According to a pair of recent studies, more and more people nearing retirement age are ill-prepared for it. Many are not even aware of the true costs that lay ahead of them. As a result, the tradition of leaving a financial legacy for you children is swiftly becoming a quaint custom of history.
Seniors not leaving something behind
Allianz, a provider of life insurance, reported that most baby boomers -- those born approximately 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 kids an inheritance.
Hendrik Hartog, author of "Someday All This Will Be Yours," wrote:
"Culturally, the idea of a legacy has disappeared for all but the very wealthy."
Helping parents 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 kids 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
As the average lifespan lengthens and the cost of medical care increases, the price of retirement is likewise escalating. In addition, the value of homes and other assets has taken enormous hits in the tough economy. According to the Star Tribune, the average American's net worth today is only $77,000. That is about the same as it was 20 years back.
Underestimating expense of retirement
Those from 55 to 65 did not even know how much money they should be saving for retirement, according to an Allianz study.
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."
Most have also not properly factored inflation and taxes into their estimated retirement needs, says Allianz. According to its report, only 10 percent of those surveyed identified inflation as a concern in preparing for retirement. Likewise, only 16 percent mentioned taxes in estimating future needs.
Begin as early as possible
There were lots of people who did not prepare early. In fact, 16 percent said they would wait until they were a year from leaving the job to start saving. Another 43 percent said that they did not consider retirement until they were five years from leaving their job. Allianz suggests everybody get a head start.
Seniors not leaving something behind
Allianz, a provider of life insurance, reported that most baby boomers -- those born approximately 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 kids an inheritance.
Hendrik Hartog, author of "Someday All This Will Be Yours," wrote:
"Culturally, the idea of a legacy has disappeared for all but the very wealthy."
Helping parents 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 kids 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
As the average lifespan lengthens and the cost of medical care increases, the price of retirement is likewise escalating. In addition, the value of homes and other assets has taken enormous hits in the tough economy. According to the Star Tribune, the average American's net worth today is only $77,000. That is about the same as it was 20 years back.
Underestimating expense of retirement
Those from 55 to 65 did not even know how much money they should be saving for retirement, according to an Allianz study.
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."
Most have also not properly factored inflation and taxes into their estimated retirement needs, says Allianz. According to its report, only 10 percent of those surveyed identified inflation as a concern in preparing for retirement. Likewise, only 16 percent mentioned taxes in estimating future needs.
Begin as early as possible
There were lots of people who did not prepare early. In fact, 16 percent said they would wait until they were a year from leaving the job to start saving. Another 43 percent said that they did not consider retirement until they were five years from leaving their job. Allianz suggests everybody get a head start.
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