According to multiple money experts, America is facing a retirement crisis. Many do not have enough savings and Social Security benefits will not be able to cover the cost of living of most Americans in retirement. Unfortunately, many people prefer not to talk about death so they refuse to think about estate planning for the welfare of those they leave behind.
Yet, death is inevitable and whatever you own should be protected to ensure that the people you love are taken care of according to your wishes. According to Greg Stevens of Cabot Wealth, “everyone needs a will.” He adds that the will should be updated regularly. This is one way to transfer wealth and assets, health care, and other proxies smoothly to the next generation.
The average retirement period is about 18 years but it can last as long as 30 years so you need to have a financial plan for at least 20 years
For a monthly budget of $5,000 during retirement, you should have around $1 million in savings or assets. Having assets will help those you leave behind enjoy the same comforts after you’re gone.
Social Security, which many retired Americans rely on, is running out of funds.
The most common reason for neglecting to make retirement plans is, “I am too busy.” Then, it’s too late. Retirement is not a pleasant discussion. It can lead to arguments and stress at a time when most people don’t want or need it. Stevens adds that being busy is a poor excuse because retirement will eventually happen and without an estate plan, the quality of life will suffer.
Some people only begin to consider estate planning after being traumatized by a probate process from the death of a close relative. It becomes the impetus to not wanting to leave a mess behind. Others think that estate planning is a waste of time especially those who think they don’t have much to begin with anyway or those who have done it already. Outdated documents are just as dangerous as no documents, sometimes even more so while little assets is still something you can use to grow and expand through smart money management.
Some of the common problems with estate planning include:
- Outdated power-of-attorney or proxies
- Divorce from or death of beneficiaries
- Dormant accounts
- Children born after the document was drawn up
- Extended family
- Change in lawyer or estate planning expert
- New laws
There are different kinds of estate planning depending on what stage in life you are in and the assets involved. When you are still young and part of the work force, the estate planning type is simpler since you are still in the process of creating your wealth. However, it is not advisable to wait right before age of retirement to plan because it might be too late and you would have wasting precious time in potential earnings.
Estate planning should start as soon as you begin to earn. This means putting together a great finance team made up of trustworthy accountant, lawyer, and financial planner.
The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.
Contact our office by calling (608) 268-5751 to schedule a consultation or use our online contact form.