You’ve received an inheritance, and suddenly that dream vacation, home renovation, or helping your family financially feels possible. But before you start spending, there’s one important question: How much of your inheritance can you actually spend without putting your retirement at risk?
In this episode of Savvy Women, Catherine Magaña and Rachel Ivanovich discuss how to enjoy your inheritance while protecting your long-term financial security.
Discover:
• Why the amount you inherit isn’t always the amount you can spend.
• How inherited IRAs, real estate, and taxes can impact your financial decisions.
• Three smart ways to divide your inheritance between retirement, personal enjoyment, and helping loved ones.
• Why one-time purchases and ongoing expenses can affect your retirement differently. • How to spend your inheritance without guilt or jeopardizing your financial future.
Can I Spend It? The answer depends on more than your bank balance!
Tune in to learn how thoughtful inheritance planning can help you enjoy your money today while protecting your retirement tomorrow.
Date Recorded: 10/22/26
Savvy Women Wealth Management is an SEC Registered Investment Advisor
The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
00:00:01:28 – 00:00:19:09
Catherine Magaña
You’ve received an inheritance and you might be thinking, I want to take that trip. I want to spend more money on my kids. I want to do that kitchen, bathroom, or some type of remodel in your home. But how much can you spend without putting your future at risk? And so it’s important to know when you get an inheritance.
00:00:19:16 – 00:00:37:09
Catherine Magaña
What’s the purpose. And we’re going to dive into that today. So here you are. You receive an inheritance. You feel absolutely grateful and thankful that you got this money. And it may represent years of love and hard work from a family member. And so you then look at, okay, how do I give myself permission to spend some of this?
00:00:37:12 – 00:00:58:00
Catherine Magaña
But before you do that, you should really look at kind of what what is your future look like and where does this money fit in. And so I’m Kathryn Magana here with Rachel Evanovich on Today’s Savvy series. And we’re going to take a look at what you can use, what your future may require, and how to make room for spending and giving in a meaningful way.
00:00:58:03 – 00:01:15:04
Rachel Ivanovich
So the first question is looking at what is actually available, because the total value of the inheritance and the amount that you can use might be different. So think about it. You might inherit cash. You might have investment accounts. There might be a retirement account. It might be real estate. Or maybe there’s a combination. All of that.
00:01:15:07 – 00:01:38:28
Rachel Ivanovich
And each of these needs its own review. So think about it. If you inherit real estate or a house, oftentimes it comes with does it need a new roof? Does it need a new Hvac? You really need to think about the expenses, property taxes, insurance. And can you actually afford that? And am I going to sell it or am I going to keep it and maybe rent it in a retirement account has its own withdrawal rules, depending if you were the spouse or non spouse.
00:01:38:28 – 00:01:59:20
Rachel Ivanovich
And you really need to think about the tax considerations with that. And so before making a commitment, you really want to look at what are the tax implications. What are the costs of having that asset or inheritance. What are any restrictions that might apply. And maybe there’s some unresolved estate matters. But and believe me, I helped with an estate and it was a little bit tricky.
00:01:59:22 – 00:02:20:13
Rachel Ivanovich
So then you need to ask what was settled, what’s what’s still pending, and what are some deadlines that you might have that require attention? And so you can look at the account statements that will show the balances. But you may not know exactly what’s available, at that time. So you really need to be looking at what type of assets you’ve inherited alongside the amount.
00:02:20:15 – 00:02:28:03
Catherine Magaña
Well, it’s interesting, we’ve shared in the past, you know, and there’s different rules. I mean, if it’s a retirement account versus taxable and retirement accounts have their own set of.
00:02:28:03 – 00:02:30:19
Rachel Ivanovich
Rules and some things get a stepped up and said, oh yeah.
00:02:30:21 – 00:02:32:10
Catherine Magaña
So there’s a lot of a lot of moving parts.
00:02:32:11 – 00:02:35:22
Rachel Ivanovich
Yeah. So gather the statements and documents and meet with your professional.
00:02:35:23 – 00:03:02:24
Catherine Magaña
Exactly. So next you ask what your retirement needs from this inheritance. So would, putting some of this money towards retirement help. You would, putting some of this money some to some projects help you. And so before you start spending, it’s really important to look at what is your retirement and financial plan before the inheritance. Look at your social security, your pension, your income, your investments.
00:03:02:27 – 00:03:22:03
Catherine Magaña
Are you getting projected income from your investments? And is that projected income from taxable or IRA investments? Look at your bills. So look at your expenses. Get out. Do a deep dive of what are you currently spending. And then also look at, you know, what do you expect to spend in retirement. What your what any of your real estate be paid off by then.
00:03:22:06 – 00:03:40:09
Catherine Magaña
Or do you plan to travel more. And so all those variables need to be considered. And so then you have to look at okay, if I get this money, am I going to continue to work or am I going to retire a little earlier? Am I going to help family? Is there a big trip or, you know, what is it that that you want to accomplish?
