Investment Issues

According to the U.S. Census, people today can expect to live longer in retirement than ever before. Increased life expectancies mean we'll all probably have to do a better job of planning our retirement and protecting our estate assets than previous generations. Working out a sound financial plan now-before you need it-can help accomplish retirement and other important financial goals.

Retirement Planning

Creating a financial plan can help ensure a comfortable retirement. In drawing up your plan, you'll have to review your:

Once this information is determined, any shortfall between projected retirement income and anticipated costs of living during your retirement can be calculated. It's important to plan so that you have enough assets to get you through, not merely to, retirement. A comprehensive retirement plan might include elements such as:

• 401(k) plans.
• Roth or traditional IRAs.
• Education savings plans.
• Life insurance or annuities.
• Tax-advantaged investments.

Estate Planning

Most of us already know our estate includes every asset and debt we have. However, few of us probably also realize that:

• Federal tax rates begin a 37 percent and rise to 48 percent for estates valued at $1,500,000 or more for 2004.
• Estate taxes are due within nine months of death.

To help meet estimated future needs, typical financial plans often employ the following strategies:

• Updating current estate plans.
• Titling assets to maximize credit available against federal estate taxes.
• Purchasing life insurance to cover estate tax and settlement costs.
• Establishing certain irrevocable trusts, which may help remove assets of your taxable estate.
• Making gifts of $11,000 or less to reduce the value of your estate.

In short, talking with a financial and tax advisor regarding the adequacy of current estate and retirement plans is an essential first step for anyone interested in leaving behind a lasting personal and financial legacy. IBI