While estate planning involves creating a plan for the transfer of the creator’s estate to their beneficiaries after their death, retirement planning is the process of setting retirement income goals and taking steps to achieve these goals.
Creating an estate plan and a retirement plan both are extremely important. While a carefully designed estate plan will protect the interests of your loved ones, your retirement plan will allow you to build a substantial corpus for your stress-free retirement life.
Estate planning and retirement planning are closely related. No wonder many people are unable to differentiate between the two. Estate planning is related to the time when a person dies or becomes physically or mentally incapacitated; whereas retirement planning is related to the time when a person exits the workforce after reaching a certain (retirement) age.
The Basics of Retirement Planning
In retirement planning, the focus is on the creator of the plan. When creating your retirement plan, you must focus on finding ways to ensure financial independence after retirement. Many people who retire without a retirement plan are unable to support themselves and end up becoming a burden to their loved ones (children or close relatives) after retirement.
Your retirement plan must account for years after your retirement when you will have zero or very less income. Because healthcare costs usually rise with age, estimate post-retirement healthcare expenses and plan for them. This is important to avoid burdening your kids or close relatives in the future.
When planning your retirement, seek answers to important questions, such as what type of lifestyle do you want to have after retirement? Do you want to relocate to another city/state/country post-retirement? At what age do you want to retire?
Estate Planning: An Introduction
A person’s estate consists of all the assets they control or own. An estate plan includes a will that provides specific instructions on how the person’s property must be divided among their beneficiaries and heirs. Many plans also include living trusts.
They say hope for the best but prepare for the worst. While you must have a positive outlook on life and hope to live a healthy and long life, you cannot completely rule out the chances of you developing a health problem that leaves you physically or mentally incapacitated.
When creating their estate plan, people must consider setting up a trust that addresses important questions related to management and distribution of assets if the maker passes away or becomes physically or mentally incapacitated and is no longer capable of taking important decisions (such as decisions related to their treatment and health).
Your search for an experienced and knowledgeable elder law attorney in Santa Rosa ends at Johnston Thomas Law. Our experience allows us to create custom solutions fit to meet our clients’ needs. We are committed to helping our clients navigate complex and continually evolving legal landscapes. To talk to one of our legal experts, call us at 707-545-6542.