1. Know the 5-Year Retirement Red-Zone

Planning your taxes, finances, and legalities carefully is crucial when nearing retirement. Some small mistakes, whether made by yourself or by insurance companies, can cost you up to $10,000 in missed opportunity.

You should be planning your trusts no later than 5 years before your retirement to avoid rushing. For those of you who pan to work as long as possible, try and start as soon as you get close to the typical retirement age of 65. There are many reasons for a person to stop working earlier than expected, for example, if you become incapacitated with a disability. As you get older, the incidence of disability increases greatly.

When retiring under pressure, clients can fall victim to choosing plans that sound good and just saying yes to everything. Often times the advice is generic and messy. Without proper attention to detail, everything can turn into a train wreck.

2. Spot the Traps of a Revocable Trust

Some advisors would attempt to sell the clients a Revocable Trust. They would then send the information to an outside attorney with very little information from the client.

The client would receive some generic information about the trust and some estate planning, but ultimately they would be sold insurance products.

As it turns out, the advisor was not an attorney but was an insurance salesman. When walking in, rushed, you may fall victim to such pressure tactics. Or, with your information, the salesman may shift to your assets and begin to sell you insurance on completely unrelated topics.

In the end, you receive a few large plans that conflict with one another and create even more issues.

3. Put a Real Team Together

“I’m convinced that integrating the tax, legal, and financial sides of things is crucial for a successful retirement.” – Devin Carroll, Financial Advisor

The goal is to be looking at the big picture of things so that nothing goes unchecked. This includes:

  • Find a competent advisor and make sure that they have an attorney and a CPA present with them.
  • Know how it will affect your IRA, investments, availability of social security, and what the tax consequences are.
  • Be prepared for any disabilities that you currently have or that may arise.
  • Start early. It can be difficult in your 30s or 40s with children and potential college prospects, but having all your boxes checked may earn you an extra $10,000 later down the road.

The content for this article was taken from the Aging Insight’s live radio broadcast entitled Building an Interdisciplinary Team with Devin Carroll. To learn more, contact us today.

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