5 Smart Retirement & Estate Planning Tips

Each year brings you closer to the day you can retire and enjoy the rewards of your hard work. While retirement has its perks, uncertainties about healthcare costs, income stability, and your financial legacy can cause unease. Creating a retirement roadmap and estate plan today can help you avoid financial troubles in the future.

Here are five retirement and estate planning tips that will help you map out your later years with confidence and ensure your loved ones are protected.

• Diversify your investment portfolio. Reduce risk and optimize potential returns by investing money across asset classes such as stocks, bonds, real estate, and commodities. This helps create a balanced portfolio that reduces the impact of market volatility. Regularly review investment performance to determine if you need to make portfolio adjustments based on your risk tolerance and retirement timeline.
• Understand how taxes impact retirement savings. Minimize the taxes you pay on retirement savings and income by choosing the appropriate combination of retirement accounts, such as traditional IRAs, Roth IRAs, and 401(k)s, along with tax-efficient investments. Detailed planning can ensure that more of your money supports your desired retirement lifestyle.
• Consider retirement healthcare costs. A recent Employee Benefit Research Institute (EBRI) report found that couples may need as much as $413,000 in savings to cover health expenses during their retirement years. Long-term care insurance is worth considering since it covers the costs of extended care services, such as nursing home care, assisted living, or in-home care. Buying long-term care insurance while in good health could save money and ensure access to quality care when needed.
• Create an estate plan. A comprehensive estate plan includes legal documents that outline your wishes for your assets and healthcare decisions in case of incapacity or death. A will, power of attorney, healthcare proxy, and living will are essential documents that work together to ensure that your assets are distributed according to your wishes and that your healthcare preferences are respected.
• Schedule time to review and update your estate plan. It’s important to review your estate plan yearly and make necessary updates. Major life changes, such as births, deaths, marriages, divorces, or substantial changes in assets or liabilities, should trigger an automatic review. An up-to-date estate plan ensures assets are distributed according to your wishes and reduces potential conflicts or legal issues.

As you navigate your financial future, consider taking a look at SAFE's Life Stages webpage for resources and helpful information to help you plan for life's milestones including retirement and Estate Planning.