If you run into some type of unexpected difficulty that is out of your control, there may not be much you can do about it on one level. However, if you take steps to prepare for unpleasant contingencies, the impact can be much less severe.
The above enters into the realm of retirement and estate planning.
Many people are still feeling the impact of the financial upheaval that the country experienced in 2007 and 2008. Of course, some were more prepared to absorb the blow than others.
If you are in a solid position, you can withstand the ebb and flow of market conditions. On the other hand, if you are in a very fragile position, the results could be devastating.
This economic downturn has decreased the inheritances that many baby boomers will be receiving. Between the period of time spanning from just before the beginning of the crisis to the middle of 2010, inheritances that were headed toward baby boomers went down in value by some 13% according to research done at Boston College.
In general, people seem to be prioritizing inheritance preservation less than they once did not only because of the hit that they took financially but because of the fact that they are living longer. Once you reach the age of 65, it is more likely than not that you will live to age 80 at minimum.
The “oldest old” is a term used to describe people who are at least 85. According to the Census Bureau, this group is growing faster than any other age group.
Clearly, if you live well into your 80’s, you will be spending money to pay your way for a very significant period of time after you retire. This will considerably reduce inheritances that you have to pass along to your heirs.
Advance planning is the key to optimizing your position.