According to a set of recent studies, increasingly more people nearing retirement age are ill-prepared for it. Many are not even mindful of the true costs that lay ahead of them. As a result, the tradition of leaving a financial legacy for you children is quickly becoming a quaint custom of history.
No legacy is important
Any person born between 1946 and 1964 is known as one of the baby boomers. About 14 percent of boomer's parents say they will leave anything to their children after they die, so baby boomers should not be expecting any kind 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 parents 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 a hand.
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."
Increased expenses for a lifetime
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 back. That is probably a bad sign.
Underestimating cost of retirement
A second study from Allianz recently concluded that about a 3rd of transition baby boomers -- those between the ages of 55 and 65 -- were not even sure of how much they will have to accrue for retirement.
Allianz Life President and CEO Walter White wrote:
"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."
About 10 percent of those in the survey even thought about inflation when preparing for retirement. About 16 percent looked at taxes when it came to estimating for the future. People typically do not contain taxes or inflation.
Start early
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 away from leaving their job. Allianz suggests every person get a head start.
No legacy is important
Any person born between 1946 and 1964 is known as one of the baby boomers. About 14 percent of boomer's parents say they will leave anything to their children after they die, so baby boomers should not be expecting any kind 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 parents 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 a hand.
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."
Increased expenses for a lifetime
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 back. That is probably a bad sign.
Underestimating cost of retirement
A second study from Allianz recently concluded that about a 3rd of transition baby boomers -- those between the ages of 55 and 65 -- were not even sure of how much they will have to accrue for retirement.
Allianz Life President and CEO Walter White wrote:
"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."
About 10 percent of those in the survey even thought about inflation when preparing for retirement. About 16 percent looked at taxes when it came to estimating for the future. People typically do not contain taxes or inflation.
Start early
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 away from leaving their job. Allianz suggests every person get a head start.
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