Jump to Navigation

Wills and trusts should also plan for the unexpected

Does your estate plan include a contingency for a medical emergency? If not, there may still be time to maximize your retirement finances while preserving assets for your heirs.

An attorney that focuses on estate planning may advise individuals to plan on needing 10 to 15 percent of their current income after retiring. To help meet that goal, retirement account plans like 401(k)s and IRAs may offer a catch-up contribution option to individuals after they turn 50. Deferring Social Security benefits may be another good strategy to consider, as the benefit can increase by 8% until a retiree turns 70.

After the crash of the financial markets in 2008, many financial commentators might also consider it wise to insulate some funds from the stock market. One recommendation is to put aside between four and five years of living expenses in a separate account. However, an attorney may have advice on what form that “rainy day” account should take. Cash is probably not the best option, as it offers no return after inflation and taxes. An attorney might recommend an annuity or other vehicle, possibly through a trust.

A medical emergency can also quickly deplete long-term savings. One proactive planning approach to this contingency is a health savings account. Not only are contributions tax-free, but the appreciation and withdrawals may also be tax-free, depending on certain circumstances.

Finally, if all of these potential expenses seem to threaten the nest egg that an individual had planned on leaving to his or her heirs, taking out a life insurance policy can ensure that some funds will still be available.

Source: USA Today, “7 tips to make retirement savings last,” Rodney Brooks, May 7, 2014

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close
Subscribe To This Blog's Feed
Larmore Scarlett LLP

Larmore Scarlett, LLP
123 E. Linden Street,
P.O. Box 384

Kennett Square, PA 19348

Phone: 610-444-3737
Fax: 610-444-9532
E-Mail Us | Kennett Square Law Office Map

LexisNexis Martindale Hubbell Peer Review Rated For Ethical Standards and Legal Ability Peer Review Rated for Ethical Standards & Legal Ability | AV Preeminnent | Martindale Hubbell FindLaw Network