Nearly 10% of Americans feel less pressure to save knowing they’ve got an inheritance coming — but here’s why that windfall could easily evaporate

While it can feel comforting that a windfall is waiting for you down the line, it’s also one of the riskiest money assumptions you can make. What happens if that expected money doesn’t end up coming your way?

Why you may not get what you expect

There are a few key reasons why wealth gets drained faster than expected, sometimes leaving little or nothing behind.

According to MassMutual, one simple reason is that people are living longer [2].

Longevity means more money spent on health care and end-of-life costs, and for those who are living an active lifestyle, wealth is being spent on enjoying their hobbies.

Fidelity estimates that a 65-year-old couple retiring today will likely need $172,500 just to cover health care expenses in retirement [3]. That’s a 4% increase over 2024, and according to the company, the number continues to rise. Annual medical spending for the elderly also climbs steeply with age, more than doubling between the ages of 70 and 90, according to the National Institutes of Health (NIH).

The costs don’t stop at doctors’ visits and prescriptions. Long-term care is one of the biggest wild cards in retirement planning.

A private nursing home room costs $10,600 per month, according to CareScout [3]. Even a semi-private room averages more than $9,000 monthly. Meanwhile, chronic conditions common in later life, like heart disease, diabetes, cancer, kidney disease, arthritis and Alzheimer’s disease, can be expensive to treat. Alzheimer’s alone costs the U.S. $321 billion annually, estimates UCLA Health, a figure projected to top $1 trillion by 2050 [4].

All of this means that an inheritance you may be counting on could evaporate covering your parents’ care.

And there’s another wrinkle: a significant share of Americans don’t even have a will. A recent Caring.com survey suggests that only 24% of U.S. adults have a will [5]. Without having formally documented estate plans, beneficiaries are open to delays, disputes or lower distributions.

How to save even if you expect a windfall

So what’s the solution? You’ll want to build your own personal financial cushion, and treat any inheritance as a bonus — not a guarantee.

Here’s how to save responsibly, even if you think you’re getting an inheritance.

Max out tax-advantaged accounts

Build a strong financial foundation on your own, starting with consistent retirement savings in 401(k)s or individual investment accounts (IRAs) and, if available, health savings accounts (HSAs). These accounts offer tax advantages that can cushion the blow of future medical bills.

Build an emergency fund

Keep three to six months’ living expenses in liquid savings to cover medical or caregiving surprises without having to tap an inheritance. It can also keep you from having to rely on credit cards or loans if you have a financial surprise.

Prepare for long-term care

Look into long-term care insurance: On average, according to the National Council on Aging, premiums for a $165,000 benefit policy are about $950 to $1,900/year, depending on age and gender, which is much less than paying nursing home fees out of pocket [6]. For those worried about long-term care, looking into insurance policies while you’re still healthy may make more sense than leaving the risk uncovered.

Prioritize debt elimination

Reduce burdens like high-interest credit or student loans so that you can ease the financial pressure as health costs rise.

Get professional guidance

Financial advisors can help you model scenarios, like if your inheritance declines or health care demands increase. They can help put together a balanced, flexible strategy.

Most importantly of all, talk with your family.

If you think that an inheritance is part of your financial future, ask whether there’s an estate plan in place, whether a will or trust exists and how health care costs are being managed. Being transparent now can prevent misunderstandings and financial disappointment later.

An inheritance can be a gift, but it should never be a safety net. With health care costs rising and longevity increasing, the smartest move you can make is to save as though you’ll never see a dime.

Article sources

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