Tuesday, September 22, 2015

Most Cannot Afford To Leave Inheritance

By Cornelius Nunev


A couple of recent studies by Allianz point to the difficulty of retirement in today's poor economy. Most of those approaching retirement are not only unprepared, but often they have no realistic idea of how much cash they have to put away to retire. Consequently, their kids will likely not see an inheritance from their parents.

Not as many parents leaving cash

Anyone born between 1946 and 1964 is considered one of the baby boomers. About 14 percent of boomer's mothers and fathers say they will leave anything to their children after they die, so baby boomers should not be anticipating any type of 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."

Helping mothers and fathers out now

Instead, many elderly mothers and fathers are using every cent they accumulate to live the remainder of their own lives. Often, it even becomes up to their children to give them help.

Kay Kramer works at KLB Financial. Kramer 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."

Paying for medical

Right now, the average American's net worth is about $77,000, which was the same as it was 20 years back. The value of homes and other assets are dropping too with the tough economy, according to the Star Tribune. Retirement is becoming much more costly with increasing costs of medical care.

Underestimating price of retirement

Allianz did a study recently that showed a 3rd of transition seniors did not know how much they even required for retirement.

Walter White is the President and CEO of Allianz Life. He said:

"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."

When it comes 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 believed of inflation.

Best way to prepare

There were a lot of people who did not prepare early. In fact, 16 percent said they would wait until they were a year away from leaving the job to begin saving. Another 43 percent said that they did not consider retirement until they were five years from leaving their job. Allianz suggests everyone get a head start.




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