Crafting a financial plan for your later years is vital, aiming for a future where calm and assurance let you savor your work's rewards worry-free. The stage of your career, whether you're just embarking on your professional journey or nearing its completion, does not diminish the urgency of beginning your retirement planning right away.
By: Kyle Rutten BrestelBucar.com
Talk to any Estate Planning attorney and they will tell you, “plan your estate or the state will plan it for you.” Having the state handle this process has several downsides that are very much worth being aware of. First, this will gum up the process of disbursing your estate. This process is known as Probate Court and can be extremely slow, stressful, and expensive if not adequately planned for. Second, the disbursement of your estate is likely to be far from ideal if directed by the state and often leads to a financial struggle for your heirs, in-fighting within the family, and other difficulties.
Step 1: Execute a Last Will
The first step to planning your estate is to execute a last will. In this document, you will assign a person to oversee the probate process. You will also leave explicit directions on how your estate, debts, and guardianships will be handled. This is probably the most critical aspect of an estate plan and should be priority 1 in the process. A last will can ensure that your children are properly cared for, your funeral costs are covered without burdening your family, and your debts are managed in a way that is fair and avoids arguments within your family.
Step 2: Consider Implementing a Living Trust
A living trust is similar in many ways to a last will. However, these documents come with some additional upside, particularly for business owners and high net-worth individuals. It’s best to chat with an attorney if you suspect a living trust would be beneficial for your situation. Estates managed by a living trust can even avoid probate altogether, making for a quick and smooth process that takes many burdens off of the shoulders of a grieving family.
Step 3: Get a Life Insurance Policy
Life insurance is a fantastic way to be a massive help to your family in the event the worst occurs. Life insurance can assist with estate taxes, outstanding debts, and even provide an income for your spouse in the event of your death. This is a process that is absolutely worth the headache so don’t delay.
Ideally, you want to take the time to do due diligence and research the best life insurance policy for your specific needs. It can be tricky to figure out where to begin, especially if you are not familiar with life insurance policies. Experts recommend narrowing down your result by term lengths, based on your age or health. For instance, if you are looking for specific term lengths, reading Forbes’ Primerica reviews can help you figure out more about the different options available. As a rule of thumb, Forbes advisor is a fantastic source of information if you are just at the start of your search.
Step 4: Name a Beneficiary Wherever Possible
On just about any type of financial account including bank accounts, investment accounts, and retirement plans, you can name a beneficiary. The beneficiary is typically the individual who takes control of the account in the event of your passing. Naming a beneficiary on these accounts is the quickest way to get funds where they need to go. Not only that, but it allows finances to avoid getting tied up in probate and causing undue stress for your family.
Don’t Put Off an Estate Plan
Planning for the end of our lives is one of those things we’d all prefer to avoid. However, it is too often the case that families are left in a lurch because this wasn’t considered soon enough. By starting with the four simple steps above you will be well on your way to having much more protection in place for your loved ones.
In most cases, speaking to an estate planning attorney is the best place to start. An attorney will walk through your specific circumstances and draw up a plan that covers all of your bases.
The biggest question that people have about saving for retirement is, ‘where should I put my money?’ Most people understand that it is important to start saving for retirement early on so you can make sure that you have enough money set aside. They also know that a dedicated retirement account is the best way to do this because you get a lot of tax benefits. However, most people are unclear about which kind of retirement account they should put their money in.
The most common options are IRAs and 401ks, and there are pros and cons to each. There are also a lot of alternative investment options that could help you out during retirement, like real estate, for example. It is important that you consider what kind of lifestyle you want, and how you want your money to be handled. If you don’t know where to start, these are some of the most important things to consider when deciding where to put your retirement savings.
When Do You Want To Be Taxed?
When you consider different options for an IRA, you need to decide when you want to be taxed on that money. When you put your money in a traditional IRA, you will not pay any tax on your contributions. However, when you take the money out, you will be taxed on it. A Roth IRA works in the opposite way, so you will be taxed on all of the contributions that you make, but when you retire and start taking the money out, you will not have to pay any tax on it.
