Why does the 401(k) fail?

Everyone looks forward to retirement lived in comfort and relative abundance after several decades of working. Ideally, 401(k) savings are supposed to help individuals attain this end. However, this is not what usually happens in reality, according to this Forbes article.

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401(k) offers a convenient way for many workers to create and maintain a savings account for the future. Generally, an average worker’s 401(k) savings amount from only $25,000 to around $75,000. Needless to say, these figures are hardly adequate for any retiree to maintain a lifestyle far from want. In the end, not a few retirees end up living in forced frugality, sometimes with debts to spare.

Many believe that the deficit occurs due to people’s tendency to purchase unnecessary items beyond the acceptable limits of their finances. Conversely, the article from Forbes proved this assumption false.

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The article stated that nearly three-fourths of workers are forced to dip into their retirement savings to pay for short-term and often unforeseen expenses, like medical and car bills. The same is also true for individuals raising children or sending kids to college. Furthermore, the article revealed that people with lower income are more likely to tap into their retirement savings prematurely.

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To avoid using up one’s retirement fund early on, the article suggested that employers can help by allocating funds for emergency savings, which their employees can tap into in times of sudden need. In the long run, this would prevent them from dipping into their 401(k) savings, giving them more opportunities to utilize the funds for a more comfortable retirement.

JSK Associates helps retirees manage their retirement finances. Visit this website to learn more.

Learn from the stars: Lessons on estate planning from famous people

Estate planning is a way to protect your properties in your absence or death, and makes sure that they are accorded or distributed according to your wishes. An estate plan must be accomplished properly and with the guidance of the right people to avoid tripping legal technicalities. Below are examples of celebrities whose estate planning efforts went wrong:

Heath Ledger

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Ledger left his properties to his parents and sister but forgot to alter his will upon the birth of his daughter. This resulted to family fights that were readily feasted on by the media.

To avoid cases like this, you must remember to update your will every time an important event, such as death, divorce, birth of family members, and adoption, occurs.

 

Sonny Bono

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Bono did not write a will before his death, leading to much confusion about the allocation of his properties.

This proves that creating a will is important and should not be delayed. Death can come unexpectedly, and while it may sound scary, you must prepare for it and be practical to prevent unnecessary conflict among family members who have claims to your estate.

Princess Diana

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Before her untimely death, the Princess of Wales left a letter to her executors that expressed her wish to leave valuable personal possessions to her sons and her future grandchildren. The letter, however, turned out to be null due to legal technicalities.

When leaving property to your loved ones, make sure that your wishes are stated in a properly written will. This is to ensure that they will be carried out by your executors.

Every endeavor needs careful planning in order to be executed successfully. In a world guided by law, estate planning adds legitimacy to your wishes, and puts you in a better position to have them granted even in your absence.

JSK Associates helps its clients create estate plans. More information about estate planning is available in this website.