Estate Planning Switching to a more positive angle, let\'s consider your family

Question

Estate Planning
Switching to a more positive angle, let's consider your family and loved ones for a moment. Part of your retirement savings may help contribute to your children or grandchildren's lives, be it through financing their education, passing on a portion of your nest egg or simply keeping sentimental assets, such as land or real estate, within the family.

Without a well-planned retirement nest egg, you may be forced to liquidate your assets in order to cover your expenses during your retirement years. This could prevent you from leaving a financial legacy for your loved ones, or worse, cause you to become a financial burden on your family in your old age.

Explanation / Answer

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1.         Decide the age at which you want to retire.

========================================================================= 2.           Decide the annual income you%u2019ll need for your retirement years. It may be wise to estimate on the high-end for this number. Generally speaking, it%u2019s reasonable to assume you%u2019ll need about 80% of your current annual salary in order to maintain your standard of living.

========================================================================= 3.            Add up the current market value of all your savings and investments.

=========================================================================4.      Determine a realistic annualized real rate of return (net of inflation) on your investments. Conservatively assume inflation will be 4% annually. A realistic rate of return would be 6-10%. Again, estimate on the low-end to be on the safe side.

=========================================================================5. If you have a company pension plan, obtain an estimate of its value from your plan provider.

=========================================================================6.   Estimate the value of your social security benefits. U.S. residents can obtain their estimated benefits at the Social Security Administration

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