Schwab Retirement Plan Services recently surveyed 1,000 workers who had access to a 401k plan. Half of those individuals were not contributing actively to such a plan and the other half were. The non-savers, according to the study results, are increasingly challenged by financial stresses affecting them on a day to day basis and in particular credit card debt. The majority of people who were actively contributing to their 401k used it as their primary source of retirement savings.
A number of different sources of financial stress were identified, although non-savers had many more challenges on a day to day basis and in much greater numbers than their peers who were saving. More than twice as many individuals in the non-saving category were struggling to keep up with monthly expenses. In fact, 42% of the non-saving respondents indicated that saving was difficult because paying for monthly expenses was also a challenge. 45% of non-savers fell behind on bills at the end of each month or had no money left over. Although 23% of those contributing to a 401k said the same. Non-savers recognize that reliant on debt was impacting their ability to save. These gaps in retirement could present significant problems in the future when the non-savers attempt to fund their own long-term care services.
Having a plan for long-term care in consulting with an experienced estate planning or elder law attorney is extremely important for articulating your wishes and determining what assets, if any, will be counted toward government qualification for Medicaid. Retirement and estate planning often work hand in hand and scheduling a consultation with an attorney can help to illuminate you about the steps that you should take to protect yourself as well as your loved ones.
