You don’t know how long you’ll need your retirement money to last or how much your investments will earn. Ideally, you’d like to be able to live off your investment earnings, so you’d better have plenty of savings. Most planners recommend that you expect to live 30 years in retirement.
There are many different ways to invest, and many different types of things to invest in. Some people choose stocks, bonds, or mutual funds, while others primarily invest real estate. A smart investor knows that portfolio diversification is key, and that caution and research are always the best approaches toward any type of investment, as well as advice from an expert financial planner. This article outlines some basic tips and guidelines to help you make smart investment decisions, but is in no way intended to substitute for advice from a financial professional.
Overview
An estate tax is the amount of taxes owed to the federal government upon your death. Your family’s tax liability will depend on two things:
What Is A Trust?
A Trust is essentially an agreement, or legal arrangement between the settlor or grantor, and the trustee. The settlor, also known as a grantor, agrees to transfer certain assets to the trustee and the trustee agrees to hold those assets for the benefit of named beneficiaries. In the past, trusts were used almost exclusively by wealthy families as a way to guard their assets from public scrutiny and also ensure that their assets were protected. Nowadays, people from many different income brackets are taking advantage of the benefits offered by a properly planned trust.
A living trust can be an important estate planning tool, but it is also a very precise one. This means that if one or more crucial components are missing from your living trust package, your financial goals will not be adequately met. Just what are these crucial components? Read on to find out.
1. Keep your will or trust up to date.
Many state laws invalidate any will made prior to a major life event, such as marriage, divorce, moving to a new state, or the birth or adoption of a child. Keep your legal residence address, marriage status, beneficiaries list, etc. updated.
When it comes to your retirement, you shouldn’t settle. Your retirement is your responsibility, and if your company’s plan is insufficient or nonexistent, you’ve got to find a way to make up for it.
Fortunately, you can solve the problem by turning to the other tax-advantaged investment options: individual retirement accounts (IRAs), SEP-IRAs or Keoghs (for the self-employed) or, in some situations, variable annuities. Here’s a breakdown of how each option works:
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Married couples have the most flexibility when it comes to claiming Social Security benefits. Knowing when and how to collect benefits can increase a couple’s lifetime retirement income by $100,000 or more.
Thinking about working beyond normal retirement age? Think twice.
Concerned you have not saved enough for retirement? Working longer and postponing retirement may solve several concerns – employed people continue to earn income and have a longer time frame to build their nest egg; also, during the time they are working, they are not drawing down funds from that nest egg as they would if they were retired. The third advantage comes if they decide to delay collecting Social Security benefits. An individual who waits until age 70, for example, collects an extra 32% in benefits compared with someone claiming Social Security at their normal retirement age of 66. On paper, it looks like a good idea. The problem is that for many people, life doesn’t work out according to plan.
If you are in your 20’s, chances are you are most likely not thinking about retirement or financial stability. While it may be very difficult to shift focus on future financial planning, the sooner you begin to take small steps in this direction, the more secure and stable your future will be. Get a good start with these very easy and smart planning tips.