By Ryan Velez
In the new year, there are many different areas where you may want to improve, financial planning included. It’s easy to fall into the trap of just thinking that “I’ll put some money into this investment here, and some money into that investment there, and see what happens.” A recent article from The Network Journal suggests that you need to put together your financial plan(s) with one end goal in mind—making sure your outcome in retirement is exactly what you want. They offer several tips for 2017 that are essential for those within 10 years of retirement or already retired.
One of the easiest ways to get more out of the money you have in your retirement years is proper tax efficiency. Be certain that your tax advisor has the necessary qualifications to find ways that will help keep your taxes low. A Roth conversion, municipal bonds or possibly annuities may be the method that works best for you, but you won’t know without the support and advice of a professional. Try not to just see your CPA once a year to see what you owe. Instead, take a proactive approach in 2017.
Another important thing to do is see how much you spend from month to month. There are several software programs that will chart your expenses, or you can choose to use your bank statements to paint a picture. The end results will likely shock you, and not in a positive way, but this is a necessary thing to see pre-retirement. Along with painting an accurate picture of your personal lifestyle, this will enable you to save in certain areas so that you will be able to enjoy retirement by traveling or seeing family without putting yourself in dire straits.
Part of financial planning is also preparing for the worst or the inevitable. While you may have a nest egg, it’s difficult to understand how much long-term care can impact your savings. One option is to try and set up annuities to keep yourself covered during a health crisis while still having access to your money. If you stay healthy and don’t need the money, your savings can be passed on to your beneficiaries tax-free. The second order of business is dealing with wealth transfer. Be sure to use a qualified attorney or professional to create an estate plan that ensures your unspent money goes to your children, loved ones, or chosen charity. There are several different options, including a living trust, crafting a will, buying life insurance and/or creating an inherited IRA. Make sure your network of financial professionals is working together to keep your taxes low on those who inherit your money.