Estate planning can help ensure you do not outlive your assets

Most of us in San Jose plan to retire someday. We set money aside in 401(k)s, stocks, mutual funds and other investments during our working years so we can live comfortably for the rest of our life.

And, while life expectancy has reduced slightly in the past two years, people in the United States can expect to live into their upper seventies or even longer. You may worry that you will outlive your retirement assets and then what?

Fortunately, through responsible spending and estate planning, you can ensure you will be able to support yourself financially for the rest of your living years.

Steps to take during your retirement

You can take steps during your retirement to stave off the possibility that you will outlive your retirement assets.

You can plan on taking out only 4% of your retirement assets the first year of your retirement, and then adjusting how much you take out of your retirement in the following year to mirror the rate of inflation.

You can also work with a financial advisor during your retirement. They can help you determine how much you can spend each year without depleting your assets during your lifetime.

Estate planning and retirement planning

Still, is there a way you can proactively avoid outliving your retirement assets? Sometimes you can achieve this through estate planning.

An estate plan can protect the assets in your retirement accounts. For example, assets placed in an irrevocable trust can no longer be touched by you. This way, you can ensure you will have assets to pass on to your heirs.

Also, many people develop debilitating mental health issues as they age. You could develop dementia or Alzheimer’s, which negatively affects your ability to make appropriate decisions or even be in touch with reality.

You can designate a person in your estate plan to serve as financial power of attorney. This person manages your financial affairs if you are no longer able to make rational decisions or make decisions that are in your best interests. This way, if you develop a mental disorder, your financial power of attorney can manage your retirement funds to ensure they will last the rest of your lifetime.

You can proactively protect your assets

comprehensive estate plan can help ensure you will have enough money to last the rest of your life. Also, you can take steps during your retirement to spread these assets out over time. This can help alleviate your worry that you will outlive your assets.

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