As per SmartAsset, the average inheritance in the U.S. is around $46,200. Approximately 30% to 40% of American households receive an inheritance, yet inherited wealth accounts for only 20% to 50% of a household’s total assets.
Thinking about a future inheritance can bring thoughts of sudden financial freedom. You think, Maybe I don’t need to save that much… I mean, Mom and Dad have a paid-off house, right? Although this notion is reassuring, relying on another person’s legacy to finance your retirement is both risky and unstable.
There are far too many “what-ifs,” none of which can be taken for granted. If you’re depending on an inheritance to finance your golden years, consider these 15 reasons to give that strategy a serious reconsideration.
Inheritances Are Often Smaller Than You Think
You may envision a windfall, but the average inheritance in the U.S. is just about $46,000, based on Investopedia. That amount is hardly enough for a full retirement, especially when you’re aiming for twenty or thirty years of living expenses.
And if that sum is divided among several siblings, the end result may decline sharply. Taxes, debts, and long-term care expenses can also erode the sum. What you anticipate receiving and what ultimately arrives can differ by the world.
It Encourages Financial Procrastination
Anticipating an inheritance may give you a false sense of financial security. You might delay budgeting, saving, or learning to invest, assuming a safety net is in place. But what if it never materializes?
Retirement depends on careful planning and purposeful action, not on wishful hope. Delaying intentional choices only hurts you, no matter what comes later.
The Timing May Not Work in Your Favor
Even if your loved one intends to leave you something, you have no idea when it might materialize, or whether it will arrive just when you really need it. People are living longer than ever before, and that’s great news for them, which makes for a tougher retirement timeline. As of 2025, the average life expectancy in the U.S. is approximately 79.4 years.
Should you retire at age 65 and your parents make it into their nineties, the inheritance might not reach you until you’re quite deep into your retirement years. And it may create a sizable gap you never anticipated. Counting on an unpredictable timetable? Not a good idea.
You Miss Out on Compounding Growth
Postponing retirement savings in the expectation of an inheritance means you forfeit the power of compound interest. Every year you don’t save is a year in which your money isn’t growing.
Take, for instance, depositing $5,000 each year for 30 years at a 7% return: that comes to more than $472,000, but deferring that by just ten years reduces the total to roughly $245,000. Believe me, your future self will heartily thank you for doing it sooner rather than later.
Medical Costs Can Wipe It Out
Long-term care is anything but cheap. Should your parents or relatives require nursing homes, home care, or prolonged hospital stays, those costs can devour an entire estate in no time. As of 2025, the average cost of long-term care in the U.S. is approximately $138,000 per person over the course of their care needs, Consumer Affairs notes.
That prospective inheritance might already be spoken for by the time you ever see a dime. Healthcare offers no space for sentimentality.
There’s No Legal Guarantee
Despite assurances that you’re covered in the will, that still offers no legal assurance. A will may be rewritten at any moment, beneficiaries can be substituted, and verbal assurances hold no weight in probate court.
One bad year, or an unexpected relationship, might upend the whole estate plan. If your name isn’t written in the deeds and the assets are still there, it’s not your money. Sadly, it might never come to pass.
Inflation Will Eat Away at Its Value
Suppose you indeed receive a lump-sum windfall of $100,000 today; that sum would look terrific right now, but what about 20 years from now? Inflation steadily eats away at purchasing power, so by the time that money reaches you, it could buy far less than you imagine.
For instance, the U.S. Bureau of Labor Statistics highlights that $1 in 2021 had the same buying power as only $0.926 in 2022, meaning a 7.4% loss in purchasing power in just one year. Even a modest inflation rate of 3% per year can chop the value of your money by almost half over 25 years. Costs in retirement won’t be frozen in time, so your plans can’t be, either.
Your Loved Ones May Need That Money Themselves
Life can chuck curveballs, even for those with solid financial plans in place. The person you’re counting on to inherit from may have to tap that money for their own support or for other family members. Perhaps it will fund their grandkids’ college tuition or help them cover an unforeseen emergency.
