As the American job market changes, fewer people feel that they can rely upon a pension or work-related retirement account to provide for their needs after they retire. Social Security can help, but many Americans don't feel that it will prove to be sufficient for their needs, especially as the population lives longer. Partly as a result of these changes, many people in Washington and the rest of the nation are planning to live off an inheritance after they retire.
A recent poll undertaken by HSBC Bank found that 76 percent of Americans think an inheritance will fund all or part of their retirement. About 10 percent expect that an inheritance will fund all of their retirement. However, some of these Americans are bound to be disappointed: the same poll found that only 56 percent of Americans expect to leave an inheritance to their families.
Americans aren't the only ones who are relying upon inheritances. The poll surveyed 16,000 people in 15 different countries and found large percentages of people in many advanced nations who are expecting to live partly off their inheritances. However, the United States lags behind other nations in its percentage of nationals who expect to leave a sizeable inheritance. In Australia, for example, 69 percent of respondents to the poll said they expected to leave $502,000 or more.
If this survey is to be believed, Americans have a lot of work to do in preparing for retirement.
One way to get started is through long term care planning. As Americans live longer, they will require more health care later in life. A living will, including health care directives, can make a person's end-of-life wishes known.
Long term care planning and estate planning require thinking about some unpleasant truths. Still, there's a peace of mind that comes with preparing for the inevitable and ensuring that one's wishes are met and one's family is cared for.
Source: Bank Investment Consultant, "People Look to Inheritance to Fund Retirement," Margarida Correia, Jan. 2, 2013