Proper planning is all about thoughtful planning for the now, for the later, and for the “after I’m gone” stages of life. So be diligent about your everyday finances, and plan for your final estate since you never know “when.” While you are at it, also consider your retirement and end-of-life finances. To keep things on an even keel it pays to consider taxes in structuring your late-in-life finances, and even more so to limit those taxes.
There are a lot of variables in play when it comes to budgeting for retirement, to include ever lengthening life-spans and ever increasing medical bills. No one said it would be easy. One variable you will not want to ignore is taxes and how they will affect you.
For some advice on how to make the finances last, and how to preserve wealth both for yourself and your heirs, be sure to read a recent article in Morningstar titled “6 Ways to Curb Taxes in Retirement.”
The six ways? Roughly:
Tip 1: Diversify Your Assets by Tax Treatment
Tip 2: Consider a Roth Conversion–Even in Retirement
Tip 3: Get Savvy With RMDs
Tip 4: Mind State Taxes, Too
Tip 5: Bundle and Time Your Deductions
Tip 6: Avoid the 'Tax Torpedo' [i.e. Social Security tax payments]
After you have read the original article, consider your own finances, or those of your elderly loved ones. Retirement is an important stage in life and one requiring careful financial planning so you do not outlive your money. Taxes are a major threat to your retirement financial security. How do your end-of-life finances coordinate with your plans for your estate? That is the next question, of course.
You can learn more about this topic as well as other strategies on our website under the tab entitled: elder law planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Morningstar (March 1, 2014) “6 Ways to Curb Taxes in Retirement”