3 Notorious Retirement Planning Tools to Consider in Your Toolbox

3 Notorious Retirement Planning Tools to Consider in Your Toolbox

By Solid Serenity legal Solutions

Retirement planning is an important endeavor. There are countless tools to be used in your plan, and even more perspectives on how those tools should be used. So, it is no surprise that over time certain strategies have gotten poor reputations. Some of those “stay away” reputations are deserved but there five that deserve a closer look.

Here are 3 notorious retirement planning tools to consider in your toolbox.

(1) Insurance

The first three tools we are going to look at all fall under the broader category of insurance. While everyone acknowledges the importance of health insurance, other types of insurance haven’t gotten the same respect and some people tend to reject them without giving them a closer look. Rejecting some kinds of insurance can unnecessarily limit your options in retirement.

Annuities

Annuities have been reviled for their limited benefits, but they balance that out with lower risks. They can offer a predictable income that is difficult to outlive and they have numerous tax advantages. An annuity may be the perfect tool for your personal retirement plan.

Life Insurance

Some people think poorly of life insurance. They may paint life insurance as an investment where you have to lose to win. But, such an approach misses the fact that life insurance is taken out as a plan to lower the financial risk and harm to your family if something happens to you. It is not an investment meant to gain income over your lifetime. Life insurance can replace lost income tax free and provide a fixed amount of money to help your family get back on their feet if you are not there to help support them.

Long-Term Care Insurance

Though there are complaints about rising premiums in long-term care insurance, benefits exist that can outweigh those risks. Long-Term Care Insurance can provide a way to age with dignity where you are able to retain some sense of autonomy in your decisions and avoid becoming a financial burden to your children. The costs of long-term care rise every year, making long-term care insurance more an more likely to be a necessary part of your retirement plan.

(2) Housing

Insurance is not the only retirement tool that has suffered a poor reputation. Reverse Mortgages oftentimes are not only viewed in a poor light; they may even be considered a joke. While, like with any loan, consumers should look into reverse mortgages with caution and skepticism, there are certainly some benefits available for retirees through HECMs. Some retirees have found HECMs to be a useful estate planning tool that allows them to stay in their own homes as they grow older and provides them with a steady flow of income.

(3) Legal

Trusts have received bad reputations due to some viewing them as just a tool for lawyers to generate income. Some people believe trusts do not have much use for people in life. Similar to life insurance, some view living trusts as an investment where you must lose to win.

But unlike life insurance, where the focus of the product is on the worst case scenario, trusts are guaranteed to come in handy for almost anyone who chooses this tool.

Trusts allow families to avoid the stress, time, and expense of court after a loved one dies. Probate will cost your heirs more than most trusts will cost you. Trusts allow you to take that burden off your heirs upon your death while also giving you more freedom to distribute your assets in the way that you want.

If you have questions about estate and retirement planning, contact us.

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