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Protecting Your Retirement &
Your Blended Family
| By Lynn MacNeil |
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Q: I am planning to retire early
next year, but I’m concerned about whether or not I could run out
of money during my retirement. How can I best ensure that I
won’t outlive my money?
A: Retirement can be an exciting yet scary time for many.
When you stop adding to your savings and start withdrawing from them,
the concern about out outliving your money often sets in. To
ensure that you are well protected against that, you should go through
the process of creating a written retirement plan with your financial
planner. This would consider your current and future spending
needs, the amount of income you will receive from pensions, taxes, as
well as the amount of savings you have accumulated.
Your retirement plan should also evaluate the effect inflation will
have on your retirement. These days, as the economy lifts towards
recovery, inflation is not a big deal, but according to many experts,
you should be planning for an annual rate of 2%-4%. This means
that your investment portfolio will need to achieve an annual rate of
2%-4% just to stay even. Consider which sources of your
income are indexed for inflation. Consider which expenses will
decrease over time and which will increase. And most importantly,
consider to what degree your current investments offer inflation
protection.
Once you develop a written retirement plan with your financial planner,
it should be reviewed and monitored during your retirement.
Q: I am
getting married this September. This is a second marriage for
both of us. We both have young children, and separate
finances. How can I make sure I protect myself & my children
financially?
A: Money is always one of the most challenging aspects of
relationships, and that is especially true for blended families.
Here are a few things to consider:
- Consider
whether or not a domestic contract would be appropriate to protect
assets brought into the new union.
- Get together
and develop a new financial plan and budget that fits your new family.
- Redo your
wills. Careful planning is needed to ensure that the children in
your new union will benefit from your estate in the way you wish.
Traditional planning techniques may not work because they could result
in your children from a previous relationship receiving nothing if
everything is transferred directly to your new spouse.
- Re-think
your insurance, and update your beneficiaries
Financial planning for a blended family can be complicated. Your
financial planner, can help develop appropriate strategies that ensure
your new family’s goals are met.
Lynn MacNeil,
Pl.Fin. is a licensed Financial Planner with Investors Group,
specializing in retirement, tax & estate planning for retirees.
This column is presented as a general source of information only and is
not intended as a solicitation to buy or sell investments, nor is it
intended to provide legal advice. For more information on this topic or
on any other investment or financial matter, please contact Lynn
MacNeil at (514) 693-3384 or lynn.macneil@investorsgroup.com
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