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3 Quick Suggestions for Planning Your Estate

3 Quick Suggestions for Planning Your Estate Fitzwilliams Financial

Estate planning is a significant undertaking. It gives us a way to transfer what we’ve accumulated throughout our lives to those we hold dear. Passing down properties and personal items can convey familial bonds and affection and even offer financial assistance to our loved ones.

  1. Have an actual plan

What’s the initial and crucial step in estate planning? It might seem a little too obvious, but the answer is simply to get a plan in place. Consider who will inherit what and provide clear specifications. Yes, there are numerous other minor and major aspects to estate planning that are vital, but without an actual plan and arrangement in place, you may put an undue burden on your heirs in the wealth transfer process.[1]

  1. Consider a contingent beneficiary

One important aspect to consider, particularly regarding your retirement savings, is to verify that you have correctly identified and spelled your beneficiary’s name. A minor error, such as a misspelled name, can cause numerous issues while managing your estate. Moreover, it may be beneficial to designate what is referred to as a contingent beneficiary for your retirement funds.[1] This alternate beneficiary will inherit the money in your accounts if your primary beneficiary is incapable of accepting the funds.[1]

  1. Use gifts to your advantage

Tax considerations often take center stage in estate planning. Strategizing around taxes forms a crucial aspect of personal finance because tax-related errors can cause a more significant dent in your hard-earned income than anticipated. However, one strategy to minimize estate taxes involves distributing some of your wealth before you pass away. As of 2023, the annual limit for tax-exempt gifts stands at $17,000.[2] This stipulation allows you to present anyone with up to $17,000 within a year without dipping into your lifetime gift tax amount, which is $12.92 million in 2023.[2] However, if you don’t give gifts during your lifetime, your estate will be liable for applicable wealth transfer taxes, leaving less behind for your heirs. If estate taxes worry you, gifting can serve as an effective method to alleviate some of these tax burdens.

Conclusion

Navigating the complexities of estate planning can be challenging, and even minor errors can create substantial problems for your family. The same is true for retirement planning. If you’re in need of assistance in planning your retirement, consider getting in touch with our consultants today for a free assessment of your current position.

 

When people think about retirement planning, they often focus on one question: How much money will I need?

I believe another question can be just as important: What will that money be able to buy?

Inflation can gradually change the cost of groceries, housing, healthcare, transportation, travel, and many of the other expenses people may encounter throughout retirement. As those costs change, the purchasing power of a dollar may change with them.

That is why retirement planning can involve more than building an account balance or reaching a particular savings target. A comprehensive financial plan may also need to consider future

spending, retirement income needs, time horizon, inflation, investment strategy, and how someone’s financial circumstances could evolve over time.

In this Financial Forecast discussion, I explore how inflation can affect everyday expenses and why purchasing power may matter when evaluating a long-term retirement strategy. I also discuss why investors may benefit from looking at their financial decisions within the broader context of their goals rather than focusing on any one economic factor in isolation.

No one can know exactly what prices, markets, or economic conditions will look like years from now. Planning can instead involve evaluating different possibilities and building a strategy that may be able to adapt as circumstances change.

Watch the video to learn more about how inflation and changing expenses can fit into the retirement planning conversation.

Fitzwilliams Wealth Management, Inc. is an SEC registered investment advisor. FWM and Fitzwilliams Financial are affiliated companies. The content in this video is for informational purposes only and is not personalized investment advice or a solicitation to buy or sell any security. We do not provide tax or legal advice. Media appearances are for informational purposes only and do not constitute an endorsement. Investing involves risk.

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