While few people may find retirement planning “fun,” what it represents is generally positive: a time when you can cease the daily grind of work, set your own life pace, and enjoy hobbies, friends, and families.
Estate planning, however, is most certainly not an enjoyable activity, as it generally involves addressing a time after one’s death. There are good reasons, however, why estate planning should be an important complement to retirement planning. There is enough cross-over in the two activities that it makes sense to engage in them at the same time.
Having a comprehensive estate plan ensures that your assets are distributed according to your wishes, minimizes taxes to maximize what you pass on to your heirs, and prevents court intervention, providing peace of mind for you and your loved ones.
Because retirement planning and estate planning are intertwined, it’s a good idea to work with a financial advisor who specializes in both: this individual can help you arrange your estate in a way that will maximize what you leave to your heirs and minimize the work they will have to do in the event of your death.
Some elements to consider when planning your estate include:
Whether you will create trusts. There may be a variety of reasons to create trusts. In the case of dependents, you may wish to set up trusts that will ensure they have enough money to finish school, train for a career, or reach a certain age before they can access an inheritance. For family members who require special help or care, a trust can ensure that the care is funded for the rest of their lives.
Minimizing tax burdens. Improper estate planning – similar to improper retirement planning – can expose you to the risk of paying more taxes than necessary or leaving less to your heirs. A professional advisor can address strategies for both retirement and estate planning to ensure that you are minimizing your overall tax burden.
Protecting personal assets from business losses. As a business owner, you’ll know that retirement or death does not end the possibility of lawsuits against your nest egg or your estate, particularly if you operated a business in a high-risk category such as healthcare or construction. A careful estate plan will protect your assets from lawsuits that might be filed after you’ve retired or after you have passed away, protecting both your retirement funds and your heirs.
Integrating Retirement Planning and Estate Planning
In your financial planning, you may tap the resources of a financial advisor, a tax professional, and a lawyer. Are these professionals working together to ensure that your retirement planning and your estate planning are complementary? Ideally, retirement professionals, estate planners, accountants, and attorneys should all work together to produce an all-encompassing personal financial strategy.
At Toomey Investment Management, we understand the importance of a cohesive approach to your financial future. By integrating retirement planning and estate planning, we help ensure that all aspects of your financial life are aligned and working together. Let our experienced team guide you through a seamless strategy that meets your unique needs. Contact us today!