Let’s talk about some of the areas of your financial life where you might be flirting with disaster and don’t even know it. Disaster and retirement are not two words you want associated with each other.
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On today’s episode, we’ll share some of the key areas of financial planning you might not think about and how you could be flirting with disaster.
Out-of-date legal documents
We’re talking about wills, trusts, power of attorney, medical, etc. Of the people we’re meeting with for the first time, 50% or more don’t even have their legal documents in place. They don’t have a will or trust or other important records.
“A lot of times, people could be going through life with old documents,” said Scott.
If you don’t have these documents in place or they are outdated, you could be leaving your loved ones with a lot of difficult times and frustration if something happens to you.
Incorrect beneficiary designations
It can be easy to forget to update your beneficiary designations. This could apply to IRAs, life insurance, 401ks, IRAs, or any other account or policy that has a designated beneficiary.
Divorces and second marriages might be a reason to change, or maybe the birth of a new child, or maybe a fractured relationship with adult children that makes you not want to have them as your beneficiary any longer.
Tax time bomb
If the overwhelming majority of your investments are in tax-deferred accounts, you could be building up a time bomb for yourself. If you’re going to pay income taxes on every penny of your retirement cash flow, you leave yourself vulnerable to tax rate increases in the future.
“We’re under the assumption that our taxes will be lower in retirement,” said Scott.
Listen to the entire episode or click on the timestamps below to skip ahead to a particular question.
4:00 – Out-of-date legal documents
7:23 – Incorrect beneficiary designations
9:55 – Tax time bomb
12:40 – Long-term care expenses
16:44 – 60/40 portfolio
Thanks for checking out this episode. We’ll talk to you again soon.
“People are thinking, ‘No this won’t happen to me. I’m not going to need long-term care costs.’ But what if it does happen to you?”
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