New York Estate Planning & Elder Law Blog
The retirement process is full of challenges. One of the best ways to make sure that you navigate this process successfully is to anticipate the various obstacles that lie ahead of you. The implementation of strategies to avoid or limit the severity of obstacles that do arise should be included in a retirement plan.
The purpose of this article is to review some of the most common mistakes that you should anticipate as you consider and begin the creation of a retirement plan.
# 1 – Failure to Create a Strategy at All
Like all other substantial important events, it is critical to plan for retirement in advance. This means that you should set goals as well as strategies to make sure that these objectives are achieved.
Strategies might include things like plans to maximize Social Security benefits and selecting the Medicare plan that you will use. Failure to take the proper steps can cause a person to make financial mistakes that make it more difficult to successfully retire.
# 2 – Failure to Maximize Tax-Deferred Savings
One area of retirement planning that often plays a vital role is creating a successful strategy to realize the most tax-deferred 401(k) and IRA savings. Failure to participate in these plans can result in substantial mistakes, particularly if an employer matches an individual’s contributions.
For example, in 2019, an individual contribute up to $19,000 to a 401(k) if the individual is under the age of 50 and up to $25,000 if the individual if 50 years of age or older. When a person takes withdrawals from either 401(k) or IRA accounts, however, the amount is taxed. Distributions from these accounts, however, are not taxed because these amounts are funded by after tax funds.
# 3 – Do Not Overlook Health Care Costs
Even though the retirement process is designed for older individuals, this period of time need not be constantly marked by poor health. Instead, good health as long as possible is vital to make the most out of retirement.
To make matters more complex, Medicare only covers a certain portion of an individual’s health care needs. Medicare Part B premiums can be as high as $460.50 for high-income individuals.
As a result, many individuals navigating the retirement process purchase Medicare Advantage or Medigap. Additional healthcare costs can further complicate the process. Figuring out how you will pay for these costs is a vital aspect of creating a successful retirement plan.
# 4 – Consider Issues besides Money
There are a number of other issues that a retirement plan should address besides financial issues. You should take issues like what goals you will achieve during retirement as well as where you want to live into consideration.
The goals that you set for yourself should influence your financial strategies. While many people think that retirement plans begin and end at money, these strategies should also take into consideration how to use your savings to achieve any goals that you have for retirement.
Speak with an Experienced Estate Planning Lawyer
Planning for retirement involves a number of questions and concerns. If you need assistance planning for this process, do not hesitate to contact an experienced estate planning lawyer like the attorneys at Ettinger Estate Planning.