Retirement planning is more than merely saving money.
You know you want to retire.
Perhaps you have already imagined a life of rest instead of work.
You know where you would want to live and what hobbies you will enjoy pursuing.
Ideas are certainly a start, but this is all they are without planning and execution.
According to a recent The Motley Fool article titled “3 Things Every Good Retirement Plan Includes,” you need to plan concrete details and take action.
Putting away and investing money is only a part of retirement planning.
What else should you do?
You want to keep as much of your money as possible.
To do this, you will need to know the tax consequences of your decisions.
If some of your retirement income is nontaxable, you could save on income tax and keep your Social Security from being subject to taxes.
How could you do this?
A Roth IRA could be a great way to accomplish this.
Instead of taking a tax break now, you will invest funds already taxed.
When you retire, you can make withdrawals without owing taxes.
Also, the money earned through investment in a Roth IRA will be not be taxed.
Prepare for healthcare.
Aging means you will have greater health issues.
This costs money.
Potentially, a lot of it.
Although you can enroll in Medicare at age 65, many costs are not covered.
One such expense is long-term care.
How do you prepare for these expenses?
Purchasing a long-term care policy could be a smart financial move.
Plan for passing along your assets.
If you have assets left when you die, you will want those to go to your family.
What if some of your retirement accounts are still funded when you pass?
With traditional IRAs, you will need to take required minimum distributions starting at age 70½.
Although you could pass this along to family members, the process will be a bit more complicated.
A Roth IRA is more ideal because it is not subject to RMDs.
If you purchase life insurance, your heirs will receive this money without the lump sum cash proceeds subject to income taxes.
It will also pass directly to beneficiaries rather than through probate proceedings.
You should not undertake retirement planning without considering your estate planning goals.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Motley Fool (November 5, 2017) “3 Things Every Good Retirement Plan Includes”