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Retirement & Estate Planning
By Deana Crawford Arnett, CFP™
According to the U.S. Census Bureau, people today can expect to live
longer in retirement than ever before. Increased life expectancies
mean we’ll all probably have to do a better job of planning our
retirement and protecting our estate assets than previous
generations. Working out a sound financial plan now—before you need
it—can help accomplish retirement and other important financial
goals.
Retirement Planning
Creating a financial plan can help ensure a comfortable retirement.
In drawing up your plan you’ll have to review your:
- Anticipated costs of living during retirement
- Current retirement assets
- Current retirement savings and investments
- Expected rates of investment and present and potential
inflation rates.
Once this information is determined, any shortfall between
projected retirement income and anticipated costs of living during
your retirement can be calculated. It’s important to plan so that
you have enough assets to get you through, not merely to,
retirement. A comprehensive retirement plan might include elements
such as:
- 401 (k) plans
- Roth or traditional IRAs
- Education savings plans
- Life insurance or annuities
- Tax-advantaged investments.
Estate Planning
Most of us already know that our estate includes every asset and
debt we have. However, few of us probably also realize that:
- Federal tax rates begin at 37% and rise to 48% for estates
valued at $1,500,000 or more for 2004
- Estate taxes are due within nine months of death.
To help meet estimated future needs, typical financial plans
often employ the following strategies:
- Updating current estate plans
- Titling assets to maximize credit available against federal
estate taxes
- Purchasing life insurance to cover estate tax and settlement
costs
- Establishing certain irrevocable trusts, which may help remove
assets your taxable estate
- Making gifts of $11,000 or less to reduce the value of your
estate.
In short, talking with a financial and tax advisor regarding the
adequacy of current estate and retirement plans is an essential
first step for anyone interested in leaving behind a lasting
personal and financial legacy.
To Find Out More
In today’s increasingly complicated business and investment
environment, having a professional financial advisor is no longer a
luxury—it’s rapidly becoming a necessity. For more information on
how professional investment advice can help you to make the most of
your capital, please write in care of Deana Crawford Arnett, CFP™,
Morgan Stanley, 1650 Tysons Boulevard, Suite 500, McLean, VA 22102.
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