Workers are Saving Too Little, Too late for Retirement

US workers are approaching a retirement crisis, even as the economy and stock markets are seemingly improved: New data shows that 57 percent of US workers and retirees report less than $25,000 in total household savings and investments, excluding their homes.

That data is the result of a survey conducted by the Employee Benefit Research Institute (EBRI), and it’s jarring because, in 2008, only 49 percent of workers reported having this little money saved.

Today, the situation has reached crisis levels: In fact, only half of the 1,003 workers and 251 retirees surveyed said they could come up with $2,000 for an unexpected need in the next month.

The outlook is no better. The percentage of workers who have saved for retirement plunged from 75 percent in 2009 to 66 percent in 2012. According to the survey, 28 percent of workers are not confident they will have enough money to retire comfortably – the highest level in the study’s 23-year history.

One problem is we’re living longer. For example, a man who reaches age 65 in 2013 is expected to live an additional 20.5 years, up from 19.5 in earlier projections. Our extended lifespans will force us to stretch our retirement savings.

We’re not relying on pension plans either; fewer and fewer Americans are covered by traditional pension plans. According to US Department of Labor data compiled by the EBRI, pension plan participation declined dramatically from 28 percent in 1979 to 3 percent in 2011.

If you think you need to reevaluate your own retirement savings, your advisor can help.

How to Simplify the Probate Court Process

Your estate represents a lifetime of work, so it’s understandable you’ll want to leave as much as possible to your heirs. However, today’s costly probate procedures present obstacles; for a hassle-free transfer, you need to simplify the probate court process.

After you die, your estate will be processed in one or more state probate courts, depending on where your assets are located.

If you die without a will, the court will decide how to distribute your assets, based on state laws. This can be an expensive process. Your estate may have to pay for court costs and legal advice your heirs may require.

You can simplify the probate court process and associated costs by increasing the items that are considered “non-probate” and are transferred without a probate procedure. These include:

  • Assets registered as “joint tenants with rights of survivorship.” Ownership of these accounts passes directly to the other named account holders immediately upon your death.
  • Assets with a designated beneficiary. Many retirement accounts (such as IRAs and 401(k) plans), and insurance products, allow you to name individuals or institutions as recipients of these assets when you die. These assets are excluded from your probate estate and transferred directly.
  • Assets in a revocable living trust. A revocable living trust is a legal entity which effectively holds legal title to assets within the trust, providing for a direct transfer of assets to your beneficiaries.
  • Transfer on death. You can specify that many of your assets, such as securities and brokerage accounts, be set up as “transfer on death” (TOD). Upon your death, they will bypass the probate court process and go directly to whomever you specify in your TOD policy.

You may not be able to take it with you, but with thought, you can ensure your heirs will inherit it hassle-free.