3 Tools for Smart Retirement Planning

Although retirement and estate planning are often considered separately, they actually overlap quite a bit. You can use some of the same tools to help you retire comfortably as you should use for your estate planning. We have set out just a few examples that may work for your unique family and financial situation below.

  1. Traditional IRAs, 401(k)s, and other retirement plans

Retirement plans are arguably the best way to prepare for retirement because that is what they are designed to do. However, these tools are also helpful for estate planning as well. You can designate a specific person for a retirement plan if you do not use all of the funds in the account.

You should periodically ensure that your beneficiary information is up to date as part of your periodic estate planning review and update.

  1. Roth retirement plans

Roth IRAs are a great way to plan for retirement, but they also have some estate planning benefits as well. For example, Roth IRAs do not have required minimum distributions, which means that you can take out money as you need it, or you can let it sit to be distributed to your beneficiaries after you pass. It will continue to grow as it remains in your account. Your heirs will have to take the required minimum distributions, but they are tax-free as long as the account has been open for at least five years.

Income from Roth IRAs is also not considered when you determine the amount of Social Security payments you can receive. It also does not affect your modified adjusted gross income, which means that the payments also will not be subject to the Medicare investment surtax, either.

  1. Creating a trust

A trust is a legal entity that has a set of instructions you create to pass on assets to beneficiaries. Although it cannot do some of the same things as a will, the concept is very similar. They are very common estate planning tools because they allow you to control your funds long after you have passed.

An individual retirement trust can be created to get the benefits of an IRA, with the control over the funds after you pass like a trust would allow. You can explicitly set out how beneficiaries can use your retirement funds, and your loved ones can also bypass some of the more complicated tax requirements that the IRS imposes on receiving your retirement funds.

Getting Help with Planning for the Future

Saving for retirement and estate planning often go hand and hand. To create an estate plan that complements your retirement plan, contact Legacy Planning Law Group. Set up an appointment by calling (904) 880-5554.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.