Posts Categorized: Retirement Planning

Retirement Planning All That Much More Important for Women

Although the saying goes that two can live as cheaply as one, the opposite can also be found to be true for an older woman.

No woman wants to think about how her life might change in her older decades, however, living alone can lead to higher expenses and with longevity numbers higher for women to begin with and the fact that many women shoulder the burden of child care and do not have as much retirement savings as a result, it’s more important than ever to consider how your retirement planning can act with your estate planning.

There are a couple of different things you can do to empower yourself in the retirement planning process as a female. First of all, you need to get organized by maintaining a list of all account logins, numbers and balances. This gives you an idea of where you’ll stand in the event that you were to suffer a sudden life changing event such as a diagnosis of a disability.

Furthermore, you need to prepared to take control for your finances even if you have neglected financial planning in the past. Furthermore, it can be devastating to realize that the pain of losing a spouse can lead to another blow when there was no estate plan in place.

Make sure that you have financial and medical powers of attorney as well as all the crucial documents necessary to protect you, if something were to happen to you or to your loved one. Speak to a Massachusetts estate planning lawyer if you need help talking through the connection between your retirement and estate planning.

 

Outliving Your Life Expectancy and What This Means for Retirement

Most people entering retirement today know that they may live a long time. Others still can expect a long life expectancy but potentially one that is impacted by one or more long-term care events. That’s why careful planning with a Massachusetts estate planning lawyer can help you look ahead to retirement with confidence and peace of mind should something happen to you.

According to recent research, more than 56% of all women currently aged 50 are expected to live longer than their life expectancy of 83 years. Furthermore, 55% of men are expected to outlive their expectancy as well. Although this might seem a bit strange, this skewed distribution has more people living longer than passing away early.

According to the Social Security Administration’s recent statistics, 30% of all 50-year-old women today will live to see their 90th birthday and up to 90% of men will as well. The most likely age for a 50-year-old man to pass away is 85 and for a 50-year-old woman, this number is 88. A woman is more likely to die at age 92 than her actual life expectancy of 83. These numbers have important implications if you are currently engaged in the estate planning process.

Thinking ahead about how you will fund your retirement and pass on assets to the future should be something you contemplate as you think about the legacy you have established over the course of your life. Ensuring that you have enough assets to support you through your retirement is crucial, but you may also be concerned about the rising costs of long term care.

 

 

What You Need to Know About How a Job Loss Today Can Impact Your Future Retirement

Many people across different age categories in the United States struggle financially and a sudden illness or a job loss can have a major impact on their retirement savings accounts. These savings accounts are often tapped into during emergency situations because they provide ready cash. However, withdrawing from your retirement account now can have significant long term costs and many people do not realize the extent to which they can affect you.

According to a study by the New School for Social Research, up to 96% of Americans will experience 4 or more income shocks throughout their life. This is defined as a 10% or higher decrease in pay as a result of something like a sudden illness or a job loss. On their own, an income shock won’t have a devastating impact on your retirement savings overall. However, compounded, this could significantly reduce a nest egg. In fact, having poor health ultimately reduces your retirement savings by more than $34,000 and very poor health reduces it by more than $86,000.

Those repeated income shocks can have an impact of a loss of more than $10,000 and reduce savings across your working career. Planning ahead for retirement and thinking about when you will take action to save for retirement as well as buffering yourself against long term care events are all steps that you need to take now before a problem happens.

Consulting with a knowledgeable estate planning attorney in MA is just one thing you can do to sit down and discuss how you will protect the assets you’ve already built and opportunities to pass on those assets to future generations.

 

 

The Connection Between Poor Health and Saving for Retirement

If you cannot afford to retire yet, you may need to keep yourself healthy enough to continue working. According to a project released by the Transamerica Center for Retirement Studies, of the 39% of individuals around the world who retired sooner than planned, 29% did so because of less than ideal health. In the United States, 61% of retirees overall retired sooner than they intended to, which was the highest rate for every country surveyed.

Those who struggle with their health have a greater chance of intending to work past age 70, but only a portion of those who plan to will be able to stay employed as health risks jeopardize their options.