00:03:40:11 – 00:04:06:09
Catherine Magaña
And so once again, you have to consider, do I have enough with just my own money and with this money added in, what changes and how does that enhance your plan? And so instead of just spending, you have to be, you know, once again, you can have a goal and say it’s okay to do certain things, but have a plan and make sure if it’s in line with your overall retirement and financial plan, because once again, if you spend the money, all the money now, then that reduces your access to it later.
00:04:06:09 – 00:04:28:27
Catherine Magaña
And that might be money you need for long term care retirement. And then you can also potentially if there’s extra money, leave it to your estate. So while, what we find is sometimes inheritances do cover some of the income gaps, that some clients are that we work with. So it is important to look once again, what kind of inheritance did you get and how does that apply to your overall financial, retirement plan?
00:04:29:04 – 00:04:33:11
Rachel Ivanovich
As a as an accountant, I love to think of things as having their specific buckets.
00:04:33:13 – 00:04:34:03
Catherine Magaña
So what is this?
00:04:34:03 – 00:04:52:00
Rachel Ivanovich
Yeah. So maybe you want to give your money three different purposes or buckets. So it’s one way to organize your priorities. So maybe you’re saying okay I need to support my future. I need to or want to enjoy my life, but I also want to help others. So supporting your future might mean identifying the resources that you need for retirement.
00:04:52:03 – 00:05:04:23
Rachel Ivanovich
Any significant, significant expenses you may have, and of course, financial flexibility. And this is the portion that you may be relying on for the years ahead. And then of course, you want to have fun, right.
00:05:04:23 – 00:05:07:03
Catherine Magaña
And so life enjoy life to enjoy life.
00:05:07:03 – 00:05:25:11
Rachel Ivanovich
So that could be a trip. That could be maybe a hobby home improvement that helps make your life or feel better. So name what matters to you and, you know, estimate what that might cost. And then of course, helping others makes us feel good. And so that’s kind of the third bucket. And it could be family support.
00:05:25:11 – 00:05:49:15
Rachel Ivanovich
Maybe you’re helping someone with college, maybe there’s a charity that you really love and that you want to help. And maybe there’s a legacy goal that you want that you have in mind. So consider really who you want to help and why and whether the support is intended to happen right now or continue on into the future. And these purposes really help us, you know, having those three buckets, support your future and enjoy your life, help others.
00:05:49:17 – 00:06:14:08
Rachel Ivanovich
It helps you think through your decisions. And they don’t require dividing the inheritance equally and just saying, okay, I have 100,000 and everybody gets 33. But it really gives you this way to think through your decisions. And there’s no universal percentage or any right answer. It’s really just what’s important to me. And do I have enough money for my future and what do I want to do in my life?
00:06:14:11 – 00:06:39:12
Catherine Magaña
So another important question is whether the decision creates an ongoing commitment or is it a one time commitment. So once again, you may decide to do one family trip and it’s a special trip or reunion. It’s one defined cost or, versus you’re looking at maybe ongoing travel and increasing your travel. So those have two different elements in your overall financial plan and making sure that you have enough to support that.
00:06:39:14 – 00:06:59:06
Catherine Magaña
Another thing that comes up occasionally is potentially maybe a second home or an investment property. Now, a second home does have costs associated obviously not only buying the property, but you have your property taxes, insurance, the maintenance, utilities, and then that second home. Are you renting it out or not? Or you just have it as a second home.
00:06:59:08 – 00:07:26:20
Catherine Magaña
And so that really affects, your overall plan of and, and cash flow needs of what you need to spend on a monthly basis. So while a second home might sound enticing, the reality is, perhaps maybe even go travel or spend some time there and visit is another option that you can do. And then there’s, the distinction between am I helping a family member one time or is it ongoing support with bills and continuing support.
00:07:26:20 – 00:07:47:19
Catherine Magaña
So those are two different things. A one time, you know, this is a one time gift. And then the other is ongoing expenses that you need to factor in. And then you have to look at, well, this decision, is it just a one year or is it multiple years? And it doesn’t mean you can’t do have multiple goals or years that you want to do things, but you really need to account for that.
00:07:47:19 – 00:07:50:27
Catherine Magaña
And once again, is an ongoing commitment or just a defined commitment.
00:07:51:00 – 00:07:52:23
Rachel Ivanovich
And family request can be really tricky.
00:07:52:26 – 00:07:53:21
Catherine Magaña
Yeah. Yes. Yeah.
00:07:53:21 – 00:08:11:28
Rachel Ivanovich
Because you may feel that it that you have to help out, but you also need to consider do you need the money for your own future and you maybe even feel guilty spending money on yourself. So and maybe the person that that saved the money all those years and left the money to you was very careful with their money, was very frugal.
