​Estimating how much money someone needs during retirement involves predicting their future expenses. Then, they can map that prediction onto their anticipated savings.

Common retirement income sources include accrued savings, Social Security, and work pensions. The exact amount from each income stream can depend on age, Social Security eligibility, and how much individuals set aside in their savings. Moreover, the amount someone should accumulate for retirement depends on their desired standard of living.

Financial planners recommend that individuals use the four percent rule. It assumes that retirees will spend four percent of their savings annually before factoring in unanticipated expenses, like vacations or emergencies. The rule provides some flexibility, but individuals should consider that annual expenses may increase with age due to medical care. Factors like their estimated life expectancy can also impact the minimum savings they'll need and how long they can use them before running out.

Investing in stocks, bonds, or other financial instruments presents a heightened risk but can yield more money than savings alone. Individuals who begin investing young can employ riskier strategies and transition to lower-risk products as they approach retirement age. If these savings measures don't meet a retiree's expenses, they can continue working full-time past retirement age or transition into working part-time.

​Gift tax is a component of estate planning that warrants a closer examination to ensure financial clarity and compliance. A gift tax includes any transfer of property or assets to another individual without receiving any significant form of compensation in return. This includes tangible items like cash and real estate and intangible assets like stocks and bonds.

Understanding the fundamentals of gift tax, including what constitutes a taxable gift, available exclusions and exemptions, and reporting obligations, empowers individuals to navigate the complexities of estate planning with confidence and foresight. It is worth noting that not all gifts are subject to taxation. The Internal Revenue Service (IRS) provides specific exclusions and exemptions to lessen the burden on taxpayers. These include the annual exclusion, allowing individuals to gift up to a specified amount each year per recipient without incurring gift tax. Additionally, gifts made for medical or educational expenses and those between spouses are often exempt from taxation.

Understanding reporting requirements is equally important. While gifts below the annual exclusion threshold typically do not require reporting, larger gifts require filing a gift tax return, Form 709, to disclose the details of the transaction. The form must then be attached to the annual tax return by the tax filing deadline of the year after the gift was made.

​Individual Retirement Accounts (IRAs) serve as indispensable tools for individuals aiming to protect their financial future through tax-advantaged savings. Whether one is self-employed or already contributing to a workplace retirement plan like a 401(k), IRAs present additional avenues for accumulating wealth and preparing for retirement.

An IRA, short for individual retirement account, constitutes a specialized savings account tailored to facilitate long-term retirement planning. Unlike employer-sponsored retirement plans such as the 401(k), IRAs extend accessibility to individuals with earned income, giving them a means to save and invest for retirement independently.

There are various types of IRAs. Each has its own distinct eligibility criteria, tax implications, and withdrawal rules. The four main types are traditional, Roth, SEP, and SIMPLE IRAs.

Traditional IRAs offer potential tax deductions for contributions. They defer taxation until retirement withdrawals, thereby fostering upfront tax savings and future growth. Conversely, Roth IRAs offer tax-free withdrawals of both contributions and investment gains during retirement, making them particularly advantageous for young investors.

SEP IRAs are especially tailored for self-employed individuals and small business owners. They feature flexible contribution limits and tax advantages conducive to retirement savings. Similarly, SIMPLE IRAs are designed for small businesses and self-employed individuals. They incorporate employer contributions and straightforward retirement savings options for employees.

Selecting the most suitable IRA hinges on various factors such as current income, tax situation, retirement goals, and risk tolerance. Consulting with a financial advisor or tax professional can provide valuable insights into selecting the optimal IRA.

Establishing an IRA is a relatively straightforward process, with options available through banks, investment firms, and online brokerages. Once opened, individuals can invest in a wide range of financial products, tailoring their investment strategy to their unique financial goals and risk tolerance.

Contribution limits for IRAs vary based on the type and the individual’s age, with tax considerations also playing a pivotal role. Deductible contributions and income phase-out ranges impact traditional IRAs, while Roth IRAs offer tax-free withdrawals under specified conditions. For example, one cannot withdraw funds until they reach the age of 59.5 years. Early withdrawals before this age often incur a 10 percent penalty, alongside income taxes. Exceptions exist for specific life events such as medical expenses and first-time home purchases, mitigating penalties under certain circumstances.

Contributing to an IRA allows one to harness the power of compound interest, enabling their savings to grow over time. For the 2023 tax year, eligible taxpayers can contribute up to $6,500 annually to a traditional or Roth IRA. These contributions offer the potential for substantial growth, especially when invested wisely. Assuming a 7 percent annual rate of return compounded over 40 years, this initial contribution could grow to an impressive $97,334 by the time of retirement age.

The annual IRA contribution limit of $6,500 may seem daunting, particularly for young savers. However, the full amount does not have to be deposited all at once. Instead, one can automate the contributions on a weekly, biweekly, or monthly basis depending on one’s financial situation.

IRAs represent great tools for retirement planning due to their tax advantages and investment opportunities, which cultivate long-term wealth. By grasping the different types of IRAs, contribution limits, tax implications, and withdrawal rules, individuals can make informed decisions to safeguard their financial future and enjoy a comfortable retirement. Whether prioritizing immediate tax savings or tax-free withdrawals in retirement, an IRA can be a crucial component of a long-term financial strategy for individuals navigating the path to retirement security.