Their financial priorities may change, and that’s perfectly fine. If you’re depending on that inheritance, however, it could set your whole plan off course.
Family Drama Can Ruin Everything
Inheritances always seem to release the inner drama queen. When the stakes are financial, siblings fight, wills are disputed, and emotions run high. In fact, a report by estate law firm Lesser Lutrey Pasquesi & Howe shows that 44% of estate disputes involve siblings, making them the most frequent parties in inheritance conflicts.
Close families can fracture over what they’ll inherit. Relying on someone else’s estate to secure your future is an unpredictable and risky approach to retirement planning.
You Could Inherit Assets—Not Cash
Even if you were to inherit a sum, it could be anything but liquid. If the inheritance comes in the form of real estate, antiques, or stocks, you might have to hang onto them for years or pay for taxes, upkeep, or legal fees.
It’s not the same as a ready-to-spend nest egg. If you don’t intend to move into Grandma’s condo and auction off her spoon collection, then you’ll probably need a Plan B.
You Might End Up Being the Caregiver
If you anticipate inheriting, you may find yourself responsible for the care of the person leaving you the money. About 29% of U.S. adults (roughly 65.7 million people) serve as family caregivers for an ill, disabled, or aging relative. Caregiving frequently takes its toll, affecting both your emotions and your pocket.
You may need to scale back at work, cover personal expenses, or make up for costs that the insurance won’t cover. All of a sudden, that windfall looks a lot like pay for a job you never anticipated.
Financial Independence Feels Better Than Waiting
It’s downright empowering to plan your own retirement independently of anyone else. You’re the captain of your ship, choosing the course, charting the destination, and monitoring progress, all in full confidence that it’s up to you.
That confidence comes from a place no inheritance can ever purchase. It’s not a matter of pride; it’s all about peace of mind. You deserve it, and that’s a pretty amazing feeling.
Debts Can Drain the Estate
If the person leaving you money owes debt, anything from credit cards or loans to a mortgage, that debt has to be paid off before you receive anything. Bills owed by the deceased must be settled before any funds are distributed to the beneficiaries.
Even if a loved one has pledged you a share of the estate, the entire inheritance could be eaten up by outstanding debts. According to AARP, the average total debt per retiree in the U.S. is approximately $45,000 for those aged 65 to 74 and about $36,000 for those 75 and older. That’s not a small obstacle.
You Could End Up Disappointed—And Unprepared
Ultimately, inheritances are unpredictable. They can shift in size, shrink, vanish, or, well, never show up at all. But retirement?
It’s coming whether you’re ready or not. Treat inheritance funds as a bonus, not as the primary plan. So, should it arrive, great! If it doesn’t, the control remains in your hands.
Taxes Might Take a Bite
While most Americans don’t face a federal estate tax (the threshold is $13.99 as of 2025), some states do tax inheritances or estates. Where you reside and what you ultimately receive can result in a hefty cut before the funds ever reach you.
If you receive certain retirement accounts, you could be required to exhaust the funds and pay income tax on them over ten years. The unwelcome tax bill? Not quite rosy.
KEY TAKEAWAYS
- Inheritances are unpredictable; don’t bet your future on a “maybe.” Long-term care bills, family squabbles, and outstanding debts can swallow the money before it ever reaches you, or leave it coming way too late.
- The average inheritance isn’t enough to retire on anyway. Coming in at roughly $46,200, it offers nothing more than a faint scratch on the savings you’ll actually need for a 20–30-year retirement.
- Waiting on a windfall means missing out on real financial growth. Passing up years of saving and investing means you’ll give up hundreds of thousands of dollars in missed compound interest.
- Building your own retirement plan = peace of mind. It’s a lot more empowering to know you’re secure, even if a surprise check never finds its way into your mailbox.
