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To: EL KABONG!!! who wrote (43279)	12/14/2003 5:10:49 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

azcentral.com Boomers can't depend on a hefty inheritance to finance retirement Sandra Block USA Today Dec. 14, 2003 12:00 AM Your parents have helped you in more ways than you can count. They put you through college, gave you a place to stay when you were out of work and helped you buy your first home. But if you're counting on them to finance your retirement, you could be in for a big disappointment. A new study by AARP suggests that most baby boomers will receive a small inheritance, if they get anything at all. As of 2001, only about 17 percent of boomers had received any inheritance. Those that did receive money didn't get much, AARP says. The median inheritance was $47,909. This wasn't supposed to happen. A few years ago, studies predicted that boomers would inherit trillions of dollars from their parents, a comforting thought for people who hadn't saved much for retirement. But those studies failed to take into account longer life expectancies, soaring health care bills and long-term care, AARP says. All those factors can erode retirees' savings, reducing the size of their children's inheritances. For boomers, the results point to an inescapable conclusion, says John Gist of the AARP Public Policy Institute: "They're going to have to save more." Yet several other recent studies suggest boomers aren't getting the message. Hewitt Associates, a human resources consulting firm, recently reported that more than 40 percent of workers who switched jobs last year cashed out their 401(k) plans instead of rolling the money into another retirement savings account. Another survey by Plansponsor.com found that the average participation rate in 401(k) plans fell 3.6 percentage points this year, to 72.6 percent. The Hewitt study is particularly troubling because a cash-out will leave permanent scars on your retirement portfolio. You'll have to pay income taxes on the withdrawal, plus a 10 percent penalty if you're under age 59 1/2. You'll also give up years of tax-deferred compounding. While cash-outs were highest among workers ages 20 to 29, about a third of job changers ages 50 to 59 took their 401(k) distributions in cash. KJC