While most people look forward to retirement, the thought of no longer bringing in a steady income can cause a lot of stress. However, by taking a few steps leading up to retirement, you can alleviate many of the most common concerns. The Jacksonville estate planning legal team at Beller & Bustamante, P.L., work with individuals and families at every stage of life to help them address their estate planning needs. With more than 30 years of combined experience, we can help you and your family effectively navigate the years leading up to retirement to put you in the best position possible.
Estate Planning Tips As You Approach Retirement
According to a recent survey, 62 percent of Americans are worried about retirement. The most common concerns all relate to financial stability. For example, 55% of respondents reported fearing that Social Security benefits would dry up, and more than half of those surveyed worried about the balance in their retirement accounts.
To be sure, having an enjoyable retirement depends on having sufficient financial resources. However, for many families, it is not just their own financial standing that is important, but also those of coming generations. Below are a few tips to consider as you approach retirement to help ensure that your needs are met, as well as those of coming generations.
Purchase a Life Insurance Policy
Purchasing life insurance is a good way to provide loved ones with a little extra padding once you pass on. Life insurance policies come in several types, the most common of which are term life insurance and whole life insurance.
Term life insurance is good for a specific period of time. You will pay monthly or annual premiums during the term. If you die during that period, the named beneficiaries receive the benefits outlined in the policy.
Whole life insurance is a type of permanent life insurance, making it more like an investment. A whole life insurance policy has a death benefit as well as a cash value. Every month that you pay the premium, a portion of the premium goes to the policy’s cash value. The cash value also receives interest, providing a guaranteed rate of return. Because whole life insurance policies are an investment, they tend to be more expensive than term life insurance policies.
Create a Will
The will is the most basic element of any Jacksonville estate plan. Simply put, when you create a will, you list all your assets and explain where you want them to go upon your death. Having a will, and reviewing it with loved ones, can greatly decrease the chances of familial disputes down the road. However, it is important to remember that making a will does nothing to avoid the probate process. Thus, if probate is a concern, consider re-titling assets or creating a revocable trust.
Review Long-Term Care Insurance Options
One of the biggest fears among those approaching retirement is their ability to pay for long-term care, should the need arise. This is a legitimate concern, as the costs of long-term care can be astronomical. According to the Florida Health Care Association, the average annual cost of care for a private home in a Florida nursing home exceeds $100,000.
Medicare does not cover long-term care. However, you can purchase a long-term care insurance policy that will pay for the costs associated with long-term care. But be forewarned that these insurance policies can be expensive. The younger you are when you purchase a policy, the cheaper the annual premiums will be.
Consider Gifting Assets
If you are concerned about estate tax eating away a large portion of your estate, gifting is a good alternative. It is important to keep in mind that there are annual limits on tax-free gifting. Currently, this limit is $15,000 per year. However, you can gift assets to as many people as you would like, up to this annual limit. Another option for gifting assets involves creating a charitable trust.
Think About Disability Planning
The thought of planning for disability is not something that many look forward to. However, it is a crucial part of estate planning as you approach retirement. By creating a power of attorney, living will, and designating a healthcare proxy, you can clearly outline your wishes should you suddenly become incapacitated. Doing so will not only provide you with peace of mind but will also decrease the likelihood of familial disputes in the future.
Maximize Contributions to Retirement Accounts
In the years leading up to retirement, it is a good idea to maximize contributions to tax-preferred accounts, such as traditional IRAs, 401Ks, 403bs. These accounts allow you to set aside pre-tax money for later use. When you eventually need to withdraw from these accounts, you will not incur any tax obligation, assuming you meet the requirements.
Review Social Security Benefits
While Social Security benefits are unlikely sufficient on their own, it is still important to review your expected benefits. If you do not need benefits immediately, you may be able to defer them. By deferring social security benefits, you will increase your monthly benefit amount. An estate planning legal practitioner can help you determine how to maximize the amount of lifetime Social Security benefits.
Contact a Jacksonville Estate Planning Law Firm
If you are approaching retirement and have questions about the steps you can take to put your family in a better position for the future, reach out to Beller & Bustamante P.L. At Beller & Bustamante P.L., our estate planning lawyers in Jacksonville take a practical and effective approach to the estate planning process. We begin by listening intently to your needs and answering your questions in understandable terms. We will then work with you to address each of your concerns. Regardless of your current financial standing, we can help create an estate plan that fits your unique needs. To learn more, and to schedule a consultation today, give us a call or reach out to us through our online form.