Personal Finance

Set To Inherit $5M And Without A Family, Can I Ease Up For Retirement?

David Beren

Published: March 6, 2025 1:03 pm

If you stop and think about what life would be like if you had more than enough money, it’s okay to believe life would be much easier. While the reality is that more money can mean more problems, there is also a scenario in which inheriting money can get you one step closer to retirement. 

This is precisely the scenario one Redditor is experiencing, as they are set to inherit $5 million in the next 10 years. Posting on /rRichPeoplePF, they are considering whether receiving all this money means they can pull back a little on retirement savings. 

This is a challenging topic as inheritance money is never guaranteed and taking the foot off the gas now could have serious repercussions if something goes wrong with receiving this money down the road. 

The Inheritance Money

The most important information we know from this Redditor is that they are single, in their 30s, have a paid-off apartment, $50,000 in investments, and are set to inherit close to $5 million sometime in the next 10 years. 

This said, the focal point here is that this Redditor does not and has not done much to build a nest egg. While they indicate they make some contributions to a retirement fund for tax benefits, they are not doing it aggressively to contribute the maximum amount allowed under law.  

Unfortunately, we’re also missing crucial information that would make any recommendation here more impactful. We don’t know whether this $5 million has already been set aside for this individual or is this just money they believe they will receive when someone dies.  

Alternatively, is this a scenario of someone who believes they are inheriting around $5 million because that’s how much someone is currently worth? The difference between these scenarios is that the direction this takes completely changes any recommendation I or the Reddit comment section can make. 

The Big Difference

Suppose we knew with certainty that this $5 million had been set aside for this Redditor and that this money was just waiting for this individual to hit a certain age or achieve a life goal determined by a will. In that case, this is a much more compelling situation. 

However, if this Redditor, as one commenter puts it, is waiting for a parent or grandparent to pass away and has been informed that this is how much they think they will get, these are, again, very different scenarios. 

Let’s assume for a moment that this money is guaranteed and that the $5 million is just sitting in an account waiting to be distributed. In this scenario, if the money is theirs and coming soon, then saving up for retirement is still something they should do, but they would not need to be as aggressive as they might otherwise need to be without an inheritance. 

On the other hand, if this money is currently “owned” by someone still alive and it will only transition to the Redditor upon a death, they should be full steam ahead with saving. It would be hard not to point out in big giant neon lights that inheritance money isn’t guaranteed. What if, in this scenario, a family member survives longer than expected and needs to use some of this money for long-term care. 

In a scenario like this, the Redditor has potentially wasted years without putting aside money and has allowed tens of thousands, if not hundreds of thousands, in compounded interest and earnings to pass by. The bottom line is that there doesn’t appear to be any guarantees with the inheritance money, so this Redditor shouldn’t act as if this money is a sure thing. 

What To Do Instead

Let’s assume for a second that you are 30 years old and haven’t started saving for retirement. Then you need to get moving fast. 

To get started, this individual needs to take a long, hard look at their budget and ensure they are cutting unnecessary expenses. They need to free up as much cash as possible to start contributing to a 401(k) with an employer or on their own. Suppose they are with an employer who offers employee matching. In that case, they also need to get aggressive with savings to take advantage of any matching the employer is doing, as this is essentially free money. 

Most importantly, they need to start today, not tomorrow or a week from now. A plan needs to start formulating, as there is plenty of catching up to do. Whether this means automating savings directly into an IRA or a 401(k) account, this individual should talk with a financial advisor and get a plan together to ensure they are in good retirement shape, with and without an inheritance. 

It doesn’t matter what this individual makes yearly, but they want to start saving today. While we don’t believe a spouse or children are in the picture, we have to imagine this might be a scenario down the road. So, you must ensure they care for themselves if something happens and the inheritance never appears or is far less money than anticipated. 

Reddit’s Response

Unsurprisingly, the response of the Reddit comment section was almost the same. The missing mention of how this inheritance is structured was a vital piece of information that isn’t here. Without it, nearly all of the comments universally agree that inheritance or not, saving for retirement shouldn’t only be a consideration but also something this original poster is already making progress on. 

Almost all Reddit commenters agree that this individual should not only be focused on saving for retirement but should also be as aggressive as possible. This thought comes on top of the idea that $5 million today won’t be worth the same $5 million in 10 years as buying power will go down. So, making money today and investing is an excellent idea for everyone involved in this Redditor’s future.