For investors who are at or near retirement, we believe two fundamental questions should almost always be asked: “do you have enough money to support your needs for spending in retirement, and, will your family be taken care of if you pass away?”
In a previous post, we wrote about how to check to make sure you have saved enough to meet your retirement income needs. Now the question turns to, “do you have enough saved to support your spouse and family as well?
Start with an Estate Planning Checklist
An estate planning checklist can help you get organized and have a clearer picture of how prepared you are for retirement. Running through an estate planning checklist encourages you to inventory your assets and debts, update your beneficiaries to make sure the assets go to the right places, and formalize everything through legal documentation.
Once you’ve done that, you can get to answering the question posed in this piece: “is your nest egg big enough to support your family?”
Investors should address this in two parts:
1) Determine What Your Retirement Income Needs Are
...and be thorough about it—think about things like rising health care costs, one-time purchases like a new car or home, etc…Also be sure to be conservative about your life expectancy. Folks are increasingly living longer.
2) Talk with your spouse
...and think about what the needs of your family are going to be for the long-term. This can be a difficult conversation, where the main question is: “If I die tomorrow, is my nest egg big enough to support my family's lifetime needs?” Investors should play out the hypothetical scenario, and figure out what the spouse’s income needs are through their life expectancy, while also considering what your goals are for your children/grandchildren, if applicable.
Talk to a Financial Advisor When Thinking About Estate Planning and Your Nest Egg
The steps above are good for getting started, but a financial advisor can run hypothetical scenarios about whether your money will last for your family like you want it to. If you’d like to have a constructive conversation with one of our Wealth Managers about your retirement goals, please do not hesitate to give us a call at 1-800-541-7774.
