Your estate plan and your retirement intentions are likely linked, especially if you’re not sure how much money you’ll really need in retirement. This can be a difficult question to answer, especially in light of inflation and the uncertainty around whether you might need to tap into retirement savings for healthcare needs in the future.

It’s important to think ahead about your financial goals and your anticipated spending goals in retirement. Using simple equations and formulas can help you determine whether or not your current retirement savings are appropriate, and whether your money is likely to last. The problem for so many people approaching retirement age is they don’t have a firm understanding on the amount of money they spend each year.

Most people can easily figure this out by looking at all of the accounts from which they make payments, such as credit cards, cash withdrawals, and bank statements. Your starting balance, deposits, withdrawals and debits and ending balance details are all on monthly sheets sent to you from your bank. Take the last 12 monthly total withdrawal numbers and add them up. This total is how much money is spent each year by you. Many people underestimate this by 30% or even more.

Once you understand how you’re currently spending now, you can think about the changes that you might need to make in your strategy to adapt for retirement. Knowing what you’re spending now is a great starting point. If you have further questions about aligning your estate plan and your retirement plan, set up a time to consult with an experienced and qualified lawyer. Our Pasadena estate planning attorneys can help you think about how your retirement planning influences your estate plan and vice versa.

 

 

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