Monthly Archives: May 2016

The State of Retirement in the U.S.

Are Americans’ retirements looking dismal or promising? Depends on whom you ask. But one thing is for sure: retirement data doesn’t lie. In fact, we’ve gathered some of the most current statistics on the state of retirement in the U.S. so you can form your own opinion.

State of Retirement in U.S. Infographic

Retirement Savings in U.S. Households

  •      One-third of Americans have no retirement savings or pension. This includes 27 percent of the age 60 and older population.1 
  •      Women are 27 percent more likely than men to have zero retirement savings.2
  •      23 percent of Americans have saved less than $10,000.2
  •      Nearly half of Gen Xers have saved more than $10,000 for retirement. Over a quarter have managed to put away $100,000.2

Attitudes about Retiring in America

  •      49 percent of adults with self-directed retirement accounts are “not confident” or only “slightly confident” in their ability to make the right investment decisions.1
  •      43 percent of Americans have put some thought into what their retirement will look like, but only 19 percent have a definite idea.3
  •      57 percent do not know how much they will need to fund their ideal retirement lifestyle.3
  •      44 percent do not know when they will retire (but that leaves 56 percent who do).3

One last thought on retirement in the U.S.:

Fifty-two percent of Americans who do not seek out advice about investment decisions say they either cannot afford assistance or would like help but do not know where to get it.1

If you need help with retirement planning or know someone who does, please reach out to our team. We are here to help.

1 Federal Reserve

2 GoBankingRates

3 BMO Harris

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

What to Do about the $1 Trillion Inheritance

inherited-bag-of-money

An estimated $1 trillion of inherited assets will be transferred to next-generation inheritors per year for the next 50 years, according to various studies.

This is anticipated to be the greatest wealth transfer in history, as funds move from baby boomers to Gen X to millennials.

If you happen to fall into the category of high-net worth individuals with an estate plan, then you  may be feeling a little nervous about how your beneficiaries will manage the inheritance – or if they will at all. You are not alone.

Fortunately, there is a solution to getting some financial confidence when it comes to the transfer of your hard-earned dollars: introduce your children to your financial advisor.

Inherit Money, Inherit Trust

While you have likely worked with your financial advisor or wealth manager for many years, your children may not have the same relationship. You trust your financial team, but unless your heirs have developed the same connections they may not maintain the relationship once they inherit your fortune. By introducing your children to your team of advisors now, you increase the chances of your money being managed by people you trust and who can make decisions in the best interests of your family.

Wondering how to make the introduction? Enlist your financial team to set up a 529 college plan for your children or grandchildren, get them involved when your children are buying their first home, or invite them to attend a meeting with your financial or wealth advisor.

For more ideas on building wealth or managing inheritances, head over to the wealth management section.

 

– The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Estate Planning: Do You Need Survivorship Insurance?

Survivorship insurance is a valuable tool in the estate planning process. Whether you already have an estate plan, or want to put one in place, you may want to consider adding this insurance – and here’s why.

Woman Survivor – Insuring Your Estate Plan

What is survivorship insurance?

Unlike traditional life insurance plans where the surviving spouse receives the benefits, survivorship insurance only pays out once the remaining spouse passes. This is why it also goes by the name second-to-die insurance.

Why do high-net worth clients purchase it?

Generally, clients purchase second-to-die insurance because it helps the heirs cover estate taxes incurred from the inheritance. If you own a business, it can also create liquidity so the heirs don’t have to sell the business unnecessarily.

The IRS increased the estate tax exemption for 2016 to $5.45 million per individual, $10.9 million per married couple. So if the second spouse passes and leaves $10.9 million or less in inheritance, the heirs will not owe any estate tax (in 2016, at least). However, if the couple has more than $10.9 million in assets, then the beneficiaries may owe estate taxes on the remaining amount – up to a 40 percent tax rate.

Survivorship insurance helps cover the cost of estate taxes, so heirs keep more of the inheritance.

What if you own a business?

Many clients with estate plans enroll in this insurance to protect their family business once they pass. Instead of heirs having to sell the business or other assets in order to cover estate taxes, survivorship insurance covers the taxes and the business stays in tact.

If you own a business and only some of your children want to continue it after you pass, then second-to-die insurance can also help you split your inheritance evenly between children and preserve the business for those who are involved with it.

It’s important to note that estate tax exemptions fluctuate per inflation, so amounts may change from year to year.

As with any insurance, we recommend speaking with your insurance agent and estate planning professional before enrolling. You want to make sure you understand all tax provisions, as well as liabilities, before making a decision.

For help with estate planning and related insurance products, head over to our section on wealth management services.

 

– The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.