Will you run out of money before you run out of life? That is a common concern of seniors. The mistakes they make are usually because they do not know what they do not know.
A recent article in Physician’s Money Digest lists some of the most common mistakes seniors make in a recent article titled “Top Mistakes Seniors Make”.
According to the article, what are some of these mistakes?
1. Misinformation about Medicare. Some seniors believe that once they qualify for Medicare, they are 100% covered without any gaps. Unfortunately, there may be issues, such as nursing homes for "chronic" care and assisted living for long-term care.
These are not covered under Medicare.
2. Failing to consider mental incapacity. Many seniors fail to address how they want health care and financial decisions handled in the event they are incapacitated. Remember, a will does not have any legal power until you die.
If you draw too soon (i.e., before age 59 1/2, absent a limited exception), then you will feel the sting of a 10% excise tax ... and you will miss out on the magic of tax-deferred compounding on the prematurely withdrawn and taxed funds.
If you draw too late, then you will get socked with a nasty 50% excise tax on top of the income tax on what you should have taken out but did not. Whew.
Speak with an experienced estate planning attorney about the retirement account rules to get the most from your assets.
4. Mis-timing life insurance decisions. You should assess your life insurance needs and current premiums to determine what is appropriate in your circumstances.
Perhaps you do not need the life insurance you have or you need to acquire more.
5. Relying on annuities. Whether an annuity is the right choice depends primarily on your specific financial situation. Conduct an in-depth assessment of the product and your overall financial plan with estate planning attorney.
He or she will serve as an independent third party with no hidden motive other than our financial security.
As you can see, there are many issues that need to be addressed when it comes to retirement planning.
Do not go it alone.
Get appropriate professional counsel.
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) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Physician’s Money Digest (April 8, 2015) “Top Mistakes Seniors Make”