By Beverly DeVeny
Director of Retirement Education
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2018 is right around the corner. We will be dealing with massive changes to the tax code due to the enactment into law of the Tax Cuts and Jobs Act. Some of those changes are going to apply to you and some of those changes will affect your retirement and assets that you hope will go to your heirs. Are you ready?
Any time there are significant changes to the tax code, it is essential that you review your retirement and wealth transfer strategies. Under the new law, the federal estate tax exemption increased and the gulf between state and federal estate taxes grew wider. Therefore, planning is more important than ever. The older your estate planning documents are, the more likely it is that they are not going to work well under the new rules. Your beneficiaries could be negatively impacted. Do you even have the right beneficiaries named in your documents and on your beneficiary forms?
Once the year-end festivities have subsided and the winter doldrums have set in, you have the perfect opportunity (and excuse) to review your financial and estate plans. Check your beneficiary forms to see if they need to be updated. If a trust is named as the beneficiary, is it still needed and is the trust document still up-to-date? Has the trust document been furnished to relevant parties, such as the plan administrator of any company plan which lists the trust as a beneficiary? How about your life insurance? Do you have the right beneficiaries named and/or is the policy still needed?
When did you last review your investment or savings accounts transactions, including retirement accounts? Many states have reduced the time needed for an account to be declared inactive and escheated to the state. A small transaction done once a year can save you a lot of time and trouble by preventing an escheatment.
Are you receiving statements for all your retirement plans and other financial accounts? A missing statement could occur if you have moved and not updated your address or it could be an indicator of identity theft.
A review of the investments in your retirement and investment accounts is another thing to think about. With all the tax changes coming into effect, do your investments still make sense or do they need to be rebalanced or adjusted. A call to your investment advisor could be a smart move.
We think of a new year as a new beginning. Many of us resolve to eat better, exercise more, or lose weight – in other words make positive changes for a “better” you in the new year. We should apply that thought of making positive changes to our financial plans, retirement savings, and estate plans as well, especially this year.
Wishing you all a happy, healthy, and prosperous New Year!