00:08:12:00 – 00:08:31:19
Rachel Ivanovich
So it feels weird actually spending that money. So you really need to separate the financial questions and, you know, from your emotions and, and really look at, you know, what do I need for my future? How can I help other people? And, you know, honoring a loved one can include using the money to support your own future.
00:08:31:19 – 00:08:55:05
Rachel Ivanovich
They maybe that’s why they saved the money. Was really to help you and and support you. And I think it’s really important to have boundaries. And one very useful boundary is if somebody asks you from your family, I’m still working through how this money is going to fit into my plan, and I really want to help you, but I need to look through my my whole plan, and maybe that will help give them some guidance for their own future.
00:08:55:05 – 00:09:09:28
Rachel Ivanovich
As well as that, looking at how you’re being responsible with your money before you just make a quick decision. And you know, once you know what you can offer, you know, really be clear about the amount. And is it a one time gift or is it going to be ongoing? But I think it’s really important to have those clear boundaries.
00:09:09:29 – 00:09:34:01
Catherine Magaña
Exactly. So let’s walk through an example. So a woman nearing retirement receives an inheritance and wants to take a special trip. And help an adult child with a home purchase. So in the first situation, her existing income and savings does not support her expected retirement spending and the inheritance needs to fill the gap for future expenses and income.
00:09:34:04 – 00:09:51:23
Catherine Magaña
So before funding the trip or gift, she really needs to evaluate how much she can and what does that how does that impact her overall plan? So she make the center consider a smaller gift or the timing. And then we’re not saying you can’t you can’t gift. But what we’re saying is make sure you take care of you.
00:09:51:26 – 00:10:16:07
Catherine Magaña
And there could potentially be more left over, which is the whole planning idea. Because things happen, people are living longer. People are living until 95, 100. We’re also seeing the level of care changes as you get into the final phases of life. Potentially there might be some in home care or nursing home. And so while it’s nice to have money and you want to spend it now, the reality is you may need it later.
00:10:16:07 – 00:10:33:08
Catherine Magaña
And then also you have you can always gift, to family members later. Now, we’re not saying never not to do a little trip or do something, but the reality is the bigger gifts do you have to be very mindful and careful? So now imagine that she receives the same inheritance, but her existing resources already cover her.
00:10:33:09 – 00:10:53:11
Catherine Magaña
You know she has enough to cover her own retirement. She has enough to cover all of her future spending. And if that’s the case, and that kind of changes the story a little bit. So now we have enough to cover her ongoing expenses. And now there’s an if any legacy. So now there could be some flexibility to go ahead and do a trip or do a gift or do other expenses.
00:10:53:13 – 00:11:15:15
Catherine Magaña
And so, it’s interesting because I, we’ve worked with clients over the years, and usually when there’s that big lump sum of money, there is typically that I want to go buy something or do something big. For most people, however, I did have a woman, that we worked with many years ago, and unfortunately, both of her parents passed away back to back, and she inherited money that she wasn’t expecting.
00:11:15:15 – 00:11:37:03
Catherine Magaña
It was life changing for her, and she was very mindful. She says, I don’t I want this money to last and I’m going to. She did a small trip, which was manageable, but she really wanted this money to work and last for her life. Unfortunately, she got ill and it passing away fairly young. And so here what she did the right things like she did the little bit of a trip she had enough to live.
00:11:37:03 – 00:12:00:05
Catherine Magaña
But then the reality is unfortunately based on her health, on health conditions. So things happen. But I think, you know, she’s knowing that she did what was right. And that’s once again, why we also want you to live life and enjoy life as much as you can as well. And so before deciding on how to spend your hesitance once again, how does it affect your current financial and retirement plan and your investments?
00:12:00:08 – 00:12:21:13
Catherine Magaña
And once again, keep kind of in your mind or view, how is it going to support your future? How are you going? Enjoy your life and help others. And so while we, share examples and, and and go through this with you today, we are available. If you would like a strategy, call with us. You can reach us at 760692 5700.
00:12:21:16 – 00:12:29:04
Catherine Magaña
And we want to thank you today for getting savvy with us, with your finances. And remember to savvy up.
00:12:29:06 – 00:12:53:27
Please stay tuned for important disclosures. The opinions expressed in this program are for general informational purposes only, and are not intended to provide specific advice or recommendations for any individual or any specific security. It is only intended to provide education about the financial industry, to determine which investments may be appropriate for you, consult your financial advisor prior to investing.
00:12:54:00 – 00:13:16:19
Any past performance discussed during this program is no guarantee of future results, and the indices referenced for comparison are unmanaged and cannot be invested into directly. As always, please remember investing involves risk and possible loss of principal capital. Please seek advice from a licensed, professional savvy woman. Wealth management is a registered investment advisor with the SEC.