Baby Boomers are now outnumbered by the millennial generation. However, their population may be smaller, but their wallets are not. Baby Boomers control approximately 70% of all the disposable income in the United States.
It’s estimated that over the next 20 years, as baby boomers age and die, there will be a transfer of wealth that surpasses $30 trillion. Some estimates put that number as high as $59 trillion. What is projected to be the largest transfer of wealth in history has been named the Great Wealth Transfer.
Transferring assets after death can be complicated. Different types of assets have different rules. Distributions from retirement accounts can be confusing and may be subject to taxes, depending upon how the funds are distributed. Without good planning, your family may end up paying what I call the “New Death Tax” Click here Other investments might have to go through probate, which is part of the public record and can be expensive.
When starting to put together a plan to transfer your assets, the first priority is to make sure that you have enough money to comfortably live out your retirement years. You must also consider the costs of future health care needs, including the possibility of needing to pay for long-term care. (See last blog) – put link in here ) After accounting for retirement and healthcare costs, you can develop a plan for whatever assets are left. Consider these questions:
Create Estate Plans With a Professional
Next, consider making an appointment with our office It’s worth the investment .We can help you make sure that your estate documents are set up so they properly carry out your wishes save money, avoid probate and in all provide peace of mine.
Consider a trust
In addition to a will and advance directives (Durable Power of Attorney, Health Care Surrogate and Living Will ) depending upon your situation, the we may recommend a trust, which is a useful tool to pass on wealth to the next generation. Structured properly, it can specify when your beneficiaries receive their money (at a specific age), and how that money can be used (for education or health care expenses or to pay down student debt.
Beneficiaries of Wealth Transfer Should Have a Plan
If you are a beneficiary of the Great Wealth Transfer, you should have a plan in place as well. Whether you expect to receive a little bit of money or a lot of money, a plan will help you make the most of it. One of the first things to consider is the tax impact of the money you will receive. Retirement accounts and annuities have tax consequences that differ from other assets. Make sure you understand the tax burden before you request any distributions. In this situation, it may be beneficial to seek the help of a tax professional so they can help you navigate the process with as little taxes owed as possible.
