Can you believe you made it through the entire senior year? My senior year of high school and college both went by so slow, but this one just flew by! It’s appropriate that these topics were listed in the “senior” year because they have to do with things that you associate with “senior” citizens: retirement and estate planning.
To summarize what we’ve learned this “year”, we’ve covered the following classes:
- RE401: Calculating Retirement Needs – The basics of how to calculate your retirement budget in order to determine the lump sum you will need for retirement at your desired retirement age.
- RE402: Qualified Retirement Accounts – A summary of the rules, requirements, and opportunities for retirement plans such as 401k, 403b, 457 and Thrift Savings Plans.
- RE403: IRA Account Fundamentals – An overview of rules, requirements, and features of IRA accounts including both traditional and IRA accounts.
- RE404: Social Security & Medicare Essentials – How social security and medicare fit into your financial plan for retirement. Also, how social security benefits are calculated and how to find your expected future social security benefits. Also, how Medicare currently works.
- ES401: Essential Estate Planning Documents – An overview of the most important documents to have in place including a last will & testament, a living will, medical & financial power of attorney, and (for some) a revocable living trust.
- ES402: Introduction to Gift & Estate Tax – A brief summary of the lifetime exclusion that applies to gift and estate taxes as well as other components to calculate the taxable estate.
- ST401: Other Employment Benefits – A list of benefits that may impact your financial plan including paid leave, wellness incentives, transportation reimbursement, tuition assistance, worker’s compensation and employee stock options.
REVISE YOUR FINANCIAL GOALS
It’s that time again when you should go back and revise your financial goals. This time, you’ll look for any goals that are related to your retirement plan, such as 401k or IRA contributions, or your estate planning, including setting up a will or trust.
The specific questions that you should ask yourself at this time include:
- Does my retirement goal need to be revised with regard to either the amount or date of expected retirement?
- Should I be increasing my retirement contributions to my 401k (at least to employer match!)?
- Would it be beneficial to start contributing to either a Traditional or Roth IRA?
- Am I comfortable with my current retirement plan including or not including Social Security benefits as part of the calculation?
- Do I need to add any goals related to ensuring that I have proper estate plan documents in place (for example, adding a goal to create a will or trust)?
- Should I meet with an attorney to discuss additional estate planning opportunities (essential if you currently have or expect to have an estate over $5.49 million)?
EXAMPLE: THE SMITH FAMILY
The Smith family (used as an example family in each class) makes the following changes (in red) after looking at their retirement and estate planning goals. Highlighted in blue are tasks/goals that they’ve completed already.
Congratulations on completing your Senior year of learning about MAKING YOUR MONEY MATTER.