Ask Mary Beth: Money Q & A |
| |
Will the kids inherit our nest egg?
My husband and I have been
retired for seven years. We have enough retirement income that we are still able
to save some money, so our nest egg is still intact. We don't specifically set
money aside for the kids to inherit, but I hope there is an inheritance left for
them when we are gone. Any suggestions?
Mary Beth answers:
Many financial experts adhere to a 4 percent
formula as a way of stretching out your nest egg. The formula estimates that if
you rely on your Social Security and pension for most of your income and only
withdraw 4 percent of your nest egg each year, your money should last about 30
years.
It is a very conservative formula designed to compensate for any serious
downturns in the market during your retirement. If 4 percent is too meager for
your needs, you can boost it a bit, but beware that you may have to cut back your
spending habits later in life.
Assuming you don't live the full 30 years--or however long your money actually
lasts--there should be money left for the kids. If your estate is worth more than
$600,000, you should discuss your estate plan with a qualified attorney who can
set up trusts and make arrangements to minimize federal estate taxes. After all,
wouldn't you rather leave your money to your kids than Uncle Sam?
|
