Many Americans begin considering retirement as they enter their 60s, but not everyone is truly ready to stop working by 63, the average retirement age according to the United States Census Bureau. There’s a lot to consider, including assets, debt, retirement needs, and estate plans. This checklist should help those entering retirement age decide if the time is right.
Assess All Assets
The first thing prospective retirees should do is figure out where they stand financially. A good way to start is by taking stock of all financial assets and liabilities, including income streams, savings, debts, and insurance policies. Determining whether it’s the right time to retire will be much easier once a clear, honest financial inventory is established. And since income will be lower during retirement, it’s ideal to stop working with as little debt as possible. Those preparing to retire should try to pay down their loans and mortgages.
Put Together an Emergency Fund
It’s always wise to prepare for the unexpected. Preparing an emergency fund for a medical or property-related catastrophe should be part of anyone’s retirement plan. While experts recommend setting aside up to a year’s worth of living expenses as an emergency fund, around six months’ worth should be sufficient. Emergency funds should be kept separate from other savings so that it’s less tempting to spend the money unnecessarily.
Determine Retirement Needs
No two retirees will have the same lifestyle. Some continue working in a part-time job, while others want to spend more of their hard-earned money on home upgrades or vacations. No matter what a person’s retirement goals are, they should have a realistic idea of what kinds of expenses and possible incomes will be part of the retirement equation.
Do Some Estate Planning
No one wants to start thinking about estate planning, but retirement is a great time to decide on how affairs and financial matters will be handled end-of-life. It’s better to have a plan in place than to saddle family members with confusion and financial burdens down the road. Looking at it positively, once everything has been settled and notarized, retirement will be much less stressful, as many important decisions will have already been finalized.
As you begin checking off your retirement checklist, the attorneys at Doran Sims Wolfe Ciocchetti & Yoon can assist you with estate planning services for you and your loved ones. We have over 40 years of experience assisting clients with estate planning, family law, personal injury cases, and more. To schedule a free consultation, contact us online or call (386) 868-2157 today.
Establishing a living trust can help ensure that finances and estates will be distributed according to the creator of the trust’s wishes after their passing. Here are the basics of living trusts and how to begin the process.
What is a Living Trust?
A living trust is similar to a will in that it outlines what will happen to possessions, finances, businesses, and anything else a person owns when they pass away. A living trust is a legal entity that a person’s assets are transferred to, allowing individuals to direct the management and distribution of anything the trust covers. Because the trust itself legally owns the assets, the assets can be transferred without going through the probate law process.
Determining the Type of Trust
There are multiple types of living trusts, so one must first determine which type best suits their needs. The two main types are revocable and irrevocable trusts. Revocable trusts are much easier to navigate, as they can allow the creator of the trust, called the “grantor,” to retain complete control of their assets and property for the duration of their life. An irrevocable trust, on the other hand, requires permission from everyone named in the trust before it can be modified. In addition, married couples must decide whether to use two single trusts or opt for a joint trust, which may be easier for those with joint properties or bank accounts.
Before contacting a lawyer, the grantor should take inventory of all of the assets that they want to be transferred to the trust. This includes savings accounts, real estate, vehicles, stocks, and family heirlooms. They should bring any paperwork related to these assets to the initial meeting, including home deeds, car titles, and stock ownership certificates.
Select a Trustee
Before a living trust can be completed, the grantor must name a trustee, who will be responsible for managing the assets in the trust. The grantor may choose themselves to be the trustee, which is common in revocable trusts. However, if they choose this option, they must also select a successor trustee to take over management of the trust after their passing. This successor will be responsible for ensuring that all assets in the trust are properly distributed to the beneficiaries according to the instructions laid out in the trust.
Creating the Trust
After deciding which assets to transfer to the trust and selecting a trustee, the grantor can create the trust document with the help of an attorney and sign it in front of a notary public. After this final step, assets can be transferred into the trust.
In Florida, establishing a living trust has many financial and logistical benefits. For more information about the estate planning process, call Doran Sims Wolfe Ciocchetti & Yoon at (386) 868-2157 for a free consultation.