In this episode of Business Matters, presented by Valley First, a division of First West Credit Union, host Rob Cupello is joined by Stacey Andersen from Valley First.

Andersen wants to clear up some common mistakes and misconceptions when it comes to gifting an inheritance to your child because while it’s important to think about how you’re going to handle your inheritances, some decisions can negatively impact your financial stability, especially during retirement. 

One mistake parents often make is indiscriminately giving away their money without a well-thought-out retirement plan. 

“We’re seeing parents having to refinance homes or get a secured line of credit, and it’s not so easy to qualify for those things when you are on retirement income,” says Andersen.

Another common assumption is that their home equity will serve as their primary retirement income source. Many people mistakenly believe they can downsize their house or tap into the home's equity when needed. 

“We’ll see people assume they can give away their liquid cash to their kids and they assume that their home is going to be the source of their retirement income,” explains

“But there’s so many rules in place now when it comes to borrowing money that just having equity in your home is in a lot of cases just not enough.”

To hear more about other common mistakes you should avoid and how you can build the best retirement plan with your financial advisor listen to the full episode.