4 Tips on How to Plan for Retirement During a New Administration


The federal tax law continues to be in a state of flux. On both sides of the aisle, there is bickering over how Americans should find ways to get out of debt and fund the ongoing pandemic relief efforts. While the current administration agrees in part, there is equal movement on its side to find ways to support the government and the influx of capital needed to support the country during all phases of the pandemic. While most Americans are aware of the crisis, the majority of them do not know how it could impact them both now and in the future,

As a Florida estate planning and elder law firm, we are actively monitoring these issues on a daily basis. From planning for laws that could sunset, and thus end the benefits available to families by the end of this calendar year, to the notions of long-term tax structure changes, it is not easy for our clients. Add to this the fact that there is no certainty right now, and it is difficult for the families to determine how best to protect a lifetime of savings.

While Florida does not have a state estate tax that will impact our residents, federal law does. Let us share four key tips on how to protect yourself and plan for retirement as we face these uncertain times together.

1. Develop a relationship with your Florida estate planning attorney. While this may seem unusual at first, estate planning is not a one-time transaction. Estate planning should encompass your goals for your legacy, but this cannot be done if you do not commit to at least periodic check-ins. Your estate planning attorney knows what is happening not only in your planning but on the state and national level and can guide you to make the best decisions for yourself now and as you plan for retirement in the future.

2. Retirement planning is changing. Americans are working longer than ever before. The current administration and legislature continue to comment on moving back the retirement age. This is being done, first, because many Americans are choosing to work past traditional retirement age but also because there is a need for Americans to work longer to support the public benefits system. Unfortunately, both sides, as well as the administration, are discussing a reduction in retirement benefits to accommodate the high national debt.

3. Retirement planning tools may be at risk. In estate planning, there are estate planning tools that can ensure that a large portion of a family’s generational wealth can pass on tax free. The current administration and the legislature, specifically the Ways and Means Committee, are potentially setting up a structure that would reduce these planning techniques. The result would be that the legacy an American could leave at death tax-free would be reduced in 2022.

4. Strong retirement planning means acting now. Again, if your asset base exceeds $10 million, you should be meeting with your Florida estate planning attorney before year end. There are specific estate planning trusts, such as Spousal Limited Access Trusts (SLATs), that would be grandfathered in if completed before year end. Grantor trusts that take advantage of the higher unified credit amount, like the SLAT, are at risk should the Tax Cuts and Jobs Act of 2017 (TCJA) end.
Retirement planning means ensuring you have a plan to protect your way of life as you leave your working years. It also means preparing a legacy for yourself, your spouse, and your family. Uncertainty in the tax structure only complicates retirement planning. It is critical to be diligent in your Florida estate planning to ensure that you do not miss the benefits that could save you and your family hundreds of thousands, or even millions, of dollars.

Let us help you successfully navigate this challenging time. Whether you have an existing Florida estate plan or need to create one for the first time, we encourage you to contact our office as soon as possible. Many of these options could sunset at the end of the year, and you do not want your retirement planning or your legacy to be jeopardized.

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