Baby Boomer Retirement Planning 2 (a series) by Bill Roberts
OK. We have determined exactly in Part 1 how much monthly income we will need at retirement. So how do we accomplish this? Well, we will get into this soon enough, but there are some things that need to be taken care of first.
So let's get started. If you haven't established a Family Living Trust package and placed your assets within the trust then that should be your first step. Don't try to do this yourself. A misstep here could bring the whole house down. Your assets must be protected. A lawyer who specializes in preparing these packages of documents is absolutely essential. This package should contain (at the minimum):
- Will
- Living Trust
- Financial Powers of Attorney
- Durable Power of Attorney for Health Care or an Advance Health Care Directive
As soon as the trust is created all your assets should be placed (deeded to) within the trust.
The next step is to incorporate a business if you don't already have one. This is both a tax planning tool and a retirement planning tool. Your corporation should be a "C" corporation and NOT an "S" corporation. Here is a case of when you shouldn't listen to your CPA. He will tell you that you will be double-taxed on your income. This is not necessarily true. A properly managed corporation will have little or no taxable income. The profits will be spent on things that you determine to be important to the operation of the business, which includes your salary, expenses, and benefits. Plus the "C" corporation provides stronger defenses against any claim of being simply an alter ego for you. But the most important reason is that the IRS allows "C" corps to write-off many more things than "S" corps and allows for greater health care and retirement plans. You really must insist with your tax preparer that he doesn't elect to classify your corporation as an "S" corp.
Since we are talking about "entities" you should know that we are going to need a few more LLCs and trusts, but that is the subject of my next article.
Stay tuned.
If you need help assessing your needs or setting up your retirement plan give Bill Roberts a call at (619) 244-4610.
NEXT
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Bill,
per your request I thought I'd stop by...
This is a very sticky subject for me, as my wife is currently dying of cancer - right now I am her primary caregiver as she is home in bed on Hospice care. (which is why I have so much time to blog)
My wife was diagnosed 12 years ago. I took the attitude of live for today and I'll worry about tomorrow later. So here I am at 53 years old and very little other than the equity in my home and the material comforts we have accumulated.
As far as the documents you are talking about - we just purchased a book from the NOLO publishers called QUICKEN WILLMAKER and it has all of those forms and a whole lot more. Now, I'm not saying they are bullet proof - but we both know that ANY legal document can be pierced if you pay the right attorney enough money. So, not expecting any challenges - I think the $50 we spent on the book with a CD form library was a God send - and yes, the book and forms are updated annually and yes we have the 2007 edition. I think if cost right around $50 at Barnes & Noble.
Now, I understand the more complicated ones financial picture is the more intricate the documents have to be and the more money the attorneys make. But for simple needs, I am very pleased with what I have been able to accomplish. (I do have para-legal training/experience in my background)
Not sure this is what you wanted to hear, her. If this is counter-productive to you blog and series, just go ahead and delete this comment - you won't hurt my feelings (in case you havn't been able to tell)
Now Have a Blessed Day,
John Occhi, Hemet REALTOR
Mission Grove Realty