In a recent article from Bank Investment Consultant, Editor Margarida Correia suggests that large amounts of working-age people are hoping to live off an inheritance when they retire. According to Correia’s data, 76 percent of Americans expecting an inheritance will use it to partially fund their retirement. Of those Americans expecting an inheritance, 10 percent of those expectants foresee it fully funding their retirement.
The key word in this equation is “hoping”.
Although an inheritance may be a feasible source of retirement funding for some, it is not a realistic option for many. The reasoning behind this doubt is the many variables that can arise with anticipating an inheritance, which makes it a risky venture to put all your faith into.
With people living into their nineties and having children later in life, it’ll be quite some time before those children see their inheritance, if they receive any at all. The unpredictable events that happen later in life, which may require large portions of the heir’s savings to remedy these issues, are also a cause for concern when relying upon an inheritance.
As the old adage goes, don’t put all your eggs in one basket.
That’s why it is critical to make wise decisions about your retirement so that you and your family can support the lifestyle you’ve been counting on. With proper planning, both current and future retirees can benefit from a fiscally stable future if they build in Fixed Payout Annuities (“FPA”) into the retirement mix. An FPA can provide Guaranteed Income for life for both generations. And by controlling the type of beneficiary protection elected for each Annuity, an FPA has the ability to shift resources from one generation to the next.
Although it is an unlikely occurrence, a conversation between the generations would greatly improve the retirement outcomes for both of them. A little bit of retirement planning can go a long way.