Not retiring young in the sense of just quitting their jobs, but if someone has been saving for their own retirement already, then their parents pass away, shouldn’t it be pretty common for a lot of that inheritance to pass down to them? But it seems like most people still struggle to save enough to retire even if their parents have passed on.
What is the reason most people don’t retire at 55 or 60 assuming their parents have passed on by then? Do people not usually save enough for interest to cover a lot of the spending?
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“live on for the rest of their lives” is a different time scale for the parents compared to the children. Living on X for 10-20 years is different than 30-40 years. If they die 10 years into their retirement, that leaves them (for example) 10 more years of assets. Pass that onto someone in their 40’s, it only works if the children die in their 50’s.
Because that concept does not make any sense. You retire at 60 and have enough money to make it to 90. You can’t all of a sudden have enough money for a 40 year old to retire.
You’re missing a big point….
Two parents retire with enough money to last for the rest of *their* lives…they live through retirement, spend that money, and pass away.
Barring early deaths, the money has been spent according to plan.
Only planned inheritances and early deaths provide more money to heirs
Having enough money to retire at 60, while trying to make it to 90 isn’t the same thing as 40 trying to make it to 90.
People in their 60’s are far less likely to travel or splurge their retirement savings. They also have less expenses.
You need a fair amount of money per year to live just to pay off food, housing, repairs, clothes, cars, TV, etc and the younger you are the higher these expenses are.
One thing that hasn’t been mentioned: most people, at least in richer countries, put most of their savings for retirement into pensions. Pensions won’t pay out to your children.
It’s rare for both parents to die so young — losing both parents before the parents turn 65-70 is not that common now, especially among the classes who’d be able to save ample for retirement. Those are also the ones with less physically demanding jobs, access to better healthcare, more likely to eat healthy and exercise.
But I suspect the inheritance relatively young does probably happen a lot more than you hear about… people aren’t likely to brag about a big windfall, and many probably choose to allocate the money differently, such as buy a vacation house or fully pay for their children’s / grandchildren’s college vs. just retiring. And health insurance before Medicare is a HUGE consideration! But they may take a less demanding job, say leaving a law firm to join a non-profit as legal counsel or stop working crazy hours in hopes of a promotion, etc.
The retired parents also get social security each month to supplement their retirement income, and they pay less for Medicare health insurance. Without those benefits, it’s harder to live on just the amount of the retirement money.
People with a healthy financial situation tend to not be people that hate working. In fact, they are usually people who seek to maximize it one or more dimensions (e.g. time-off flexibility, income, a task that’s meaningful, etc.). The mega-rich is an entirely different animal, but for your average couple million net worth, if your parents were able to pass on with a few million in the bank, there’s a good chance they instilled a good work ethic and career guidance in you so that you have a career you enjoy and value the concept of working. So if you can earn a few hundred thousand a year in a job you enjoy, and have a good vacation policy, there’s no reason to just stop. Plus there’s a good argument to be made that it’s not mentally healthy.
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