Monday, April 7, 2014
Tax time is also an effective time for an annual financial checkup. Here are three essential nontax items retirees should be reviewing at tax time:
- Core Holdings. These investments are your survival insurance, assets you never plan to sell unless it really hits the fan. They should make up about 10% of your net worth and include precious metals, farmland, or other investments that historically hold their value against inflation.
- Long-term care coverage. Whether it’s nursing home insurance, self-insurance, or something else, you need to have a way to pay for the likelihood of needing long-term care. And if you think you will be able to rely on Medicaid as your backup plan, consult an elder-law attorney to be certain.
- Estate Plan. Make your intentions clear in an up-to-date and properly executed will. And make sure people know where to find it. Consider a pour-over will to save your family from the headaches of probate. And consider a Grantor Retained Annuity Trust or a Crummey trust if you’re worried about the estate tax.
See Dennis Miller, 3 Essential Nontax Items to Review at Tax Time, Market Watch, Apr. 2, 2014.