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

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

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?

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.