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Inheritance Less Likely for Many Boomers

Whether or not you expect to receive an inheritance from your parents, this recent article holds some key insights into what it takes to make assets last a lifetime. Instead of receiving a retirement windfall from parents, many baby boomers are now spending their own assets to help parents financially in the later years of life. Some lessons can be learned here to make sure the cycle doesn’t repeat itself with you and your children. Read the article here.

Increased life expectancies due to medical advances and poor stock market performance have largely contributed to portfolio failure for the postwar generation. So if you were planning on some help from Mom and Dad for a secure retirement, those plans may need to change.

And if you plan to leave an inheritance for your kids, take proper steps now to make sure you don’t run out of money yourself. This isn’t exactly the most positive angle to approach the subject but serious planning requires realistic assumptions. The steps you’ll take to help your parents preserve wealth are identical to those you’ll take to preserve your own.

It’s time for some quick stats… the average 65 year old male has a 60% chance of living to age 80 and 40% chance of living to age 85. Women at age 65 have a 71% and 53% chance of reaching similar ages. So roughly half of all baby boomers can expect to live to at least the age of 85. That requires plenty of assets, and they must be used in the optimal manner, to last.

You can’t afford to make mistakes.

This article suggests several practical financial moves that will give you all the assurance possible that things will work out for any generation. Here’s a basic list…

Scrutinize your retirement budget and look for any ways possible to cut costs without sacrificing lifestyle.

Downsize to a smaller residence if possible. Although the real estate market makes this difficult it can work in certain cases.

Purchase an annuity to guarantee lifetime income. Steady paychecks allow much more flexibility and profitability with additional assets.

Consider using a reverse mortgage to tap assets held in your home. This should be carefully considered and done only when specific circumstances warrant it.

Use long-term care insurance to defray the cost of rising health care. Children with enough disposable cash can pay for it as a way to protect their own assets. My siblings and I have done this for our parents.

I’ve been in this business long enough to know that most of you are seeing nothing but expense right now. Proper planning and preparation can be expensive, but that’s only because of the many guarantees it offers.

My advice is to take one of the suggestions above and focus on that first. Add layers of protection over time as your plan develops. Once the worst case scenario is covered, you’ll have more financial freedom than you can imagine whether you are doing for your parents, yourselves or your children.

For additional advice or assistance regarding any of the above, feel free to call or email us at your convenience.

Have a great week!

Bryan J. Anderson
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