All of us, regardless of their age, health, marital status, assets and income, should understand that there are some planning needs we all must address in order to protect us from personal, legal, tax and financial problems.
The FIRST step is the realization of the need in our life.
Once we realize the need the next step is to search for a professional and establish a relationship.
Both the things are important the realization part covers most of the problem and the rest is covered when you engage a profession to assist you with the need.
Let’s talk about the issue of identifying the problem.
We all have most of the following needs to be addressed:
Accumulating Wealth for Retirement Needs
We all retire at some point, and that is when wealth accumulation normally tapers off and we begin to consume our accumulated wealth in order to fund our retirement needs.
Never overlook the importance of retirement planning because, if ignored, the demographics of retirement, aging and income cash-flow needs can be devastating.
Life insurance statistics show that a 50-year-old now has at least an even chance of living to 100!
Assuming the average retirement age is somewhere between age 60 and 65, that means many of us realistically face the prospect of living 35 to 40 years after our wealth accumulation phase has ended.
In estate planning, we often talk about preserving wealth and passing it on to the next generation. But given the demographics of aging, inflation, health care needs, etc., it is easy to have our wealth run out before we do.
Another study by Bureau of Labour (US)
At the Age 65, 1% were wealthy, 4% were able to maintain their standard of living, 23% were still working as they could not afford to quit, 9% were dead and 63% were dependent on children and charity.
Appropriate Tax Planning Should Always Be Considered
We all face a multitude taxes (along with income tax and wealth transfer tax), which must be addressed at each stage of life as well as at each stage of the planning process.
A proper planning of TAX can not only save us with hassles with Tax authorities but also help in deploying and growing our wealth at higher rate.
Every one of us needs to Understand That at Some Point or Another We All Die
It is critical that appropriate estate planning documents are in place, including wills, trusts, appropriate beneficiary designations, designations of guardians, etc.
90% of all property related cases pending are because there was no WILL or beneficiary identified by the creator/inheritor of wealth after him/her.
Avoiding Guardianships
If we all die some day most of us may also be old or disable at some point in future.
Unfortunately, because of age, accident or illness, we may face the prospect of being unable to take care of our own finances or to make our own health care decisions. Therefore, proper documents need to be put in place to allow someone else to make appropriate decisions on behalf of us.
Most of us do not plan for such situation but with family structure going nuclear it is very critical to appoint a guardian for such time.
Long-Term Health Care Costs
Because of health and aging, all of us faces the prospect of financing long-term health care needs; including the possibility of assisted living and full skilled-care living. These costs can be financially devastating if they are not planned for.
They can set us back and all our planning can go for a toss.
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