According to a couple of recent surveys, increasingly more people nearing retirement age are ill-prepared for it. Most are not even conscious of the true expenses that lay ahead of them. As a result, the tradition of leaving a financial legacy for you kids is rapidly becoming a quaint custom of history.
No legacy is essential
Allianz, a provider of life insurance, reported that most baby boomers -- those born roughly between 1946 and 1964 -- had better not wish for a fat inheritance as their retirement approaches. Times being what they are, only 14 percent of boomers' parents feel they can afford to leave their children an inheritance.
According to "Someday All This Will Be Yours" author Hendrik Hartog:
"Culturally, the idea of a legacy has disappeared for all but the very wealthy."
Kids give mothers and fathers support
Instead, many elderly parents are using every cent they accumulate to live the remainder of their own lives. Often, it even becomes up to their kids to give them a hand.
Kay Kramer of KLB Financial said:
"There's no question that 10 years ago people were expecting greater inheritances than they are now. With very few exceptions, people don't want to count on anything. And we've got some people who are actively helping parents out because they don't have enough."
Rising med costs
Because we live longer now, the expense of retirement is much higher than we might want it to be. Medical care expenses are increasing and the value of assets such as homes are decreasing. Right now, the average American is worth $77,000 in net worth, according to the Star Tribune, which is the same as it was 20 years ago. That is most likely a bad sign.
Not saving enough
Allianz did a study recently that showed a 3rd of transition baby boomers did not know how much they even required for retirement.
President and CEO of Allianz Life, Walter White, explained:
"It's alarming that so many boomers on the cusp of retirement are still unclear about the basic factors which determine their ability to fund their lifestyle once they stop working."
With regards to retirement, the biggest issue is that people do not factor in taxes or inflation. About 16 percent considered taxes in their estimate while only 10 percent imagined of inflation.
Formulations take too long
There were many people who did not prepare early. In fact, 16 percent said they would wait until they were a year from leaving the job to begin saving. Another 43 percent said that they did not consider retirement until they were five years away from leaving their job. Allianz suggests every person get a head start.
No legacy is essential
Allianz, a provider of life insurance, reported that most baby boomers -- those born roughly between 1946 and 1964 -- had better not wish for a fat inheritance as their retirement approaches. Times being what they are, only 14 percent of boomers' parents feel they can afford to leave their children an inheritance.
According to "Someday All This Will Be Yours" author Hendrik Hartog:
"Culturally, the idea of a legacy has disappeared for all but the very wealthy."
Kids give mothers and fathers support
Instead, many elderly parents are using every cent they accumulate to live the remainder of their own lives. Often, it even becomes up to their kids to give them a hand.
Kay Kramer of KLB Financial said:
"There's no question that 10 years ago people were expecting greater inheritances than they are now. With very few exceptions, people don't want to count on anything. And we've got some people who are actively helping parents out because they don't have enough."
Rising med costs
Because we live longer now, the expense of retirement is much higher than we might want it to be. Medical care expenses are increasing and the value of assets such as homes are decreasing. Right now, the average American is worth $77,000 in net worth, according to the Star Tribune, which is the same as it was 20 years ago. That is most likely a bad sign.
Not saving enough
Allianz did a study recently that showed a 3rd of transition baby boomers did not know how much they even required for retirement.
President and CEO of Allianz Life, Walter White, explained:
"It's alarming that so many boomers on the cusp of retirement are still unclear about the basic factors which determine their ability to fund their lifestyle once they stop working."
With regards to retirement, the biggest issue is that people do not factor in taxes or inflation. About 16 percent considered taxes in their estimate while only 10 percent imagined of inflation.
Formulations take too long
There were many people who did not prepare early. In fact, 16 percent said they would wait until they were a year from leaving the job to begin saving. Another 43 percent said that they did not consider retirement until they were five years away from leaving their job. Allianz suggests every person get a head start.
