The recession might be over, but you might have a hard time convincing many seniors who are living in or right at the poverty rate. A new study completed days ago shows a less than pretty picture. The reality of long-term repercussions are alarming and the potential unexpected realities might give new meaning to estate planning and asset protection. If you’re thinking this will affect your parents and grandparents, you’re right – but make no mistake, this is sure to affect you, your children and possibly your grandchildren.
Just looking at the statistics reveals much. For instance, the median earnings for a man who works the entire year in a full time position has changed drastically:
And no, that’s not a typo. Men working full time in 1973 were earning more than a man working full time today. This means there’s less to put back for retirement, and it might mean there’s less of an estate to protect.
It gets worse, though. A full 15 percent of Americans were living in poverty in 2012 and nearly 22 percent of children under the age of 18 live in poverty. The numbers work out to 46.5 million. Of those who are not only living in poverty, but are living in what the government defines as “deep poverty”, nearly half of those 46.5 million fall into that category.
The Economic Policy Institute, which conducted the survey, says that without Social Security benefits, another 15.3 million people over the age of 65 would have been living in poverty in 2012. That puts the numbers closer to the number of children living in poverty.
Between 2000 and 2012, there was an increase of 25.4 million of Americans on some type of government insurance, whether it’s Medicare or Medicaid. The number of Americans no longer receiving medical insurance through their employer is also down nearly 11 percent.
So worried are some states about the heavy burden social security will soon tax on their budgets, they’re now passing laws that would force a percentage of workers’ incomes into a retirement account. In California, efforts are being made to offset what’s being called a “retirement tsunami.” It was signed into law exactly one year ago by Governor Jerry Brown. It’s referred to as the California Secure Choice Retirement Savings Program and as mentioned, it puts into place automatic payroll contributions into retirement accounts for 6.3 million Californians whose employers don’t sponsor any type of retirement plan. These are controversial moves, say many, especially since employers who do not take out those funds will be fined up to $500 per employee.
While all of these facts are disturbing, and already we’ve heard our clients voice concerns about there not being a need for a will or any type of asset plan, there are still many avenues that can help to not only protect your assets, but also pave the way for your children and grandchildren to a better future for themselves. Never before has estate planning been so important. With so much at stake and so much uncertainty, now’s the time to ensure those bases are covered.
Remember, we’re a mere weeks away from many of the new healthcare laws to kick in. This will surely affect everything from Medicaid and nursing home qualifications to the type of care we receive. Contact our estate planning team to learn how you can put that foundation into place.
Latest posts by Saul Kobrick (see all)
- New Tax Law May Affect State Income Tax, Too! - February 20, 2018
- Planning for Retirement Plans and IRAs: Asset Protection - February 15, 2018
- Sager Family Shows Perils of Blended Families - February 13, 2018