The Motley Fool recent published an article, “3 Things Every Good Retirement Plan Includes,” which can really help your retirement planning.
Tax planning. Attaining your retirement income goals won't help much, if you're paying too much of that income to the federal government. Working tax planning into your overall retirement plan can really increase your options. For example, creating nontaxable sources of retirement income won’t just lower federal and state income tax bills, but it can also help ensure that Social Security benefits aren’t taxed. Consider a Roth IRA because its tax benefits are the opposite of a traditional retirement savings accounts. You don't get a tax break on your contributions, but the money you withdraw from the account is tax-free. The dividends and interest you receive in your Roth are never taxed.
Healthcare planning. This is a big issue for retirees, because as we age our medical issues and their costs will invariably rise. When you reach age 65, you can enroll in Medicare, but it doesn't cover some of the health-related expenses you're quite likely to see. Long-term care is probably the most significant and most potentially expensive health issue that is not covered by Medicare. To insulate yourself from potentially exorbitant long-term care expenses before you retire, purchase a long-term care insurance policy. The earlier you buy the insurance, the lower your premiums will be.
Legacy planning. If you have a family, you should work with an estate planning attorney to set up an estate plan. At age 70½, you'll have to start making required minimum distributions (RMDs) from your traditional IRAs. Roth IRAs are not subject to RMDs, which makes them a great estate planning tool.
Life insurance can also be a useful estate planning tool because the money your heirs receive from these policies isn’t taxed. It can also be a great choice, if you don't have many assets to leave to your family, or if you have a lot of debt and don't want to burden your beneficiaries with it after you die.
If you're looking for support regarding your estate and elder law needs, we offer a free educational workshop. Consider joining us at the next event. Just RSVP here and we'll save you a seat!
Jeffrey Bellomo, Esq.
Reference: Motley Fool (November 5, 2017) “3 Things Every Good Retirement Plan Includes”