When deciding which option is best, it is important that you consider what your situation will be when you retire. If you expect to be in a lower tax bracket after you retire, which a lot of people will be, it will be better to pay into a traditional IRA because you will pay less tax overall. However, if for some reason you think that you will be in a higher tax bracket when you retire, you should put your money into a Roth IRA. A large tax bill on your withdrawals after you retire can make things very difficult for you.
How Much Control Do You Want?
Some people are happy to put their money into a retirement savings fund and watch it grow. They are not that concerned with the level of control that they have over the investments that are made. However, some people prefer to have full control over their money, which is where a checkbook ira can be effective. These are retirement accounts that are invested in an LLC, which you have complete control over. You will be given a physical checkbook and your IRA funds can be used as a checking account for the LLC, which means you have complete control over the money. If you are experienced with investing, this is often the best option because it allows you to hold other investments, like real estate, within your IRA.
Are There Any Contribution Limits?
An IRA has an annual contribution limit, which you need to check before you make your decision. In 2020, your annual contributions cannot exceed $6000.00, or $7000.00 for people over the age of 50. If you cannot afford to contribute more than that, you don’t need to worry. However, you are limiting yourself if you are able to contribute more than the limit. In that case, you should look into your options for employer-sponsored retirement plans, like a 401K, because they have much higher contribution limits. The current limit for an employer-sponsored account is $18,500.00. There is also the chance that your employer will match your contributions, so you will earn a lot more for retirement.
Other Alternatives To Retirement Accounts
When making your decision, it is important to remember that retirement accounts are not the only place to put your money, and you need to think about some of the alternatives. You could put your money into private investments like stocks and shares, real estate, or even cryptocurrency. In some cases, you may see much bigger returns if you invest your money in one of these ways. However, the risks are a lot higher and if your investments don’t pan out, you will be in a difficult position when you retire. Often, it is a good idea to use a combination of retirement accounts and alternative investments.
As long as you consider all of these factors, you will be able to pick a retirement account that works for you.
Most people don’t start thinking about their retirement until they get a bit older, but the earlier you start planning, the easier it will be. Even small contributions now will make a big difference a few decades down the line because you will earn compound interest, so don’t think that you have to wait until you have a higher income until you start saving.
If you haven’t thought about it yet, you should read this quick guide to retirement planning so you can get started. Once you do start putting money aside, you need to start thinking about what to do with it. If you just leave it in a savings account, you won’t see it grow and it may not be enough to live on once you retire. That’s why investments are so important because you can make your money work for you and watch it grow over time.
There are a lot of different investment options out there, but if you are looking for somewhere to invest part of your retirement fund, you should consider cryptocurrency. It’s a very popular investment at the minute and you could earn a good return if you manage your money wisely. But if you get it wrong, you stand to lose a lot. If you are considering investing in cryptocurrency to help fund your retirement, here are some tips to help you get started.
Always Do Your Research
Before you start putting your money into cryptocurrency, you should do your research. Luckily, there are plenty of resources out there. Bitcoin is the original, and still the most popular cryptocurrency, so that’s the best place to start. Bitcoin has taken off so much that you can even find a Bitcoin guide in Spanish, so you shouldn’t have any trouble finding resources in English. Spend some time reading all of the tips that you can find and looking at past market trends so you can get an idea of how best to invest your money.
Use A Robo-Advisor
Robo-advisors are financial advisors that use software to analyze market trends and then give you advice online. If you are taking the advice of a good cryptocurrency robo-advisor, you are far less likely to make any big mistakes with your money. It’s the best way for beginners to get started, but keep in mind that the advice isn’t always guaranteed to be right, so don’t just blindly follow what your robo-advisor tells you.
