Wed, 16 January 2019
How are we supposed to dream big when we are so unsure of how to provide for ourselves in the future? The future seems so unsure after the terrible month of December. Some may be tempted to give up and just put all their money into a safe money market account or cd. You know for certain that you will get 2.5%-4% returns and life wouldn’t seem so scary. On today’s episode, you’ll learn why you want to have an agile retirement plan in place to help you through the rough patches so that you can rock retirement and get back to dreaming of those retirement wants and wishes.
Finally, we get to the wishes
On the previous episodes this month we discussed how to budget for your needs and wants in retirement and on this episode we finally tackle the wishes. Wishes can seem extravagant whether you are overfunded or underfunded in your retirement. Those that are overfunded may find it hard to dream big after years of being good stewards of their money. Those that are underfunded may balk at the idea of having so much leftover that they should shoot for the stars. Whichever category you fall into you should still go through this exercise as an expression of your values and to really shoot for the stars. Whether it's leaving an inheritance, gifting your grandkids with a college education, planning an epic trip, buying a home for your whole family to enjoy, or setting up a charitable foundation, dreaming big can be a wonderful way to start rocking your retirement.
There are many ways that you can leave money at the end for family members that you care about. A trust can be formed that will help protect the money after you pass. For instance, if you leave someone $500,000 it could be misspent, lost in a divorce, or lost by a spouse that overspends. By setting up a trust the money is protected in these cases. Another way to leave a legacy to those you love is by gifting it now. You can gift $15,000 each year without any tax consequences and your spouse can gift the same amount. You can even gift your child’s spouse an additional $15,000 without tax consequences as well which brings the total to $60,000 per year of tax-free gifting. Another way to give to those you love is by setting up a 529 savings plan for your grandchildren. These plans are highly flexible and you can even switch the beneficiaries or split it between multiple grandchildren. Have you thought of the legacy that you want to leave your loved ones?
3 Protips on dreaming big
Gifting to charity
Just like there are many ways to give to your heirs, there are several ways that you can give to charity. One way is to create a donor-advised fund. This is a fund that you can create where you can help manage the investments and annually you can decide what you want to give and to which organizations. You can even use it as a foundation and plan the distributions as a family. With the new tax rules consider lumping your gifts into specific years to get the maximum tax write-offs. There are so many ways that you can leave a legacy behind. It all depends on your values and the kind of legacy you want to leave. So how will you dream big?
OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN
HOT TOPIC SEGMENT
PRACTICAL PLANNING SEGMENT
THE HAPPY LAB SEGMENT
TODAY’S SMART SPRINT SEGMENT
Resources Mentioned In This Episode
Roger’s YouTube Channel - Roger That
BOOK - Rock Retirement by Roger Whitney
3-video Series: 5 Minute Retirement Makeover
Roger’s Retirement Learning Center
The Retirement Answer Man Facebook Page