By Ben Hartman, HunterMaclean
Special to Elegant Island Living
According to a 2012 report from the Center for Retirement Research, only about 30 percent of households are prepared for retirement at the age of 62. The percentages improve only slightly with age; only 55 percent of households are prepared to retire by age 66.
Successful retirement planning requires foresight, strategy and determination. Whether you’ve lived in Georgia all your life or recently moved to the Peach State, there are a few important factors to keep in mind:
Take advantage of 50+ incentives. Just because you’re 50 or older, it isn’t too late to plan for retirement. In fact, one of the benefits of turning 50 is that the federal government allows you to divert extra money to a retirement account and/or to an IRA. This provision applies to employer-sponsored plans, such as 401(k)s, 403(b)s and 457(b)s, allowing individuals 50 and older to contribute an extra $5,500 above the standard $17,000 annual limit. That translates into saving of up to $22,500 in pretax dollars every year between now and the day you retire.
Develop a plan that works under Georgia law. It is important for your estate planning documents to be consistent with Georgia law. A will drafted to take advantage of the flexibility afforded under Georgia law can facilitate the probate process and estate administration for your family. A will drafted in another state might not take advantage of these opportunities.
The Georgia Advance Directive for Health Care allows you to appoint a health care agent to make decisions when you are unable to make decisions yourself. This important document also allows an individual to state treatment preferences in event of a terminal condition or a state of permanent unconsciousness. This document has been blessed by the Georgia legislature.
Coordinate retirement benefits with your estate plan. Be sure to pay close attention to 401(k) and IRA designation forms, life insurance beneficiaries and other retirement benefits to ensure these items complement your overall estate plan. It’s important that all the elements of your estate plan be diversified and strategic to ensure the maximum benefit upon retirement. Beneficiary designation forms trump your will. Review these beneficiary designations with your estate planner.
Use trusts to plan for incapacity. A trust serves as a written expression of your desires regarding the management of assets during your lifetime and the distribution of your assets upon your death. Should you become incapacitated for any reason, your designated “successor trustee” will take over the management of trust assets. Your successor trustee will follow your wishes as set forth in the trust. Trusts are efficient tools to provide for management of your assets in the event of your incapacity.
Seek professional counsel. An attorney specializing in estate planning and trusts can oversee the process of planning for retirement, making sure you take the necessary steps to comply with state and federal law. Smart planning now can pay big dividends upon retirement.