Nearly half of Canadians are banking on an inheritance to meet their financial goals. What are the dangers?

The Globe and Mail – By Gail Johnson

Counting on a lottery win is disastrous financial planning, but nearly half of Canadians are banking on another kind of windfall when they look to their financial future. Forty-four per cent are expecting an inheritance, according to a recent Edward Jones poll.

That kind of life ring apparently can’t come soon enough, with 83 per cent of the 1,500-plus Canadians surveyed saying they haven’t achieved their financial objectives because of hindrances such as high cost of living, low income and insurmountable debt.

While there may be comfort in knowing that a cash gift is in their future – whether it’s through a living inheritance or a will – the financial planning industry agrees that Canadians should be careful about incorporating that into a realistic, sound financial plan.

In addition to dealing with the embarrassment, young people slated to receive money need to get ready for that, says fee-only financial adviser Ngoc Day of Vancouver’s Macdonald Shymko & Co. Ltd. Those who plan to use it for housing should stress-test potential mortgage payments to make sure they are not buying too much house, particularly if interest rates were to rise.

Text Size: S M L
Print This Page Print This Page