Plenty of Canadians in their fifties are running two retirement plans at once. There is the one on paper, built from their own accounts. And there is the quieter one in their head that pencils in an inheritance from their parents.

The Globe and Mail put a blunt headline on the problem recently: your inheritance is cancelled, because mom and dad need the money for care. It is a hard sentence to read. But the reframe underneath it is not doom, it is clarity. An inheritance is a wonderful thing to receive. It is a dangerous thing to plan on.

The reason is simple. The money you were counting on is also the money your parents may need for their own later-life care. And in Canada, that care is not cheap.

Two plans, one fragile assumption

When someone tells me they are "fine" for retirement, and I dig into the numbers, I sometimes find the plan only works because a future lump sum is doing quiet heavy lifting. Take that lump sum out, and the plan wobbles.

That is the trap. An inheritance is not a guarantee. It is a possibility that depends on how long your parents live, how well their own savings hold up, and whether they need years of paid care near the end.

None of those variables are in your control. So the question is not "will I get an inheritance?" The question is "does my retirement work if I do not?"

The real math of later-life care in Canada

Here is why the estate so often shrinks. Later-life care is a recurring monthly cost, and it stacks up fast:

• Public long-term care accommodation is income-tested and runs roughly $2,000 to $3,000 a month depending on whether the room is standard, semi-private, or private.
• Private retirement residences are not income-tested. They commonly run about $4,000 to $8,000 or more a month, depending on the level of support.
• Around-the-clock home care, the option many families prefer, can run well into five figures a month once you are paying for full days of support.

These are planning ranges, not fixed quotes, and they vary by province and provider. But the direction is clear. A parent who needs three or four years of private care can spend well past $150,000, and often far more. That is exactly the six-figure estate an adult child might have penciled in.

This is not a story about anyone doing something wrong. Your parents using their own savings for their own care is the system working as intended. The planning lesson is just as calm: if the estate might be needed for care, your retirement cannot depend on it.

A modelled example: the same plan, run two ways

Let me make this concrete. Consider Dana, 55, single, planning to retire at 63 in Ontario. Her paid-off home aside, she has an RRSP of about $340,000, a TFSA of about $95,000, and a non-registered account of roughly $60,000. She plans to start CPP at 65. And in the back of her mind, she has always assumed an inheritance of about $350,000 from her mother.

We ran Dana's plan through Optiml twice, changing exactly one input. Everything else, meaning her spending target of about $60,000 a year after tax, a modelled 5% return, 2% inflation, and a planning horizon to 92, stayed identical.

• Plan A includes the inheritance, modelled as a lump sum arriving around age 68.
• Plan B sets the inheritance to $0, because it went to her mother's care.

Optiml sequences her RRSP, TFSA, and non-registered withdrawals to minimize lifetime taxes in both versions, then stress-tests each with the Success Score against 50 market scenarios drawn from over 50,000 generated return paths. Here is the modelled difference.

These figures are modelled illustrations based on Dana's assumptions, not a promise of any particular result. Change the returns, the timing, or the spending and the numbers move. But the shape of the answer is what matters.

Plan A looks comfortable. Plan B, the version where the money went to care, drops from a Success Score in the high eighties to the low seventies. Same person, same accounts, same lifestyle. The only difference is an assumption she was never in control of.

The plan that does not need the inheritance is the resilient one

Here is the encouraging part. A Success Score of about 72 is not a crisis. It is a signal, and it points at specific, fixable levers.

When we adjusted Plan B, a couple of modest moves brought Dana back into strong territory:

• Trimming her target lifestyle from about $60,000 to roughly $52,000 a year lifted her modelled score back into the high eighties.
• Alternatively, working two extra years to 65 did much the same thing, by shortening the drawdown and letting CPP and her accounts grow.

That is the whole point of running it without the inheritance. You find out, years ahead of time, exactly what it would take to be fine on your own. And if the inheritance does arrive, it is no longer load-bearing. It becomes upside: a stronger score, a larger estate, or a few more years of the lifestyle you actually want.

This is the same "floor you can count on" idea we wrote about for Canadians with little saved at 50. Build the floor first, then let anything extra lift you above it. You can read that one here.

What to actually do

Model your plan with the inheritance set to zero. This is the single most useful thing you can do this month. If the plan holds without it, you are free. If it does not, you have a clear list of adjustments and years of runway to make them.

Have the conversation with your parents. It is not about the money going to you. It is about understanding their care wishes and how they intend to fund them. That conversation is a gift to everyone, and it removes the guesswork from your own planning.

If you are likely to receive one, do not spend it before it is real. A future lump sum is not a current asset. Keep it out of the base plan until the day it actually lands.

The Bottom Line

You cannot control how long your parents live, what care they need, or what is left at the end. You can control whether your retirement depends on any of it.

With Optiml, you can run both versions side by side in Compare Plans, stress-test each with the Success Score, and see in minutes whether your retirement holds without the inheritance. Thousands of Canadians have used the platform to run more than 200,000 plans doing exactly this kind of what-if. Start with a free look in Optiml lite, or take the full toolset for a spin with a 14-day free trial.

An inheritance should never be the thing your retirement rests on. Build the plan that stands on its own, and let anything extra be exactly that: extra.