I would build a retirement plan that covers essential spending from your own savings and retirement income. Then model an inheritance separately,” Von Ahsen, managing partner at Cedar Point Capital Partners in Cedar Rapids, Iowa, says. “I would be very cautious about reducing retirement contributions or making an irreversible decision based on money you don’t yet control. If the inheritance arrives, you can revisit that plan then.”
For more information see Maurie Backman “Why you shouldn’t count on inheriting money for your retirement” The Wall Street Journal, October 10, 2026.
Recent Comments