Berman & Asbel, LLP

Estate planning serves as buffer against financial shocks

Waiting too long to evaluate retirement needs and put an estate plan together can put Pennsylvania residents at risk of financial shocks. A recent study explored the experiences of eight focus groups of retirees to learn more about how they arrived at decisions, how their finances were evaluated prior to retirement and their success in retirement years. The retirees in the focus group were defined as “resource-constrained.”

The study revealed that the retirees in these focus groups tended not to have a great deal of retirement planning and tended to work through short-term financial problems without considering the long-term impacts. As a result, this group of retired individuals was less likely to be prepared for major medical expenses and the ramifications of major inflation. Very few tried to manage these risks with things like insurance.

Increasing longevity calls for earlier estate planning and goals that are aligned well into the future to limit the possibility of big financial shocks. The best scenario generally is one in which individuals and couples set up meetings with an estate planner sooner rather than later. Long-term strategizing regarding things like trusts, asset protection, and inheritances should receive attention before retirement.

Although longevity is increasing, not taking planning opportunities comes at a cost reflective of the old saying “failing to plan means planning to fail.” Estate planning done early can ensure that your wishes are carried out and can help to insulate from financial shocks. An experienced attorney may be able to assist those with questions regarding estate planning.

Source: BenefitsPro.Com, “’Resource-constrained Americans don’t plan for retirement, face financial shocks,” Lisa Barron, April 25, 2014

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