Up to 17% of those who reported themselves as being in excellent health intended to retire at 70 years or older or not at all. The survey also found that approximately half of employees in the United States were not adopting beneficial behaviors that would allow them to stay healthy and continue working. This is a critical gap when a person chooses to focus on investing time and energy into their employment but not into keeping themselves healthy.

Although genetics certainly does play a role in these issues, part of your health outcomes can be linked with your individual behaviors. There is a double benefit for those individuals who keep good health in the decades leading up to retirement when they do stop working. If they take care of themselves and then save the money that they would have spent on healthcare expenses, they’ll have more money in retirement and their overall healthcare cost and retirement will be less as well.

Ready to talk about planning for your future with the help of a lawyer? Consult with a Massachusetts estate planning attorney today.

 

 

New Study Identifies Giving Practices by Retired Individuals

Looking ahead to your retirement has probably been something that you’ve planned for for decades. You’ve invested in the right accounts, charted out what you might need to support you through older years and consulted with a financial planner and estate planner on a regular basis. A new study conducted by Merrill Lynch identified that nearly half of Americans aged 50 and beyond will overextend themselves financially in order to enable their children to obtain a more comfortable life.

While this may give you greater peace of mind that your children have access to resources that will assist them as they begin their working career, this can also jeopardize your ability to have enough funds in savings to support you through a long and healthy retirement.

Given that many people may also face a long-term care issue at some point after age 65, it is imperative to realize that there may be better ways of passing on assets and enabling your children to receive support. The study identified that parents who are in the retirement phase of their life are giving their adult children up to $6800 per year in order to enable the adult children to live more comfortably.

Nearly 80% of the survey respondents said that they felt that this was the right thing to do. Adult children were the ones who received the most help from a retired family member when compared with parents, siblings, and grandchildren. If you have questions about the best way to plan ahead for your retirement and how to incorporate estate planning into the retirement planning scope, consult with a Massachusetts estate planning attorney today.

 

 

 

These Retirement Errors Could Cost You and Your Kids

Planning ahead for retirement is something you’ve probably been doing for a long time. However, many people are plodding along with their retirement plans without realizing that some mistakes could be costing them and their children in a big way.

Here are the ten biggest mistakes you might be making with your retirement plan that could force your children to have to step in and take care of you:

  • No clear investment plan, or a plan that’s based on a “buy and hope” strategy
  • Too much of your own company or employer’s stock
  • Aiming for an “average” amount in your accounts
  • Still paying the bills for an adult child’s regular needs or lifestyle
  • No established plan for your healthcare expenses in retirement
  • Excessive debt and no plans to pay it down
  • No spending plan for your current expenses or your future budget
  • You’re taking too much out of your retirement plan early
  • Your only retirement plan is a dedication to continue working to fund your needs
  • No plan or insurance in place to deal with long-term care needs

As you can see from this list, most mistakes have to do with not having a contingency plan. Just one long-term care event or accident could leave you unable to work and also coping with costly medical expenses. For someone who planned to be working and very healthy throughout all their retirement, this plan exposes you to a lot of risks if even just one accident occurs. Developing a disability or cognitive problem could present even more serious issues.

Along with comprehensive retirement planning, it’s important to think about your legacy and your estate plan. Consulting with an experienced Massachusetts estate planning lawyer is critical.

 

Top Tips for Helping You Identify Your Retirement Age

Looking ahead to retirement can help you figure out whether you have saved enough to support your lifestyle and how you intend to pass on some of your assets to others.

The typical worker in the United States retires at age 63, but a growing portion of this population is waiting to retire until later in order to enhance their savings. It turns out that there is not perfect retirement age, but you may be able to identify the various milestones linked to traditional retirement in the United States that can help you figure out what might be most appropriate for you.

You might decide to delay tapping into Social Security benefits since you can increase the amount you receive by going this route. If you delay taking Social Security beyond your full retirement age, your benefits go up. For example, full retirement age is 66 and you If you opt in at age:

  • 66, you’ll receive 100% of your monthly benefits
  • 67, you’ll get 108% of your monthly benefits
  • 70, you’ll receive 132% of your monthly benefits

Social Security Chart: https://www.ssa.gov/planners/retire/1943-delay.html

Some of the most important milestone ages nearing retirement include:

Age 59 ½ is the first time you are eligible to take penalty free withdrawals from your IRA or 401(k).

Age 62 is when you can start claiming social security.

