Darcy Ungaro: 'Banking' on the death of Mum and Dad for your retirement?

Much of the financial advice you hear comes from older people. Photo / 123RF

People hate to bank on Mum and Dad's death - or at least admit they do.

If you knew though ... if you had absolute certainty, that one day your parents would die and leave you some money, why wouldn't it be reasonable to think about the financial implications?

Not everyone's in line for an inheritance I know, and for a lot of us, perhaps our parent's inability to take care of their own financial future will be our problem to deal with. It's a heavy burden, to be sandwiched between parents who may need financial assistance later on, and kids, who need assistance now.

Fortunate for some though, 'the olds' are actually an asset.

If that's you, and you have an inheritance coming down the pipeline at some stage, let me pose a few questions perhaps considered a bit taboo...

Why wouldn't you account for a financial windfall, especially a decent-sized one that could potentially wipe away all the mortgage debt you could ever accrue? How would you approach the purchase of your next family home, the renovations you're planning, or the purchase of a holiday home? How would that affect your attitude towards taking financial risk today?

It feels dirty even posing those questions, doesn't it? Is this because we're in a country that isn't great at talking about money? Is it because we're all supposed to suffer and do it the hard way? Are we too proud to accept a gift and make the most of it?

What if you knew for certain that you're getting ⅓ of an estate in 20 years' time, which is currently valued at $2m and mostly deployed in property? Would you prioritise mortgage-repayments over Disneyland with the kids if you knew mum and dad are going to clean up the mess when they're dead?

Although controversial, perhaps banking on the death of mum and dad is a valid financial strategy for you. It's not something you hear about though. This could in part, be because most financial advice comes from older people. That's right - it comes from people who found a strategy, often in hindsight, that may have worked well in their world but if applied today, may not work in the same way for you. There's wisdom in what they say don't get me wrong, but it's often mixed up with realities quickly fading away with time. Work hard at your job, be loyal to your employer and your bank, pay down debt as fast as you can, then save the rest to fund your retirement - which will be 'just fine' providing you live a stripped-down, decaffeinated version of your current life. Sound appealing to you?

I don't know about you, but being 'rich enough', isn't good enough for me. No, I'm not a greedy 'capitalist pig' - far from it - I'm just aware of demographics and how it's not in favour of me and my generation. We need to aim higher than what the older generation achieved - we need to assume that the future will not be more of the same or even an evolution of it. Government super won't be enough. The future will be qualitatively different from what it is now, so our thinking about how to prepare for it must change, and be influenced by new thinking.

Learning about Bitcoin, investing in 'real' assets like precious metals, and investing in property - Unless you're knee-deep in learning about things that the older generation is dismissive of, to a certain extent, you're doomed to experience the fruits of living in a world designed by dinosaurs.

New wealth in the new world will likely come from new thinking - taking an inheritance into account is just one of those things.

The left-over wealth from mum and dad could transform your family line for generations, so why wait until you receive it, to start growing a larger base of wealth and living a better life today?

Darcy Ungaro is a financial advisor based in Auckland who produces the NZ Everyday Investor podcast