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6 Estate Planning Tips And Advice For Your Retirement


For many, it’s a common misconception that estate planning is only for the wealthy. However, it may be time to change your mindset since having an estate plan early on will ensure your retirement years will be hassle-free. Remember that proper estate planning will go a long way in protecting and growing the wealth you have accumulated over the years.  

Although circumstances will vary for each individual, there are several general considerations when planning for retirement to cater to all your needs while securing your family’s future during your retirement years. Here are several estate planning tips to keep in mind.  

1 – Give Importance To Life Insurance

A crucial consideration when securing your retirement is to prioritize life insurance early on. Life insurance will always be necessary since it offers financial preparedness and peace of mind if an unforeseen event happens. However, it can also be considered a crucial component of your estate planning to ensure a financially secure retirement.  

Generally, life insurance provides your beneficiaries with funds without additional taxes while also serving as replacement income for family members who depend on you financially. 

2 – Scrutinize Your Expenses

Looking closely at your income and expenses may provide insight into what you’ll have during your retirement years. Although the retirement vision varies for each individual, you must secure your finances early on.  

It’d be best to envision what you want your retirement to be so you can prepare. Although various circumstances might come and go, you have an idea of what you want to achieve. If your current lifestyle is beyond your means, it may be best to hold back. 

3 – Switch To A Roth Individual Retirement Account (IRA)

As for your retirement account, consider converting your traditional Individual Retirement Account (IRA) into a Roth IRA. If you’re familiar with the difference between the two, a Roth IRA involves paying taxed contributions right away and enjoying tax-free withdrawals in the future. As for traditional IRAs, contributions are deducted with taxes paid on the withdrawals you make later.  

Doing so will ensure you’ll pass funds to your beneficiaries without taxes. In most cases, the converted amount will be subject to regular taxes, but any withdrawals you make or by your inheritors will no longer include taxes. The best approach is to pay the taxes on the money now rather than later. 

4 – Take Disability Into Consideration

During estate planning, the estate plan should include several crucial considerations if you end up disabled. There are several legal documents you need to prepare, such as a living will, an advance health care directive, and a power of attorney.

A living will outline your end-of-life care wishes where you can indicate any medical treatments, medications, or procedures you want or don’t want to receive. If you overlook one, you might end up undergoing medical measures that you wouldn’t have wanted in the first place.  

An advance health care directive addresses your specific wants for your medical care and allows you to assign someone to make health-related decisions once you’re no longer capable. A living will and an advanced health care directive seem strikingly similar. The difference between the two will depend on the state you reside in and how the state defines both terms. 

power of attorney appoints an individual you trust to make financial decisions for you. The chosen individual will take charge of your finances if you become incapacitated. Make sure the person you assign is someone you truly trust to manage your finances properly.  

5 – Draft A Will

Drafting a will should be a priority during estate planning. Generally, the document outlines the distribution of your assets in case you pass away. 

If you fail to create a will, it’s likely for your estate to be divided during probate. In such circumstances, there’s a high chance that what you wanted for your estate won’t happen. However, even with a will on hand, it’ll still go through the probate process.  

Even if you already have a will, make sure to thoroughly review your list of beneficiaries after major events such as the death of a family member, birth of children, divorce, or marriage. Additionally, keep your beneficiaries up to date with your estate plan to avoid possible conflicts in the future. 

6 – Consider Setting Up A Trust

One way to ensure you can retain money in your family is to set up a trust. Having one ensures that money will move from one generation to the next, and the best aspect is that it’s protected from lawsuits, divorces, or potential claims from creditors.  

In the simplest form, a trust allows you to assign a trustee to oversee your finances according to your specified instructions. A well-structured trust will assure you that your wishes will push through the way you want. Consider employing the services of a lawyer specializing in estate planning and trusts. 

Final Thoughts

Although the estate planning process can be challenging for many due to the constantly changing regulations and tax laws, not taking action might not bring the ideal retirement years you’ve envisioned. Even if you consider yourself financially secure, proper estate planning is necessary even before retirement. Considering these valuable insights will give you a head start in keeping your family secure and ensuring hassle-free retirement.





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