“In 2006, a study showed that about 1.5 million Canadians were relying on their inheritance as the primary source of capital to fund their retirement. On average, Canadians expected to receive a total of $150,600 in cash or cash equivalents, and $151,200 in non-cash inheritance. But in reality, inheritance sums received were significantly less – the average inheritance received that year was $56,000.” [BMO report, July 2009]
“36% of the wealthiest families have received an inheritance; the average amount of that inheritance was $136,000.” [G&M, 8 Nov 2010]
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[Following responses to Snats, at VREAA, commenting "Waiting impatiently for loved ones to die so you can use their money. Nice."]:
“I had a friend from high school with that exact plan – then her brother died and she kicked her inheritance-to-be plan into high gear. She convinced her mother to sell her house and move in with her and her boyfriend. The mother agreed, put the house on the market for about $1.5M (Kitsilano) and after paying off the reverse mortgages and deferred taxes mom had acquired over the years to help out her offspring, daughter realized less than $150,000. This was not exactly the plan the daughter had envisioned but I wonder if that is what is in store for many a baby boomer.”
- rmac at VREAA 22 Aug 2011 10:12am
“Yeah, my friend had the same plan until his widowed father remarried a much younger woman who is making sure that she will get the house. His wife’s parents are in care (actually two care facilities) which is costing over $10,000 a month for housing and care. They are paying for their care through their real estate equity.”
- Vangirl at VREAA 22 Aug 2011 11:17pm
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Behaviour around the issue of inheritance is complicated, even at the best of times. Expectations of inheritance may lead to tension amongst siblings, ambivalence about parents’ longevity (“Waiting impatiently for loved ones to die”), distress about parents spending their money on care (or anything else), and a multitude of possible social shennanigans.
In a time of a speculative mania in housing, when the market value of an average property is so high compared to income that it becomes a life changing lottery win, issues around inheritance become proportionately exaggerated.
In Vancouver, real estate is the largest source of expected future inheritances. -vreaa
Betting on inheritance, more like betting on parental help. Statistics quiz: if the life expectancy is 82 years, how old are you on average when you get the parents’ inheritance?
If you don’t know the answer, I suggest you get your parents hooked on smoking and snowmobiling.
I heard within the last couple of years that the average inheritance the children of Boomers will receive is $300,000. I wonder how much of that was contingent on selling their house. And people expect to receive $150,000 to fund their retirement? Yikes. Considering how long we tend live these days that would be gone in no time.
I just hope my parents have enough to pay for their own care late in life. If they can do that, and I don’t get a dime, I’m happy.
When 65 was declared the “official” retirement age in the US, the average life expectancy was right around 65. These days, people are now trying to live 25 or 30 years off of retirement income and uncertain pensions. Scary stuff. And for my younger generation, the private company pension has gone the way of the dinosaur.
I just think that is sad and morbid….waiting for your parents to die so you can fund your house and/or retirement. And what about your own kids….what message are you sending to them and worse yet, what will be left to pass on to them? Especially $150K, it doesn’t go far these days. Sad.
A friend of a friend’s Mom died recently, long after Dad died. They had a big house on double lot near Jericho Beach with a view. The only child in this arrangement was stunned to see the family home sell for ten million dollars! She is (was) a teacher so I assume she’s kicking back somewhere sunny and not buying penny stocks.
Rich Albertans are coming! http://www.vancouversun.com/business/axing+benefits+Alberta+recreational+property+buyers/5323725/story.html
When the HST started it provided a boost to the real estate market (supposedly). Now it is ending and the result is – a boost to the real estate market!
Oh, that’s the excuse is it? HST came into effect so Albertans stopped buying recreational properties (nevermind that a significant portion of those are USED so HST doesn’t apply anyway). Seems like they are grasping for excuses as to why real estate sales have dropped in the Interior. I don’t think the HST is the correct reason (considering the number of used properties languishing on the market). Nice try, realtors!
Ah the ratchet theory for tax policy fallout. Also applies to mortgage rates, immigration, and loose nuts.
Mortgage rates go down -> more buyers
Mortgage rates go up -> (silence…)
Mortgage rates go down -> more buyers
reverse mortgage since they were 62….. now they are 93! no inheritance for me but at least mom and dad are living it good
spam, but we’ll leave it up because it’s just so appropriate for this thread.
Oh dear. Reddit needs to shut up: http://www.reddit.com/r/vancouver/comments/jxz8d/the_three_most_expensive_homes_for_sale_in/
pump it