What do I have to Retire?

The New Rules of Easy methods to Retire in these Uncertain Times

Estate planning is well covered--probably because it's a "goal" to provide money to heirs. But helping retirees to manage the money they have today, while they are still in retirement, is conspicuously absent in most financial education efforts.

From our experience in educating our clients for retirement, there are seven key areas where retirees need both financial education and financial planning in order to protect and preserve wealth:

Money management. Managing your monthly expenses to ensure they are not forced to take large distributions from their retirement nest eggs to meet current obligations.

Cleaning up the nest. Out of site, out of mind is far too often the mantra for retirees. However, a failure to organize can be disastrous later on. Pull together all those retirement accounts: IRA's (yes, some folks do forget about older IRA's they have), old 401k's from previous employers, annuities etc. review and consolidates. Roll-over that 401k to your IRA, which is almost always in your best interest. Distribution planning. Planning distributions to ensure that you are not taking too much or too little from their retirement accounts, minimizing tax liability, and meeting Required Minimum Distribution amounts.

Managing your money and continuing to accumulate assets. Now that retirees are living longer, their nest eggs must last longer. The old paradigm of becoming more conservative in retirement can sometimes backfire if retirees become too conservative and stop growing their assets. It is important to make sure that they are continuing to grow their nest egg to at least keep pace with their distribution needs and to outpace inflation and taxes.

Protecting wealth. This is the area where retirees get the most attention--in the form of estate and insurance planning. However, they typically get their information from different sources and there is much inaccurate or misleading information as to how to set up wills, trusts, and charitable giving programs and what type of insurance policies are appropriate based on their personal circumstances. Also, insurance and estate planning tend to be viewed separately, when in reality both are tools to protect wealth and often to minimize taxes.

Establishing your legacy. For high net worth folks, certain other challenges exist to ensure that your estate survives you: Pre-managing your estate tax liability so the kids won't have to sell off your assets such as the business or the farm to pay the bill; setting up Charitable Remainder Trusts (CRT); establishing a family limited partnership or LLC; other (vehicles that are not even invested yet)

Managing the Ultimate Distribution. This is the most dangerous area and, not surprising the most confusing and overlooked. Careful consideration must be paid to not only saving and investing your money, but on the proper mechanics on how the assets need to be held in order to maximize your income distribution through your retirement. The tax laws are changing all the time, sometimes drastically as with the Pension Protection Act of 2006, so educate yourself early and often

Your financial security can not be left to chance, especially in your golden years. Just because you've achieved financial security, does not mean your financial planning is over. How Much Money Do I Must Retire?
Retireing in 2011