The Nitty-Gritty Of Retirement And Estate Planning
There are two inconvenient things in life we can not avoid: death and taxes. Dealing with it is not easy that is why we should have a sound plan in facing these two inescapable realities. Retirement and estate planning can be very valuable in overcoming the difficulties that will face us come our golden age. Having such a plan can help us in providing a better lifestyle for ourselves when we retire and for our loved ones when we pass away. A retirement plan is a strategy of saving and earning money for our future comfort when we retire. We can not rely anymore on social security benefits, what we have to do is take the responsibility of saving enough and investing early while we still have jobs today. There are numerous ways and strategies in preparing for retirement. Number one of these is to ask for advice from your retirement planning advisor. Surely, he will give you great retirement planning tips, ideas and suggestions on how to increase your wealth and double your savings come retirement years. Another option is to take advantage of the numerous offers of insurance companies. You may opt to get an annuity, a long-term, financial contract offered by insurance companies. Annuities can give you great earnings from your investment and will definitely create savings for your future comfort. After completing your payments on your premium, you can receive annuities from the insurance company for a fixed period or it also can last until you kick the bucket. Whats more, all accumulated income from annuities are tax-deferred as mandated by the US Congress. Another option open for retirees is the Modified Endowment Contract (MEC). A MEC is just like annuities but it has additional perks and advantages for the retiree and his or her beneficiaries. MEC is a type of life insurance policy. It is tax-free during the buildup stage of your premium, you can also withdraw from the fund in times of emergencies, and when you die, a MEC can make payment to your heirs tax-free. With MEC, you can do two things in a single policy: retirement and estate planning.
Retirement and estate planning particularly estate planning is your way of providing a comfortable life for your loved ones when you die. Through this, your family can avoid the rigorous process of court settlements and you decide properly the distribution of your wealth. In planning for your estate, your should always consider the staggering taxes imposed on monetary and real property inheritance. Some states impose as high as 46-50% on inheritance taxes. There are simple steps that you can make, while youre still alive, which can simplify your estate planning. First, consider giving an annual gift to your children. Gifts are tax-free if it does not exceed $12,000.00 given by a person to anyone he likes. You and your partner can give an annual cash gift for as much as $24,000.00 for each of your children completely tax-free. Isnt this a great way of telling your children how much you value them? Another thing you should do is to set-up a Living Trust. A Living Trust will smoothly facilitate the transfer of your assets to your loved ones in complete privacy. Any estate attorney can help you make a Living Trust and it will cost you around $2,000.00 depending on the size of your estate. Lastly, the best way to prepare your loved ones is to talk to them and make amicable arrangements and agreements with them on how to divide your property. |