Start Small
One of the great things about cryptocurrency investing is that you can get started with a tiny amount of money. Before you start making any big trades, it’s important that you have a good grasp of how the markets work and how they fluctuate. The best way to learn is by making some small trades, and if you lose out, it doesn’t matter too much. Once you are more confident with it, you can start increasing the amount and trying to make some real profits.
Trading cryptocurrency can be a good way to boost your retirement fund, but keep in mind that it’s quite unpredictable, so you should only put a portion of your savings into it and put the rest somewhere more secure.
Retirement can feel like such a long way into the future, and something we don’t need to be thinking about now. But as we all know, time moves quicker than we realize and before we know it we’ll be well on our way to hitting that retirement age. Sometimes this realization should prompt you to think about how to prepare in advance and what you might do. Do you have a plan in place? It’s a new chapter in your life, after all, and one you certainly don't want to waste.
Of course, there is so much to think about, and it can actually be a very exciting time in your life. A chance to take on new hobbies, a chance to travel maybe, or spend time with your loved ones. There are so many things that you can plan. With that in mind, here are some of the ways you can put together your own retirement plan. Safeguarding those golden years ahead.
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What do you plan to do with your time?
How do you plan on spending your time? Perhaps you might want to travel and see and experience new places. You may have created a bucket list and see retirement as the perfect time to tick those places off your list. You may want to consider cruising or seeing the world in a different way.
Retirement is also a great time to take up new or existing hobbies. It’s a great chance to be more sociable and make new friends. You may find the prospect of time on your hands daunting, but don’t waste it by being overwhelmed, instead be excited about what this chapter in your life means for you.
What are you considering for your care as you get older?
As you get older, things might be difficult when it comes to taking care of yourself in your home. It’s a fact of life and one we must grow comfortable with sooner rather than later. Thankfully, there are services that offer senior care in the home that could make this stage in your life a little easier. Some people don’t want to leave their homes, and that is understandable.
After all, you may have loved a huge chunk of time there and feel comfortable, safe and at ease. This is when mobile aids and adaptations in the home can make it easy. Don’t just assume that you have to move out once you get to a certain age, in many situations, this isn’t the case.
What finances are in place to fund your lifestyle?
Retirement means no more work or at least any full-time employment. So the big question is what do you plan to do for money? This is where preparation can help you get ahead of things. Will you rely on property and investment? This might mean just the home you live in and paying off the mortgage owed, or it might mean buying a few different properties to earn an income. Do you plan on investing your savings? This might mean in high-interest savings accounts where you have to leave it for a set amount of time.
Or investing in stocks and shares. All with a little risk attached. You might want to consider a pension. Some employers have a pension scheme that forms part of the benefits attached to working for that company. But there is also an option of setting up your own personal pension plan that can be more lucrative. There are many options to explore, but the earlier you do something, the better off you will be in the future.
Meanwhile, exploring options like an annuity can be a smart strategy for funding your retirement lifestyle. An annuity, especially when designed to provide a steady stream of income, offers a reliable and predictable source of funds throughout your retirement years. Whether you go for a fixed annuity that guarantees regular payments or an indexed annuity tied to market performance, these financial tools can contribute to covering essential expenses and supporting the lifestyle you envision. You may learn more about annuity rates to tailor a plan that aligns with your particular retirement goals.
Do you have a will in place?
No plan would be worthwhile without having a will in place for when you are no longer here. It doesn't have to be a gloomy affair to put something in place, but it offers you peace of mind that you have noted down your wishes for the future. You can easily create one yourself by following many of the Will Templates that you can find online. They can help you to itemize your assets and also note down your wishes and last thoughts.
Hobbies and other things to do
Finally, the retirement period is a time for you. No longer will you have the commitment of a workplace or something you have to do. If you plan right, the income will be comfortable and you can afford to live your life the way you want. Is it time to take on new hobbies? Socialize and make new friends? Perhaps even start something you tried before and never had the time to do.
Let’s hope this has given you some food for thought when it comes to plans for retirement.
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