By Linda T. Cammuso

Hand writing the text: Whats Your Plan for Retirement?

Many American workers today are postponing retirement until 70 or even longer. While a variety of factors enter into their decision, approaching retirement at any age creates both an opportunity and a need to consider (or reconsider) implications for your estate plan.

For starters, transitioning into retirement allows you to more accurately assess your goals and desires around long-term care planning.  Whether you’re a single individual or member of a couple – married or otherwise – entering this new phase of your financial life will give you new perspective on the longer term outlook for your estate and the scope of your financial exposure should a need for long-term care in a nursing home setting arise.

For many people, retirement also brings about newfound organization and streamlining of finances, particularly so-called “qualified” or “pre-tax” accounts (IRAs, 401(k)s, 403(b)s and the like), which are often consolidated.  Owing to the emphasis in recent years on the uncertain future of the social security system, coupled with delayed retirement, many people find their estate to be heavily concentrated in these types of accounts.  While good vehicles for retirement saving, pre-tax retirement accounts make notoriously awkward vehicles for long-term care and inheritance planning.

While discussions about retirement planning typically take place with financial advisors, having an attorney as part of the planning process is important.  An attorney who specializes in estate planning can guide you and your financial professionals through many considerations that include:

  • Ensuring beneficiary designations  are in concert with your wishes and consistent across all investments and assets
  • The applicability of transfer tax issues such as estate taxes and the Generational-Skipping Transfer Tax (GST)
  • The need to hold assets in trust for beneficiaries who should not receive distributions such as a special needs individual or those with other financial, legal or health vulnerabilities
  • Balancing optimal income tax planning with blended family dynamics
  • Balancing optimal spousal income tax planning with long-term care protection goals
  • The role of trusts and related income tax implications

Whether you are retiring at 65 or postponing retirement into the future, if you have not met with an attorney who specializes in estate planning you are not fully prepared to meet the challenges facing you. Don’t postpone getting your estate plan in place. At EPLO our attorneys have the expertise to develop sound estate plans that uniquely address your retirement lifestyle dreams and situation.

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