Many people start planning for retirement when they get their first “adult” job to ensure that they are comfortable during their retirement years. Once you get close to your “Golden Years” there are additional things you should consider to make sure you are ready and financial prepared. To help you get started, the Indianapolis retirement planning attorneys at Frank & Kraft offer some questions to consider when planning to enter your retirement years.
- Social Security Benefits. Do you know exactly how much you will receive in Social Security retirement benefits when if you retire early, on time, or late? Most people don’t. More importantly, the amount you receive will depend, to some extent, on your age when you begin collecting those benefits. The government makes you wait until “full retirement age” to start collecting the full retirement payout that you’ve earned. Full retirement age used to be 65, but Congress voted in 1983 to raise it to 67 for everyone born in 1960 or later. You can start collecting as early as age 62; however, your monthly benefit will be reduced. Conversely, your benefits payment goes up 8 percent for every year after full retirement age that you delay collecting payments, up to age 70. To get a better idea of how much your retirement benefits will be, navigate to the Retirement Estimator on the SSA website.
- Retirement Destination. This is undoubtedly something you have been thinking about for many years; however, there are several good reasons not to make a final decision until you are close to retiring. From a personal or emotional standpoint, you may be very attached to where you already live. Then again, that attachment may begin to disappear as you near retirement age and realize what it will cost to remain where you are. If you will be living on a tight fixed income during your retirement years, it may time to consider moving somewhere where the cost of living is a bit for favorable. Whether you stay where you are or choose a new destination, now is the time to make that final decision.
- Long-Term Care Planning. A 65-year-old entering retirement today already stands a 50-70 percent chance of needing some type of LTC before the end of his/her life. Those odds increase with each passing year and are shared by your spouse if you are married. Neither Medicare nor most private health insurance policies cover LTC expenses; however, Medicaid will cover LTC expenses if you qualify for benefits. At an average annual cost of over $100,000 nationwide, over half of all seniors turn to Medicaid for help paying for LTC. Unless you can afford to pay for LTC out of pocket, Medicaid planning should be part of your estate plan before you enter your retirement years.
- Financial Planning. Sit down with your financial advisor and make sure you are clear regarding when you can begin distributions from retirement accounts as well as when you must start those distributions. Also, create a retirement budget. You have likely done this before using estimates; however, those estimates will probably have changed. Now that you are counting down the days until you retire, it only makes sense to do a final budget.
- Merging Your Estate and Retirement Plans. Throughout your working years, your retirement plan and your estate plan may have been separate plans. As you near retirement age, however, those two plans should be merged to ensure that they work in harmony with one another. It is common, for example, to make significant changes to your asset structure when you enter retirement. That, in turn, should trigger a corresponding change to your estate plan.
Contact Indianapolis Retirement Planning Attorneys
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about planning for your upcoming retirement years, contact the experienced Indianapolis retirement planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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