Estate planning is critical, and it’s far more than just making a will. You also need to think about things like long-term care planning, Medicare, Medicaid, Social Security and much more.
The financial impact of even one small mistake can be huge. With that in mind, here are five mistakes you should try hard to avoid:
- Don’t assume anything about Medicare. For instance, it’s commonly assumed that you can use it for long-term care, but that’s not actually true. Failing to look into the details means you don’t plan appropriately.
- Don’t assume Social Security will cover everything. People know they’re going to get payments, and they sometimes assume they’ll have plenty to live off of with no other income. The reality, though, is that the Social Security Administration (SSA) claims the average benefit clocks in at just $1,230 per month.
- Don’t forget about inflation. The rate is typically about 2.55 percent. This can eat into your long-term savings and make you feel like you have more than you really do.
- Don’t plan for the best. Instead, experts often advise you to plan for the worst, especially considering your health. If all goes well, you’ll have extra money. That’s far preferable to planning for the best and finding yourself over your head in expenses.
- Don’t get scammed. The elderly are often targeted. Some studies say that over $2.6 billion is lost every year as over 1 million people get scammed.
As you can see, there is a lot to think about with estate planning. You can often avoid mistakes with a proactive approach and knowledge of all of your legal options.
Source: A Place for Mom, “6 Financial Planning Mistakes to Avoid,” Jeff Anderson, accessed Dec. 1, 2017