Many people think of retirement funds as monolithic resources. That’s understandable. After all; we work for years socking away money for the future. Unfortunately, though, rising healthcare costs can erode even the largest retirement account. Retirement accounts typically form the largest portion of most estates. So, set up proper management to handle your fund.
The Retirement/Estate Planning Connection
First, ensure your assets will sufficiently care for yourself and your family. Increased healthcare costs mean sacrificing some retirement monies to cover future medical expenses on a fixed income.We all hope for a quiet retirement. But in an unexpected situation, financial management is stressful. Budget a financial strategy to keep you comfortable during retirement. Also, work with a financial advisor to develop a strategy for distributingany leftover funds upon your death.
Taxation & Retirement
Rules surrounding the taxation of retirement accounts confuse most of us. This often complicates potentially stressful retirement experiences. In most cases, after retiring, you will take a required minimum distribution, which will be subject to income tax. Most people understand this deduction because income tax withholdings routinely deduct from their paychecks. But sometimes, they overlook that they will face a similar tax liability on their retirement accounts.
Tax Consequences
It is also important that your strategy for passing on the account takes into consideration the tax consequences. These accounts come with pre-tax contributions. So, the required minimum distributions made to the owner are subject to income tax. When these funds are distributed to a designated beneficiary after the owner’s death, there are still income tax concerns regardless of who is named as the designated beneficiary. It’s why working with a trusted financial advisor and attorney is so important to enjoying your golden years. With these experts on your side, you’ll rest easy knowing you’ve taken care of your family in the present and future.
Aligning Estate & Retirement Plans
Ultimately, you will benefit most from ensuring your retirement plan and estate plan align. By working with your trusted financial advisor and us, you can ensure the goals you have for your retirement and for your estate do not contradict one another. For example, you may have designated one beneficiary for your account when you signed up for your 401k but may now wish to change who or how the beneficiary will receive your assets upon your death. Or, you may have originally anticipated the excess funds from your retirement account being used to care for an aging loved one, but due to the market, you may need to find additional sources to cover these anticipated expenses. Meeting with your financial advisor and us is crucial to making sure your family and loved ones are not stuck in financial hardship after you have passed.
Asset Protection
When it comes to retirement, it can be difficult to know what you do not know. If you are concerned about the state of your retirement account, assets and estate plan, schedule a meeting with your financial advisor and ustoday. With so much on the line, it pays to do your homework, connect with professionals and ensure your final wishes are documented and respected.
About Skvarna Law Firm in Glendora and Upland, California
A skilled attorney can assist with your estate plan. Contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
