Don’t wait until the very last minute to make sure you are prepared, says Michael H. Milarski, a partner and senior financial advisor with Signature Financial Planning.
Have you checked your list and you’re sure you’re ready to retire? You may have a few items to address before your golden years can begin.
A recent Fox Business article, titled “5 Things to Do Now if You’re Near Retirement,”says that these are the five important things to work on in the five years before you retire.
Although some couples remain unmarried to protect their estates, that strategy backfires if you end up paying estate taxes. If you choose not to marry, you and your partner need to educate yourselves on your estate planning and retirement options.
If you’re married, you’re able to inherit an unlimited amount of assets from your spouse—without paying any state or federal estate taxes. In addition, you’re permitted to give an unlimited amount of assets to your spouse while you’re alive without filing a gift-tax return.
This exemption doesn’t extend to unmarried couples. Estates of up to $5.43 million are exempt from federal estate taxes. Some states, however, have lower thresholds for their estate or inheritance taxes.
Here are a few of the most common mistakes we’ve seen seniors make in regard to their retirement planning.
Sometimes knowing what NOT to do is just as important as knowing what to do. So it is with retirement planning.
Physician’s Money Digest lists some of the most common mistakes that the authors have seen seniors make in a recent article titled “Top Mistakes Seniors Make”:
Now is the time for small business owners to evaluate their year-end retirement planning while building a retirement budget line item for next year.
A recent article in The (Great Falls MT) Prairie Star, titled “Review estate, tax and retirement planning issues now,” argues that a farm or ranch operation should include retirement savings for the owner and/or employees as a part of annual budgeting. These retirement funds provide tax savings now and may provide liquidity and income when the decisions for retirement and/or farm transition take place.
Small businesses, including self-employed taxpayers, have two choices after the end of the year to establish and contribute to a retirement plan. These two choices are the Simplified Employee Pension (SEP) plan and the individual retirement arrangement (IRA). A taxpayer has until the due date of the business federal tax return (including extensions) to set up and fund a SEP, but IRAs can’t be funded after the due date of the taxpayer’s personal federal income tax return.
Individual investor Ronald Read has made the news because his personal investing strategy relied heavily on paper stock certificates. Today, investment advisors encourage individual investors to convert stock certificates to electronic form and consolidate stocks with a professionals so that heirs will have an accurate record of ownership.
In addition to his paper stock certificates, Ronald Read had stock positions held directly at transfer agents (the official record-keepers for share ownership), as well as in a Wells Fargo brokerage account.
Is this a good idea?
Frank Underwood is not a real person. He’s the crooked politician portrayed by Kevin Spacey in the Netflix series “House of Cards” who claws his way into the White House by manipulating the press and ruthlessly crushing anyone that might get in his way. But sadly, with one line, he delivered more honesty than I have seen from any president, senator or House representative, from either party, in my lifetime: “We’ve been crippled by Social Security. By Medicare. Medicaid. Welfare. And entitlements. And that is the root of the problem. Entitlements. Let me be clear: You are entitled to nothing.”
Frank Underwood, Kevin Spacey’s character on House of Cards, gives us the cold, hard truth about retirement. Social Security and Medicare are not “rights” in any legal sense. Congress decides on the payout, and Congress can change it—or eliminate it—at any time. You really are not “entitled” to anything and certainly nothing is guaranteed, according to a recent Forbes article titled “Life Lessons From House Of Cards: "You Are Entitled To Nothing".
You are entitled to nothing. It’s not fun to hear, but it’s important to remember when you’re planning your retirement. You should plan under the assumption that your benefits in retirement will be lower than currently promised. With that in mind, here are three specific recommendations from the article’s author on how to approach your planning:
n nearly every way you could make a mistake — for example, saving too late — you can also make up ground by availing yourself of all resources at your disposal (say, your employer's 401(k) matching program). With that in mind, here’s a list of 28 major retirement pitfalls to avoid — and what to do if you end up taking some missteps.
Retirement planning is tricky, no? When and where and how much … there is no “one size fits all” when it comes to retirement.
Experts say that the right retirement plan involves timing and opportunity. But nobody’s perfect. We all are apt to make a mistake, but we can usually make things right. With that in mind, The Motley Fool compiled a list of 28 major retirement pitfalls, how to avoid them—and how to correct them if you take a detour in an article titled “28 Retirement Mistakes People Make.”
Don't think savings is a big deal? Ask anyone who is running their own business, decided to retire early or abandoned their old job to go after their dream career. Savings was their saving grace, no pun intended.
The Fall 2014 Merrill Edge Report showed that 80 percent of millennials think about their long-term finances when they are paying bills; nonetheless, they also need to pay themselves.
A recent The Huffington Post article, titled ”4 Things I Wish I Knew About Money in my 20s,” emphasizes that the most important thing a millennial can do today to improve his or her financial future is to start saving. It's important for millennials to find a balance between paying off any debt and saving for their future goals and retirement.
Roth IRAs intrinsically make phenomenal transfer of wealth vehicles. With reduced estate taxes and no income tax for heirs to pay on withdrawals, establishing a Roth IRA or even converting to one from a Traditional IRA seems to be a simple decision. Just know what you are doing ahead of time.
When planning your estate, keeping all parties in mind is important. So it is with Roth IRAs.
A recent Benzinga article, titled “Legacy And Estate Planning With A Roth IRA,” says you should think about not only the account holder's tax situation, but the heir’s as well and consider the tax burdens your heirs may inherit.
You wouldn't play golf without a full set of clubs. Don't go into retirement without a fully equipped retirement toolbox. Retirement brings the freedom to explore a new stage of life. But for many, after years of working for others, it also means assuming responsibility for generating a paycheck for decades. Having a few basic resources at hand can make it easier to navigate the challenges that come with retirement.
A recent Wall Street Journal article, titled "Have the Right Tools for Retirement," says you need a full set of golf clubs to play the game as intended. Similarly, you need a full set of retirement tools to ensure that you are planning wisely. These should include all of the following:
Houston Estate Planning and Elder Law Attorney Blog