Age 65 is when you initially become eligible for Medicare.

Age 66 is the full retirement age for those individuals born between 1943 and 1954.

Age 67 is your social security full retirement age, if you were born in 1960 or later.

Age 70 is when you stop accruing delayed retirement credits for waiting to enroll in social security.

Age 70 1/2 is when it is necessary to start taking required minimum distributions or RMDs from your traditional 401(k) or IRA.

There are some additional questions that you can ask yourself to help to determine whether or not it is time for you to retire. These include;

  •       How is your health in general?
  •       Are you still working and how is your job?
  •       How do you plan to fill your dates?

Consulting with an experienced estate planning attorney in Massachusetts is another step that is necessary to take as you get closure to the retirement process.

 

How Will You Spend Your Time in Retirement: Tips for Planning

The answer to when is the appropriate age to retire is not easy for anyone to answer, but one of the most important things to consider as you evaluate this question is how you intend to spend your days. This will have a significant impact on how much money you will need and can help you target an age most appropriate for you.

As you attempt to figure out an ideal retirement age, think about how you’ll be spending your days not working. Will you be keeping busy at home? Or will you grow frustrated and restless without entertainment and travel? If you are concerned that you will not be able to fill your days successfully, you may wish to wait a couple of extra years to save enough money to sustain that lifestyle. If you are the type of person who finds themselves bored easily, you may even wish to postpone your retirement age even if you already have a substantial nest egg.

Too many retirees fall victim to depression, so working longer helps to serve as a social outlet and gives you additional motivation to wake up every single morning. It might make sense to delay your retirement age even if you don’t necessarily need the money.

This can give you additional assets to include in your estate plan and leave behind a greater legacy for your loved ones. If you intend to leave behind retirement assets that you do not expect to leave to your family members, it is an ideal situation to discuss with an experienced estate planning lawyer as soon as possible.

 

New Study Shows that Most People Are Confused and Cynical About Retirement Planning

A recent study conducted by Scottrade identified that the vast majority of people who are investing do not act on their own for retirement planning and while some of them are satisfied that the advice they receive, many investors are also confused, cynical or even overwhelmed.

The majority of U.S. investors have made the decision to partner directly with an advisor for retirement planning. Approximately two-thirds of people in the United States are working directly with a financial professional to help them with the retirement planning process and nearly half of them are extremely satisfied with the way their financial advisor has managed their retirement assets.

Nearly half of investors in the United States, in particular GenXers and Millennials, are overwhelmed with the investment choices available and have trouble finding the right advisor.

The challenges associated with retirement planning mean that far too many people choose not to take any action. There are clear parallels between retirement planning and the lack of estate planning, since many people find the process confusing or overwhelming without the help of an outside professional.

It is just as important to identify an experienced professional to help you navigate the estate planning process as it is to find someone to assist you with your retirement. Your estate planning attorney can make recommendations about your individual situation and help you navigate this complex process to determine a plan that works for your individual needs.

 

Optimizing Your Retirement Planning Strategy for Taxes

Time for taxes with moneyLooking ahead to the future is critical for any individual who is in the process of saving for retirement. Setting aside enough money to handle increasing longevity concerns and the rising costs of long term care are two of the most common reasons why an individual will approach retirement planning and estate planning with the help of an experienced professional. However, it is also important to consider how you can optimize your retirement planning strategies for taxes as well.

Your retirement planning and estate planning needs often intersect, and leveraging the right professionals, such as a financial planner and a Massachusetts estate planning attorney, can help ensure that your comprehensive plans are working for your retirement as well as for the benefit of your estate.

There are several different steps that you can take to accomplish this goal, including:

  • Plan to take your Social Security benefits after reaching full retirement age. This allows you to tap into the best tax advantage income sources and will not allow for inflation degradation.
  • Consult with an experienced financial planner and estate planning attorney. Tapping into the power of professionals who have worked in this field for a number of years gives you an overview of the different types of strategies available and allows you to partner with someone who has extensive experience in the field.
  • Update your retirement planning program under an annual basis along with your estate planning. A lot will depend on your tax rates currently and how you will be taxed in the future.

Since tax laws can change every single year, it is important to look back at what actually happened to your investments over the year and how you can update your plan to make the most of it.