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APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Wealth Transfer: Kids, You're On Your Own

Retirees in the UK and U.S. are less likely than their global counterparts to indictate they have not achieved their aspirations in retirement.

| BY Donald Liebenson

Future, smootchure. Roughly one-fourth of Americas (23 percent), feel it’s better to spend all of their cash during the course of their lifetime and let their children create their own wealth, according to a new HSBC global retirement survey. Only 9 percent believe they should save as much money as possible to pass on to younger generations.

The HSBC report, “Choices for Later Life,” charts global retirement trends to encourage people to plan their long-term financial futures.

For working-age Americans, the report finds the retirement planning trend is towards redistributing their savings over a lifetime as a living inheritance versus wealth accumulation to distribute in a will. Six-in-ten (62 percent) or working-age Americans report they are providing regular support to at least one other person.

In comparison, just over four-in-ten of U.S. retirees continue to provide regular financial support to at least one other person. This includes 10 percent who are also still supporting at least one adult child, and is 17 percent less than the global average (22 percent). 

These results suggest Americans have an overall preference to spend or give away retirement savings during life, rather than pass it to heirs after death, the report finds. 

The HSBC survey of more than 16,000 people in 15 countries and territories worldwide, including 1,000 respondents in the United States, also reveals a mismatch between inheritance hopes and reality. Nearly three in five (59 percent) working age Americans expect to leave a financial legacy to their children. However, less than a third (31 percent) report actually receiving one.  

Retirees in the UK (53 percent) and American retirees (59 percent) are less likely than their global counterparts to say they have not achieved any of their hopes and aspirations since retiring. 

But who is fully retiring? Four-in-ten working-age Americans plan to semi-retire before fully retiring–that’s nearly double the 22 percent of current retirees who initially semi-retired.  On a global scale, more than half (56 percent) of those working-age plan to semi-retire.

Many U.S. retirees are relying on a bequest to fund their later years, with almost three-in-ten (29 percent) of those who’ve received or expect to receive an inheritance believing it will fully or partly fund their retirement. Among workingage people, nearly half (49 percent) expect to receive a legacy which will support them later in life.

The living inheritance is a concern for a quarter (25 percent) of U.S. retirees who worry about not being able to support family or friends financially, according to the report. Approximately the same number, (23 percent) also fear becoming reliant on family or friends for financial support.

In addition, the research found that nearly two-thirds of U.S. retirees (59 percent) have been unable to realize at least one of their hopes and dreams since retiring, a potential consequence of ‘giving while living.’

 “Living inheritances add another dimension to the already complex financial pressures faced by retirees,” Andrew Ireland, EVP and Head of Premier Banking, HSBC Bank USA, N.A., said in a statement. “A desire to support loved ones during your lifetime is of course understandable, but for many people this comes at a cost both to their retirement dreams and to their ability to leave a legacy.”


About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.