It didn’t as far as I know. We inherited from an irrevocable trust a little over a year ago and didn’t get the step up. Had to pay capital gains tax on it. Thinking a bit more why this became news, I am guessing IRS made it clear newly what had always been the case. This goes to show you the quality of news we are getting these days.
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Anyone on this thread a long time may know this thread was ‘restarted’ due to the length. Restart Nov 2020. My good personal friend actually originated this thread while in her 50’s. I came into college confidential participation and other social media after I came out of aggressive cancer treatments (my older DD started college in 2012, and I was diagnosed at the start of her 10th grade).
People IMHO keep conversing on this thread, and thread gaining newer participants, because these questions are ongoing - be it someone in their 40’s or 50’s who are maybe concentrating more on structuring their savings and assets for their retirement years (and also career and cash flow), to those approaching and in retirement. When one is considering relocating in retirement, they have to ask “do I have enough money to live in that new location?” Other life occurrences beyond one’s choice has one reviewing their assets and how to move forward. “Do I have enough…” is an ongoing question.
Some people handle life transitions easier than others, and it may have to do with health issues, death of spouse, ‘gray’ divorce, new marriage, or things like where children/grandchildren live. I have been wrestling with a change recently as our DD1/SIL/family are now moving from 100 miles away (DD1 has lived in this city for 11 years continually - city where she left for college at 18) to over 1,000 miles away. The youngest grandchild (of 4) is only 3 weeks old. However almost at the same time, DD2’s BF of 4 years is living with us (since June) due to his career opportunities in our area (and we are happy he is with us - he can also pay down school debt, other debt with savings on living expenses) - and we have almost certainty that as soon as he can get the career job in DD2’s city (where they have planned to live when both lived in another city), they will be married (be it in the 1 - 3 year time frame). DD2 has been patient.
People with more kids certainly handle things differently, and many with two kids handle things differently too. Of course we have had a lot more involvement with the grandkids’ lives than adult children - and we handle things differently than our parents did on certain expectations that our parents had that we don’t have (like having the offspring use their vacation or holiday time traveling to the parents – especially pressure from DH’s parents). We want our DDs/family to come when they want to come (and often their trips are tied to events with their friends who live in our area).
QOL - how we handle our time and money. Some have no plans or goals to provide for future generation(s), while we do to a certain extent. Still figuring out ‘estate planning’.
On the topic of “how much.” This is how much apparently it takes to feel financially secure and “rich”:
https://www.cnn.com/2023/07/06/success/how-much-to-feel-rich/index.html
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Based on that article, I feel poorer!!!
I do wonder these days what people here think how much is enough to retire after we have gone through Covid years and inflation.
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I wonder if retirement savings is a bit like affordable house. I used to say that many people though the ultimate house was the one 150% price for the one they could afford. (Example - if you are looking at $300K homes you qualify for, it’s the $450k places that look really appealing.)
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It would take a lot of assets to generate the levels of income in that article. Are those pre-tax levels of income?
Likewise, I kinda doubt most people’s nest eggs would allow for that kind of income/withdrawals during retirement. I know ours wouldn’t last enough years. Especially at the rich level!
I think people were answering that question based on working income, the amount they feel they’d have to make while working to feel secure or rich, not what they expect to draw off in retirement. For example, our high(er) working incomes enabled us to build a nest egg for a comfortable retirement, but we need nowhere near that income to live well now. We just needed those incomes for the investment years to fund the lifestyle we wished to retire on. We are “rich” now on a lot less than what was needed to build the pile.
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The surveyed $233k per year to feel financially secure could still qualify for financial aid at some colleges, so is that less than what posters self-describe as “middle class” on these forums?
I like the article because it does break out some of the reasons people do not feel financially secure today. Bankrate doesn’t indicate age brackets on respondents, income levels, nor participation levels per age brackets. However the answer on not feeling financial secure now (72%) but feel they will be some day (46%) to me indicates a younger data group who is ‘climbing the ladder’ with career/income - also with only 33% saying low pay or low career mobility is an issue now. Also not geographic breakdown - to me it makes a big difference if you are in an area where it takes a much bigger income for housing, taxes.
DH and I feel financially secure - but that could change with a catastrophic illness, injury, death or disability of DD1 (who is the primary breadwinner for 4 very young children). We would do what we had to do with our time and financial resources to try to have Gkids raised as well as our DDs. Covered with disability and some life insurance.
The financial crisis of 2008/2009 did delay some people retiring, and some may even have gone to some PT work after fully retiring because they realized they are not secure enough financially in retirement.
Or, does it include RMD’s as ‘income’?
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It was a small survey (2500 adults), and I didn’t see mention of who they targeted. I am guessing it was an attempt at cross-section of incomes/ages, mostly working some retired.
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I think that people view those incomes as comfortable income for working years. Income that they feel will allow them to live a particular way now + save for the future.
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Of course, that $233k per year is the 91st percentile of household income… so does that mean that the vast majority of people in the US feel that they are not financially secure (or “feel poor”)?
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$233k is an average. ~Half of surveyed people said under $100k was enough. Only a small minority said they needed $233k. Specific numbers are below. I am excluding the 11% who answered “don’t know” in the totals below.
What annual income would you need to feel financially secure/comfortable?
49.4% – Under $100k
17% – $100k to $150k
21% – $150k to $500k
4.5% – $500k to $1M
8% – Over $1M
Median ~= $100k
Average = $233k
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Thanks for the breakdown, those numbers make a lot more sense.
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I think it comes down to the disease of more.
Once you’ve attained something, there is always that want for more.
I think that want, for some, may be tempered as we age as content with what we have.
But for some, there is always that need for more. The feeling that no matter how much there is, if only they had more, they would be content. Or financially secure. Even when they are financially secure.
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Yes, I ascribe those “needing” >500k to families living in very cost of living areas with kids in private school and maybe country club memberships. They need at least as much as they’re already making to feel financially secure otherwise they’d have to give up things they’re used to.
I don’t think it’s necessarily a privileged or out of touch response - it would depend on how the question was worded. If the question was really phrased as “financially secure” then needing to give up things you’re used to would necessarily mean you’re no longer financially secure in the lifestyle you’re currently living. Plus if you’re making 500k/yr and spending most of it, then you’d probably like to be making more in order to guarantee 500k/yr in retirement income.
What’s interesting to me and reflective of the growing wealth gap in society as a whole is how much the top 15% of responses throws off the entire average. The wealth/income disparity between the bottom 50% and the top 15% is astronomical. That’s not even counting the top 0.1% who I’m sure were not polled - they probably would’ve had responses in the tens of millions.
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I agree with this. After all, coffins don’t have drawers.
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I have shared this several times over the years, but it speaks to contentment and how much is enough:
Want what you have and you will always have what you want.
I already own what’s truly important – faith, health, family, food enough, shelter enough, and a food processor. Contentedness is a condition that most people can attain; contentment is not a place we get to, but a state of mind. By closing my eyes to advertisers and my ears to the toy talk of my peers, I can avoid wanting things I’ve lived happily without all my life. Desire is the root of discontentment. Those who don’t see that they already have enough are unlikely to see it later when they have more. Without a philosophy like this one, the capacity to spend will grow as fast as the capacity to earn.
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Question for the financially savvy folks here, and apologies for a dumb question: Currently the inheritance tax exemption is $12.84M per person/$25.84M per couple. Anyone have any thought on what will happen in a few years when the law is supposed to sunset? When both spouses croak, as it currently stands, do the kids getting the inheritance benefit from the $25.84M exemption?