Don’t give away assets too soon. Image: Chad McDermott/Shutterstock.com
By: FEDweek StaffRetirement and estate planning means more than building up a large investment fund. Other vital things to do:
* Pay off debt. Before you retire, you’ll be better off if your credit card, mortgage, and other debts are paid off. The money you spend on debt repayment will eat into the amount you have left for other retirement pursuits.
* Keep up your health insurance. Even after you reach 65 and qualify for Medicare, you either should buy a Medigap policy as a supplement, sign up for a Medicare Advantage plan, or if you’re eligible to continue your FEHB coverage, as most retirees are, keep that and possibly consider switching to a lower cost plan. Medicare has many gaps (deductibles, coinsurance, vision care, hearing aids, etc.) that need to be covered. Second-payer plans, like FEHB for someone who has Medicare, fill many of those gaps.
* You should investigate long-term care insurance, too.
Some key “don’ts”: * Don’t neglect other insurance coverage.
You’ll still need adequate home and auto insurance; excess liability (“umbrella”) coverage also is vital. Ask about discounts for seniors, which are offered by many companies.
* Don’t give away assets too soon. Youngsters may be unprepared to deal with a great deal of wealth. If you wait until your children are 30 or older, they probably will have finished school, established careers, and be able to handle money responsibly.
* Don’t delay lifetime gifts for too long. If illness or incapacity strikes, you might not be able to create the estate plan you desire.
* Don’t impose harsh restrictions. If you attach excessive stipulations to inheritances, trying to exert control after your death, your heirs may be resentful.
* Don’t give or bequeath too much to younger generations. Your heirs may fail to lead worthwhile lives, if their financial needs are already met.
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