Accumulating wealth is always a great thing, right? Well, mostly. Obviously we want you to enjoy financial security and a long, healthy retirement. But you might also encounter a few surprising pitfalls. Identifying them ahead of time can help you avoid them.
Don’t overestimate yourself. As your retirement account grows, you will become more confident about a secure or even luxurious retirement. That’s a great thing, and we certainly want you to feel hopeful and happy about your future. On the other hand, too much confidence can lead to some mistaken assumptions about your future purchasing power. Remember to factor inflation into your retirement income plan. If you plan to generate the same income each year, keep in mind that it won’t stretch as far once you’re 20 years into retirement.
Don’t become a target. Sadly, those with more money are also more likely to be targeted for a lawsuit. For example, wealthier people are more often sued for “pain and suffering” after a car accident. As your wealth grows, investigate your need for a personal liability umbrella policy to protect you from these situations.
Learn to deal with higher taxes. It’s no surprise that those who earn more, pay more. However, your financial plan should help you anticipate tax-related issues, and you can utilize various strategies to reduce your tax liability. But as always, it’s better to plan ahead than to look back with regret missed opportunities, so tax planning should remain an integral part of your overall financial strategy.
Taxes don’t stop when you die. After your passing, your heirs could owe an enormous debt to the IRS. While Congress is currently mulling over President Trump’s proposal to eliminate estate taxes, nothing has been decided yet. An estate plan can help you work to avoid these problems.
Obviously, accumulating wealth is still a terrific thing. But the challenges you face will change according to income and assets, so it’s best to anticipate those changes and prepare for them. Make an appointment with us to discuss your retirement income plan, and we can help you create a sound strategy with these issues in mind.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.