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Your Family's Security in Retirement Depends on Planning Today

Maximize Your Family's Future Retirement Security

Life is Long – That is great if you're financially secure for the long term.

Don’t underestimate your chance of living to a very old age and enjoying an active lifestyle.

  •  There’s a 25% chance that a 65-year-old man will live to 93; a 25% chance that a 65-year-old woman will live to 96; and for a couple 65 years old, there’s a 25% chance that the surviving spouse lives to 98, according to SOA projections. These are only averages and for non-drug using, higher income individuals that receive good health care their chances are higher than the averages for living well into the age 90's.

Transitioning into Retirement

Transitioning into retirement is one of the most important times in our financial lives.  We’re faced with many decisions, and we’re more than likely dealing with the most money we’ve ever had to manage.

Where do you stand financially?

Are your retirement savings, 401k, IRA’s or other assets on track to meet your retirement goals?  Are they positioned for the current economic outlook?

We can give you a Retirement “Fiscal” looking at your resources, goals, and compare investment returns to our “benchmarks” we use to guide our client's portfolios. 

Plan your Lifetime Cash Flow

How to best generate your needed retirement cash flow needs? There are smart ways to tap your assets for the most tax advantages. For example, initially you may want to get cash flow from your non-qualified assets, but once you reach age 701/2 you will have to take at least minimum distributions from traditional IRAs.  Inflation, rising medical costs, etc., have to be taken into account since it will increase future cash flow needs.


Evaluate Company Benefits

What can you expect from your employer once you retire?

Evaluate Long-Term Care options

We call this “Preparing for the Worst” which it is hoped you will not need. But if you do having a financial plan to pay for care costs can be very important for you and your spouse’s long-term financial security.

Re-examine Your Asset Mix

Should you modify your asset mix when you retire? One of the biggest questions people ask at retirement is how should my portfolio change? As people live longer, it’s not unusual to see retirement periods span 20 to 35 years.  That’s a long time, and you’ll need to position your portfolio for continued growth yet provide needed income as well as protect to the extent possible from losses.

Appraise Your Tax Situation

If your income is lower, you may be able to claim more itemized deductions, as some of them are tied to your adjusted gross income.  Most retirees have to pay quarterly estimated taxes.  You should know where you stand with capital gains and losses in your non-retirement plan portfolio.  Do you need to be concerned about Alternative Minimum Tax which is starting to hit more and more folks?   We offer to work closely with your tax advisor.

Review Insurance Coverage

Once the kids are grown, you may need less life insurance.  Or, if you are in good health this may be an ideal time to lock in low long-term term insurance rates.

You Need A Will

If you don’t have a will, your state will decide who gets your inheritance after you’ve died. If you are going to set up a living trust (see below), you’ll want to set up a "pour-over will." This brief document says that all probate assets outside of your living trust will pour over into your trust.

Pay Attention to Estate Taxes

The amount of assets that you can pass to your non-spouse heirs estate-tax-free is $11.18 million in 2018.  For spouses, there is an unlimited marital deduction and "portability" of the deceased spouse's unused exemption. 

For 2018. you can gift away up to $15,000 per donee per year to an unlimited number of people.  Payments made directly to a qualified educational organization for tuition or medical care paid directly to providers are excluded from the gift computation. A married couple can elect to split gifts to increase the limit to $30,000.  However, Form 706 may be required to elect the gift splitting. 

If you gift more than $15,000 or $30,000 per donee, you start using up the $5.45 million estate tax exemption - almost $11m for couples. This is called the  "unified credit" that includes gift and estate taxes. For 2018 with the current proposals to end the estate tax this may change.

Consider Setting up a Living Trust

A living trust operates while you are alive. A living trust enables you to more quickly distribute assets in specific ways while avoiding having to probate a will, thus being faster with more privacy. This trust does not save you any estate taxes. To fund the trust, you’ll need to retitle your assets in the name of your living trust. If you own property in more than one state, you can avoid "ancillary probate" (probate in more than one state) by putting your out-of-state property in a living trust. You also can name a successor trustee (you are the first trustee) to step in on your behalf if you are disabled or die.

If you have an existing older Living Trust, it may be advisable to have it restated especially if it has the old A/B Trust arrangement that was a good estate planning tool under the old law.   In many cases, the new portability provision of the American Taxpayer Relief Act of 2012 is more beneficial than the old A/B Trust.   However, the A/B Trust might be desired in the case of remarriage.   You should review your options with a qualified attorney.

Set Up Powers of Attorney for Health Care and Property

Estate planning is not only about planning for what will happen at your death. It's also about planning for how to manage assets in life if you’re disabled. Powers of attorney protect you if you're not able to act on your own behalf.

Update Beneficiary Designations

This is one area a lot of people forget about. You should review designations every few years, or whenever you have a major change in your life-the birth of a child, death of a spouse/parent, or divorce. Check your IRA accounts, annuities, insurance policies, company retirement and benefit plans and any other assets where a direct beneficiary can be named.

Consider adding beneficiary designations to non-retirement accounts in the form of Payable on Death (POD) or Transfer on Death (TOD) accounts. The Uniform Transfer on Death Security Registration Act allows anyone to designate a beneficiary on a non-retirement account. In doing so, you guarantee that these assets will not go through probate. They pass directly to the beneficiaries, just as IRA account assets do.

Use a Qualified Attorney

Having wills, trusts, and any other legal documents prepared by qualified attorneys may cost more up front then a do-it-yourself approach.  However, quality and value equal price when it comes to tax and estate planning issues.  Spending a little more for professional guidance and implementation will serve your unique needs best over time.        

Let Your Family Know Your Wishes

Many families are at a loss beyond emotional grief when they lose a loved one. They have no clue where to look for important papers or last wishes. You’re giving your family a gift by organizing this information for them.  Or, let them know who your trusted advisor is that has the information.  You are also providing those you leave behind the tools they will need to distribute your assets as you intended.

If you suspect a loved one had additional assets that you can’t locate, try The National Association of Unclaimed Property Administrators.

This information about the law is designed to help users be aware of some estate planning issues. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. This general information is given with the understanding that we are not rendering legal or tax services. If legal advice or other expert assistance is required, the services of a competent lawyer or tax professional should be sought.

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