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Financial planning, part two

Tracy Tutag and Jeffrey Apps

To follow up on our topic last week regarding the challenges that today’s retirees face. A common question today is “How can I make sure my money will last?”Planning to ensure sufficient incomeWith the cost of medical care and other major expenses for retirees rapidly rising, there is real anxiety about eventually outspending your assets. One way to address that concern is to budget for savings early in your retirement, so you can continue adding to your assets. In later years, if the income from your investments is not sufficient, your plan can encompass systematic withdrawals from principal to supplement income. Of course, the key to living comfortably in retirement is to maximize the income your assets generate. First, you want to consider the nature of your retirement assets and the sequence in which to liquidate them. Failure to consider timing decisions could result in extra taxes or penalties – and lessen the size of your nest egg.Tax efficiency of investments is another important consideration. Once assets are no longer tax-deferred, you want to make sure that buying and selling decisions, whether you make them yourself or you rely on a fund manager, minimize the amount of taxes you owe. If you are investing in fixed income securities, whether they are “tax-free” or taxable securities, consider “laddering” the maturities. That means buying the securities that mature in different years. That way, if or when interest rates go up, you don’t have everything locked into today’s low interest rates.Assets that provide full benefit to othersA critical element of financial planning, for retirees and others, is estate planning. If you’re fortunate enough to have sizable assets – including real estate, there is much you can do now to ensure that your heirs will receive the largest possible value of your bequest. Regardless of the size of your assets or estate, everyone should consider having a basic estate plan that includes a will and/or a trust, durable power of attorney, a living will and nomination of a conservator or guardian in the event of disability. For those whose assets are large enough to potentially trigger estate taxes, there are many additional considerations. Some of these might include use of the Unified Tax Credit, Marital Trusts, life insurance held in a trust to help fund estate taxes, Annual Gift Tax exclusions, donating appreciated property to a charitable organization and many others. Your financial professional, together with your attorney and tax advisor, can help you establish and review your estate plan to make sure it still reflects your wishes. Financial planning is an on-going process that doesn’t stop after retirement. Make sure you are utilizing the money you worked so hard for in the most efficient manner by establishing and reviewing your plan in retirement.Jeffrey Apps and Tracy Tutag offer securities and investment advisory services through AXA Advisors, LLC (member NASD, SIPC) 1290 Avenue of the Americas, New York, NY 212-314-4600 and offers annuity and insurance products through an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries. They can be reached locally at 970-926-0601 or tracy.tutag@axa-advisors.com


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