Million Dollar Lottery: Sharing or Stashing?
r rImagine you found a million dollars on the street. Would you share it with your family, or keep it for yourself to secure your future? This article explores the ethical and practical considerations that individuals might face in such a scenario.
r rThe Ethical Dilemma
r rSome argue that finding such a windfall should be given to those in most need, particularly when families are in dire straits. For instance, Elon Musk and the Catholic Church have highlighted the concerns about population growth and resources. Would such a large sum be better used to help young mothers or meet broader societal needs? Or, should the individual prioritize their own retirement security and that of their immediate family?
r rPersonal Considerations
r rLet's delve into the intricacies of a specific scenario. If given one million dollars, what would you do with it? Would you share it with your family, and if so, how do you decide who should receive what portion?
r rPersonal finance expert Jonathan usually keeps a significant portion of the money to secure his retirement. With a 50% federal tax and 10% state tax, he would place at least 50% into retirement accounts. This leaves him with relatively less available for other purposes.
r rFamily Dynamics
r rThe question of who to help becomes complex, as Jonathan has a diverse family structure. He includes his mother, stepfather, three siblings, their spouses, and his wife's siblings, all expecting a share. This amounts to 11 people in total, excluding nieces and nephews. But even with them included, the number of recipients would add up to 23 people.
r rJonathan identifies several factors in determining who needs assistance:
r r r Income levels among family members, many of whom are doing well.r Who needs the income - distinguishing between those who are in need and those who can manage on their own.r Fairness in treatment - ensuring that every family member feels valued and treated fairly.r Retirement goals of the decision-makers.r r rJudging by Jonathan's family dynamics, he may only consider helping his mom and stepfather, as they have a fixed income. However, he acknowledges that this decision could impact their ability to retire comfortably, and his primary focus is on ensuring that he and his wife meet their retirement goals together.
r rFinancial Planning and Inheritance
r rJonathan and his wife have already prepared for the inevitable. They have a will and a living will, which they update periodically to reflect changes in family dynamics and financial status. Currently, they are primary beneficiaries on their wills, financial accounts, 401(k)s, IRAs, and life insurance policies. Their youngest siblings are the secondary beneficiaries, splitting their estate 50/50 in case both Jonathan and his wife pass away.
r rJonathan notes that certain family members have already secured their financial futures, making it less urgent to share the windfall. For example, a niece with consistent retirement investments and a nephew already well on his way in a high-paying career may not significantly benefit from an inheritance.
r rConclusion
r rThe decision to share or stash a million dollars is deeply personal and complex. Ethical, practical, and family-orientated considerations guide the choices. Jonathan has chosen to prioritize his and his wife's retirement security, with a secondary consideration for immediate family, while ensuring that his own financial well-being remains a top priority.
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