I am aware that Rule #1 of a large inheritance is do NOTHING right away to avoid stupid decisions etc.. Obviously sitting down with a financial planner is also of the utmost importance, especially due to our unsophisticated investment knowledge, but I wanted to start getting a feel for things.
Something in the range of C$1.75-2M. It is comprised primarily of two UK properties which I have no intention nor desire to keep. This amount is after the 40% UK inheritance tax comes off the top. An additional C$500K would be added to the mix, in two ~C$250K chunks at various times in the next 10-15 years. I recognize that counting on an inheritance is never really a wise retirement/investment strategy. However, due to existing circumstances, including diligent estate planning by family, plus numerous factual conversations with everybody involved, the surprises are greatly reduced for when that time comes. As such, I’m in a rather unique situation that I have yet to see discussed in “normal” retirement/inheritance/investing conversations. Essentially, a fortunate position of being very “asset rich” but relatively cash poor, with exactly enough for day to day living, and living with essentially zero debt.
Current situation:
Aged 50, earning $35K/year and wife earns $10K/year
Company pension worth approx. $1500/mth at age 65
No other retirement income beyond OAS/CPP.
No RESP or TFSA’s
Approx. $55K in unused RSP contribution room.
Mortgage free house in Toronto, worth approximately C$1M
No other significant assets.
No debt other than a $5K used car loan ($250/mth for 2.5 years).
Three kids, 19, 15, and 11. The eldest currently runs his own small business in a partnership.
No current plans for retirement but would be happy to retire almost immediately if financially practical. As a family we have been happy living a very frugal lifestyle (no pricey annual vacations, no new fancy cars, no meals out, all second hand clothes) and that is likely to continue. Having said that, there is some pent up demand for travel and adventure but it wouldn’t be excessively extravagant or particularly frequent. More along the lines of a week long cottage rental here and there etc. Also, there is a “wish list” for our home, but not a $400+K gut-job renovation. Something in the region of $150K would more than cover what’s required.
There are no plans to “downsize” our home in the future as we age. We intentionally purchased a small home in the perfect neighbourhood. Even though at times it has been a tad too small for us all, it was done with an eye to the future. This has kept the operating expenses low and we won’t need to move to a smaller home later in life.
As far as investing in real estate, we would be unlikely to want to become landlords. However, a modest cottage in Muskoka, for personal use or perhaps a second property in Toronto for our child to live in, at a reduced rent perhaps with a roommate, would be something to consider.
Although the money may well be in two separate cheques, a number of weeks./months apart. Since deposits are only CDIC insured up to C$100K, depositing a lump sum of $1M+ in a single account is a little never wracking. Albeit, safer in a Canadian bank that most places, but still. There is the immediate practical concern of exactly WHAT do you do in the immediate moment after receiving the cheque?
And once that initial hurdle is crossed, then what….
Something in the range of C$1.75-2M. It is comprised primarily of two UK properties which I have no intention nor desire to keep. This amount is after the 40% UK inheritance tax comes off the top. An additional C$500K would be added to the mix, in two ~C$250K chunks at various times in the next 10-15 years. I recognize that counting on an inheritance is never really a wise retirement/investment strategy. However, due to existing circumstances, including diligent estate planning by family, plus numerous factual conversations with everybody involved, the surprises are greatly reduced for when that time comes. As such, I’m in a rather unique situation that I have yet to see discussed in “normal” retirement/inheritance/investing conversations. Essentially, a fortunate position of being very “asset rich” but relatively cash poor, with exactly enough for day to day living, and living with essentially zero debt.
Current situation:
Aged 50, earning $35K/year and wife earns $10K/year
Company pension worth approx. $1500/mth at age 65
No other retirement income beyond OAS/CPP.
No RESP or TFSA’s
Approx. $55K in unused RSP contribution room.
Mortgage free house in Toronto, worth approximately C$1M
No other significant assets.
No debt other than a $5K used car loan ($250/mth for 2.5 years).
Three kids, 19, 15, and 11. The eldest currently runs his own small business in a partnership.
No current plans for retirement but would be happy to retire almost immediately if financially practical. As a family we have been happy living a very frugal lifestyle (no pricey annual vacations, no new fancy cars, no meals out, all second hand clothes) and that is likely to continue. Having said that, there is some pent up demand for travel and adventure but it wouldn’t be excessively extravagant or particularly frequent. More along the lines of a week long cottage rental here and there etc. Also, there is a “wish list” for our home, but not a $400+K gut-job renovation. Something in the region of $150K would more than cover what’s required.
There are no plans to “downsize” our home in the future as we age. We intentionally purchased a small home in the perfect neighbourhood. Even though at times it has been a tad too small for us all, it was done with an eye to the future. This has kept the operating expenses low and we won’t need to move to a smaller home later in life.
As far as investing in real estate, we would be unlikely to want to become landlords. However, a modest cottage in Muskoka, for personal use or perhaps a second property in Toronto for our child to live in, at a reduced rent perhaps with a roommate, would be something to consider.
Although the money may well be in two separate cheques, a number of weeks./months apart. Since deposits are only CDIC insured up to C$100K, depositing a lump sum of $1M+ in a single account is a little never wracking. Albeit, safer in a Canadian bank that most places, but still. There is the immediate practical concern of exactly WHAT do you do in the immediate moment after receiving the cheque?
And once that initial hurdle is crossed, then what….