What Does Inflation Mean for Your Retirement Savings?

by with No Comment Estate PlanningInflationRetirement Planning

You may have earmarked your retirement savings not just for your own purposes after you exit the workforce or downgrade your current work role, but also to support your loved ones in estate planning. One of the biggest challenges for retirement savings is inflation.

Rising prices can erode the value of the money you’ve set aside no matter how much you’ve set aside over the course of your working years. This is especially important to consider in 2023 when the consumer price index hit 6.4%, one of the highest since the early 1980s. Prices for goods and services are affecting many people already in retirement and this leads many looking ahead to the future wondering how inflation will influence their retirement savings too.

In fact, 40% of workers in the United States have already postponed their retirement due to the increasing cost of living. Here are some tips to keep in mind to continue setting aside savings:

  • Not every investment decreases in times when prices are rising. Some actually perform better.
  • Bonds may be a good opportunity to explore with your financial professional.
  • Spend less and save more. Can you make any adjustments to your current expenses to set aside more money in savings? Withdrawing money at a conservative rate during retirement is one other option to pursue.
  • Discuss potential health care costs with your estate planning attorney or long-term care insurance agent. You may be able to prepare yourself to better adjust to some of the most expensive costs in retirement in this way.

If you’re concerned about inflation influencing your future, talk to a knowledgeable lawyer about your options with estate planning in NH.

 

chronic health conditions, health, conditions

Chronic Health Conditions Could Affect Retirement Savings and Estate

by with No Comment Estate PlanningRetirementRetirement Planning

A new study finds that later born generations of older adults in the United States are more likely to suffer from chronic health conditions when compared with previous generations. This has important implications for the possibility of long term care planning. Long term care planning refers to the strategies you have in place to protect you if and when you suffer from a disability or medical condition that requires outside support.chronic health conditions, health, conditions

Many people turn to friends and family members for immediate support following a disabling event or long-term illness but a stay in a nursing home or other similar facility may be necessary at some point. Many people fail to properly plan for these costs and process, putting them in the difficult position of trying to qualify for Medicaid quickly. The research found that there is an increasing frequency of multiple chronic health conditions, also known as multi morbidity. This is putting an increased financial strain on the wellbeing of older adults as well as federal and medical insurance systems.

This is particularly important given that the number of adults older than age 65 in the United States is projected to grow by more than 50% by the year 2050. If you have not created a long-term care plan, now is the right time to reach out to a qualified and experienced estate planning attorney to protect your interests. There are many different avenues available to you depending on your personal preferences and your financial situation, but taking a proactive planning approach makes it much easier to protect your wealth.

When planning for your own future, find a Maine estate planning lawyer to guide you through the process.

 

Are You One of the Many Americans Not Financially Prepared for Retirement?

by Estate PlanningFinancesRetirementRetirement Planning

When it comes to your finances and your future, you’ve got to be the one who takes the reins and protects your nest egg. In addition to funding your retirement, those accounts might also become the payment source for long-term care health needs. You and your spouse should both be on the same page about saving for these possible issues.

A recent study of US adults between the ages of 50 and 64 revealed that plenty of Americans do not feel confident about being able to afford health care costs in retirement. Nearly 45% of the survey respondents had low confidence in their ability to afford appropriate health insurance coverage for their potential needs during retirement.

The average 65-year-old couple in 2020 will require nearly $300,000 in today’s terms during their retirement to cover health care expenses outside of long-term care. That number could also fluctuate dramatically based on location, income, health and Medicare eligibility.

The expenses for health care can increase considerably when you consider the possibilities with long term care, given that the national average median cost is $8,821 for a private room in a nursing facility.

Leveraging tools such as long-term care insurance policies and health savings accounts can help to empower retirement savers today with a better understanding of what’s required to protect their own future.

The support of an experienced NH elder law lawyer can help guide you through this process and ensure that you have considered all different aspects of appropriate planning.

What to Consider When Reducing Tax Impacts in Retirement

by Estate PlanningRetirement PlanningTaxes

Looking towards your retirement, you need to think carefully about not just the expenses you might need to pay, but how taxes can impact that landscape. Taxes could reduce the size of your estate that you intend to leave behind for heirs, but they could also influence your overall financial picture.

Investment earnings can be hit hard in your older years when it comes to taxes. An important goal of proper investing is usually maximizing your after-tax returns. Different investments and different kinds of accounts can be taxed differently, which means it is important to consider how you are thinking about the overall growth of your portfolio and the potential tax implications.

Many retirees have established the accounts that are a combination of tax deferred, tax free and taxable. If all of these accounts were taxed the same, then the investor would have no preference into the order in which they would be drawn down.

Because these different kinds of accounts, however, are subject to different types of tax rules and rates, a proper withdrawal sequence is especially important. It is usually recommended, for example, that you withdraw from accounts where required minimum distributions, also known as RMDs, are required.

The second place to tap for distributions are cash flows from taxable accounts followed by tax deferred accounts and then tax free or Roth accounts.

For more information about how your retirement years can be impacted by other unexpected expenses, such as health care expenses, set aside time to speak with a dedicated estate planning lawyer so that you have a comprehensive strategy in place.

Talk to a NH estate planning lawyer today to connect your tax plans to your estate plan.

 

 

 

Is Spending Too Much Jeopardizing Your Retirement Plan?

by Estate PlanningRetirement Planning

There are many different mistakes that you could make in the wake of saving for retirement and ensuring that you have protected your interest as you get closer to 65 or your anticipated retirement age.

As you get closer to retirement, it becomes very important to update your financial plan and ensure that you have a budget established to align with your income sources. As you get closer to your retirement, you’ll want to maximize your individual retirement account contribution in your 401(k) and decrease your spending and debt accordingly. This will help you get a better perspective of your overall financial picture.

Carefully look at anything that might have a double-digit interest rate and eliminate it. Ideally, you don’t want anything that you are paying significant interest on as you get closer to retirement. This could even include one of the biggest expenses in your budget, which is a home mortgage.

If your loan has an interest rate that is over 4.5% this might be an appropriate time to refinance so that you can maximize your budget during the course of retirement. The more you can save and have a plan in place for your own retirement and long term care needs, the easier it will be for you to pass on assets to your loved ones in the future with peace of mind. Schedule a conference to consult with a dedicated estate planning lawyer in your area to learn more about how your long term care plan, your estate plan and your retirement plan are all intertwined.