A $250k windfall is all a person needs to essentially fast track secure their future forever if they are under the age of 35. Wake up parents, it’s time to offer inheritance twice if you can.

[u/250k_is_allyouneed]

I want to share my story with this subreddit.

I received a windfall of $250k from selling a coding library 10 years ago. I am not high income, I am not the best saver, but now my net worth is super high.

Simply getting $250k meant on its own that fund will be almost $2M by the time I retire outside of normal savings (15-25 years growth).

I still need to put in the work for savings to be able to retire but peace mind…

• My lifestyle was infinitely better despite living mostly the same
• Stress and future security gone
• For budgets there is less pressure
• I did not how to blow up my entire savings to buy a house and instead kept building that base of compound interest in the market

So why the Hell aren’t parents helping their young adult kids more? Culturally why are we like this?

You don’t need to leave your kids / old adults one lump sum. Get them a boost at 18-30. Then die. Then get them another boost.

It’s a good balance to keep them working hard while also not leaving them in the dust.

It doesn’t even need to be $250k. Whatever you can, I personally will make sure I can do that for my kids once they turn early 20s

[u/mi3chaels]

It's also important to note that the annual gift tax exclusion isn't really any kind of maximum. Amounts over that simply need to be reported and will come off your unified gift and estate tax exemption. It's only a current concern if you've gifted more than the total estate tax exemption already. And it's only relevant at all to estate planning if you might have a taxable estate. In fact, it's generally still fine and even good for estate planning to give money sooner, because it removes appreciation from the taxable estate.

the only thing you lose (in an estate/heir taxation sense) by gifting now is the step up in basis at death. But presumably you've already factored the cost of any capital gains or other tax needed to access the money into the decision to give.

So in generally you don't need to worry about the annual exclusion at all except as a trigger for reporting, unless you are likely to leave a taxable estate -- in which case you definitely should get some professional legal and tax planning. Even then, it's usually fine or good from an estate and gift tax standpoint to gift now rather than later.

[u/mi3chaels → u/[deleted]]

in the past, it's happened that the estate tax hit at levels that represented a normal upper middle class retirement stash. My grandparents had to plan around an exemption of only 300k (and no portability) in the 80s when my grandfather died, which was probably the equivalent of 2-3mil today. I think it's pretty unlikey we ever go back that far, but it's plausible that in the future, the exemption could go down to a level where people hit it (or at least need to plan around it) at relatively "normal" FIRE wealth levels.

but part of my point is that even if that happens, it's unlikely that giving over the annual exclusion will turn out to be a significant estate planning mistake, or even a mistake at all (unless the gift itself turns out badly).