By Debra Ragin Jessup
With pension plans having largely disappeared from the employment landscape, the baby boomer generation is the first to be tasked with the responsibility of funding their golden years themselves. This generation includes those born between 1946 and 1964, and many have already entered retirement. As they make this financial transition, many are learning that they’ve made some of the most common retirement mistakes. If you find yourself in this situation, the good news is that there’s still time to avoid or fix these issues.
Mistake #1: Believing Estate Planning is Only for the Wealthy
While baby boomers are not the only ones guilty of this mistake, the common misconception is that only the ultra-rich need to have an estate plan prepared. By some reports, about half of Americans between the ages of 55 and 64 do not even have a will. Because estate planning encompasses not only protection of your assets (regardless of how much you’ve accumulated), but also your healthcare choices, the lack of planning can leave you in a dire situation should any medical issues arise.
Mistake #2: Checklist Mentality
For many, estate planning is just the preparation of legal documents. Once the documents are signed, the client crosses off the item off his or her to-do list and moves on. But, your circumstances may (and usually will) change. And the likelihood of this happening increases as time goes by. To ensure your estate planning objectives are carried out, you should update your estate plan every time a major (or minor) life change happens, such as retirement.
Mistake #3: Not Completing Your Estate Planning Homework
Just because the estate planning documents have been signed doesn’t necessarily mean that the planning is complete. It’s important that any assets that need to be retitled are done so as soon as possible before you forget. If the ownership or designations on financial accounts and property don’t align with your estate planning strategy, there can be major problems down the road. Improper titling of financial accounts or property can result in an unexpected or undesirable distribution. You may make one plan through your will or trust, but the ultimate determination of asset transfer will be based on the ownership or beneficiary designation of each asset account upon your death.
Mistake #4: Leaving Out Little (And Not So Little) Things
It’s important to consider all forms of property, not just the high-value assets when putting together an estate plan. Some of the most commonly overlooked assets include digital assets and family pets. If not expressly addressed in your estate plan, your family may end up fighting over valuable assets, abandoning those they deem worthless, or not even realizing certain assets existed.
Mistake #5: Not Preparing for Life Events or Emergencies
No one has a crystal ball, but with proper estate planning you may be able to weather the storm brought on by some of life’s unexpected events or emergencies. With long-term care costs increasing year after year, planning for the future possibility of a nursing home can save you money and reduce worry if the need arises.
Although many baby boomers (and others) have made these mistakes, you don’t have to be one of them. Contact our estate planning team to learn about your options and make sure you and your family are protected from these common mistakes.