Legacy Issues

Sixty-three percent of surveyed affluent adult children between the ages of 18 and 22 say they’ll need to rely on their inheritance for financial security during retirement. Before the inevitable groan about the entitlement of youth, bear in mind that today’s young adults do have different financial challenges than in past generations.1

It used to be that you started out at zero and earned your way throughout life. Today, younger generations often start out their adult lives already in the red due to student loans. Then, tack on the need to save more than previous generations in light of increased life expectancy and other competing priorities — for example, more reliance on self-directed retirement plans instead of employer-sponsored pensions.2

Another factor making this a prevalent issue is many young adults graduated and entered the workforce between 2000 and 2012. These individuals set out in the world to start their careers during a challenging historical timeframe — the burst of the early internet bubble, 9/11, a freefall decline in the real estate market and, of course, let’s not forget the “Great Recession.”3

It’s also worth mentioning that while inflation rates have remained low throughout the last several years, the relationship between wage growth and inflation has been historically low. In other words, wages are not keeping up with even the current low inflation rate.4

For many people, their children’s well-being is a major concern, even if they are grown and have left the nest. If you’d like to explore ways to leverage your current assets to secure both your financial future as well as a legacy, please give us a call.

Some investors have devoted significant amounts of time, energy and resources into accumulating an impressive and valuable art collection. However, heirs may not share this passion or expertise and consequently may not know what to do with an inherited collection. Wealth strategists generally suggest the beneficiary sell the collection or donate it to a charitable organization, such as a museum. However, there are significant factors involved in determining which and when the right strategy should be deployed, underscoring the importance of working with a qualified financial advisor.5

Estate planning can be a difficult process as it requires contemplating one’s death — and how life goes on without you. However, every household with humble savings, significant wealth and everything in between should consider planning as early as possible for asset transfer strategies in order to minimize excess taxes and estate settlement fees.6

When examining your own portfolio, consider your investments and where they’re located. One consideration to be made with wealth is that it offers the luxury of investing in a variety of interesting opportunities. While on the one hand this level of diversification may be appropriate, it can make tracking and monitoring investments — as well as determining your asset mix — more complex.7

If it’s difficult to remember where all your investments are located, imagine how challenging it will be for your beneficiaries. It’s never too early to organize your assets, and by working with an experienced financial professional, you can create a plan to leave a legacy for your loved ones.8

1 Suzanne Woolley. Bloomberg. June 7, 2018. “Rich Kids Are Counting On Inheritance to Pay for Retirement.” https://www.bloomberg.com/news/articles/2018-06-07/rich-kids-are-counting-on-inheritance-to-pay-for-retirement. Accessed July 10, 2018.
2 Ibid.
3 Alicia H. Munnell. Politico. June 7, 2018. “Millennials and retirement: How bad is it?” https://www.politico.com/agenda/story/2018/06/07/millennials-preparing-for-retirement-000670. Accessed July 10, 2018.
4 Federal Reserve Bank of St. Louis. Nov. 9, 2015. “The Relationship between Wage Growth and Inflation.” https://www.stlouisfed.org/on-the-economy/2015/november/relationship-between-wage-growth-inflation. Accessed July 10, 2018.
5 Mitchell A. Drossman and Ramsey H. Slugg. Bank of America U.S. Trust. March 6, 2018. “Worth Knowing: Your Art Collection And Legacy Planning.” https://www.ustrust.com/articles/your-art-collection-and-legacy-planning.html. Accessed July 10, 2018.
6 BNY Mellow Wealth Management. The Wall Street Journal. “3 Keys to Sustaining Family Wealth.” https://partners.wsj.com/bny-mellon-wealth-management/3-keys-sustaining-family-wealth/. Accessed July 10, 2018.
7 Wharton School of the University of Pennsylvania. May 29, 2018. “Want to Be in Control of Your Wealth? Unclutter Your Investments.” http://knowledge.wharton.upenn.edu/article/want-control-wealth-un-clutter-investments/. Accessed July 10, 2018.

Content prepared by Kara Stefan Communications
We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.