Estate Planning for Retirees
You have just retired but you have a large portfolio due to earnings from smart investments and other income streams. You need a solid plan to ensure your wealth keeps growing and the management of your estate is in safe hands.
What Is Estate Planning?
Estate planning is the process through which you organize all your assets to provide for their management and distribution in the event you become incapacitated or die. Your estate includes vehicles, real estate, valuable personal possessions and investments like savings accounts, insurance, stocks and shares, and business interests. Your estate planning involves naming an individual or entity who is responsible for the management or distribution of your assets should you become incognitive or die.
Manage your Mortgages
If you have acquired properties through mortgage arrangements, make sure all the installments are paid on time. You can also explore ways of paying off your mortgage faster to reduce liabilities and save on interest payments. You can use mortgage refinancing, altering the mortgage, or making extra principal payments, either monthly or annually.
Reduce your Debt Obligations
Clear any credit card debts you may have by using your savings or even selling assets you don’t need, such as extra cars or furniture. If you have loans, consult your bank or financial adviser about consolidation or refinancing and negotiate lower interest rates. Try, as quickly as possible, to pay all outstanding bills and make cash payments for all your future purchases.
Stay on Budget
Create a new budget that balances your recurring expenses with your retirement income. Make lifestyle changes to ensure that your expenditure is below your new income level. For example, you can move to lower cost housing or eliminate unnecessary spending.
Living off Savings
There’s always a risk that your savings will not cover all your expenses during retirement. Strategies for minimizing expenditure include reducing utility bills such as switching off unnecessary lights and appliances and cutting down on landscaping costs. Another approach involves managing your Canada Pension Plan benefits by taking reduced income earlier or increased income later whichever is the most beneficial. You can also make investments that provide guaranteed annuity payments.