​One of the critical decisions to be made regarding any IRA or 401(k) account is selecting a beneficiary for retirement benefits. This differs significantly from how beneficiaries are designated for insurance and other types of inherited assets such as stocks, real estate, and bank accounts. With the latter, the assets typically pass through with no taxes being assessed. However, this is not the case with traditional IRAs and pre-tax 401(k) plans. Beneficiaries are responsible for ordinary income taxes on these types of plans (unless they are set up as Roth IRAs or Roth 401(k) accounts).

The act of entering participation in a 401(k) or opening an IRA comes with documentation requirements that include designating beneficiaries (changes are made to this by completing a new beneficiary designation form). Whoever is named, a trust or will with differing instructions does not override this beneficiary designation (although state or federal statutes may give spouses special rights). Thus it makes sense to undertake a review of the beneficiary designation form every few years and ensure that all estate documents are in agreement, accurately reflecting changes in life circumstances.

Without a named beneficiary, the estate itself may wind up as the beneficiary. A lengthy probate process may begin that leads to higher taxes and fees assessed, and money held in limbo until probate is completed.

When selecting beneficiaries, it’s important to think carefully and consider those, whether child, spouse, niece, or caretaker, who will receive the most benefits from one’s assistance. One way of avoiding any gaps is to name a primary beneficiary (or beneficiaries), as well as secondary (contingent) beneficiaries. In cases where the primary beneficiary passes on before one does, or declines to inherit the assets, funds are directed to the secondary beneficiaries.

If the retirement funds are passing to a minor (generally under age 18), it’s important to assign a custodian as well. This person or entity manages the inheritance until a specified age is reached. Failing this, the state may step in and select a custodian that may prove to be a less than ideal choice.

One distinguishing feature of 401(k) plans centers on spousal beneficiary rights. With such plans, unless the spouse signs a waiver, he or she is considered the beneficiary. This can become complicated in cases of divorce and the spouse named being different than the current spouse. An example is a person who, following divorce, changes the 401(k) designation to his children and subsequently remarries. When he dies, because he did not secure a waiver from his second spouse, the money does not pass to the children (as designated) but to the current wife. The upshot of this type of contested situation is that it pays to undertake full beneficiary reviews following divorce, marriage, or the birth of children, and make updates that reflect one’s current preferences and life situation.

It’s worth noting that it’s possible to name multiple beneficiaries who share the distributed funds. This is typically accomplished by specifying percentage distributions, but may also be accomplished by splitting one account into several subaccounts, with one beneficiary assigned to each. The SECURE Act, passed in 2019, stipulates that inherited retirement accounts must be emptied within a decade. The option of taking distributions in the longer term, based on life expectancy, no longer exists.

​Financial literacy is making responsible or reasonable decisions about saving, spending, investing, borrowing, and earning. According to an investor education foundation study conducted by FINRA, four out of five young adults cannot pass a financial literacy quiz. These statistics underscore the need for more children to be taught financial literacy. Similarly, CBI Economics has demonstrated that financial literacy helps to raise early-career earning prospects by about 28 percent. This study further showed that students or young people who are financially literate are more likely to be entrepreneurs.

Managing one income requires a skill set that includes knowledge of mathematics, emotional intelligence, and budgeting. According to the Chief Executive of National Numeracy, Sam Sims, confidence with numbers is a non-negotiable life skill, particularly regarding money. Consequently, Cambridge University published a study demonstrating that people develop core financial skills at seven. The study showed that people develop the core behaviors that will determine their financial culture at a very young age.

One major reason it is important to teach your children financial literacy is that it helps them grow into financially confident adults. According to a 2022 report by CNBC, 50 percent of American adults struggle to have $400 in savings to cover contingency spending. When children are taught how to spend and save, they learn to establish a good relationship with money early on in life, a skill useful to them as adults. This is important because finances are often precarious, and preparing for emergencies like car repair, healthcare, and property damage is important.

In 2020, there was a 24 percent rise in the number of hospital emergency room visits for mental health among children aged 5 to 11. Similarly, in 2018, 68 percent of kids between the ages of eight and 16 reported worrying about their parents' financial situation. Psychologists have now concluded that money affects kids much more than previously believed when they gain knowledge about mental health. It also seems sense that economic concerns would impact children, as they can mirror adults' stress.

Similarly, financial literacy is important for children because money is everywhere and needs to be managed properly. Financial literacy helps children understand that adults are not entitled to money. Instead, one works for money. This is important because it teaches kids not to throw tantrums when they do not get the toys or privileges they want.

According to the Junior Achievement Survey, about 54 percent of teenagers have no idea how to navigate their financial future. This is particularly important because young adults set a trend for their financial future in their late teens and early twenties. Research by the University of Wisconsin Maidson revealed that financially literate children can avoid costly mistakes and death traps early enough in their young adult life. This means they will be more inclined to avoid payday loans with exorbitant interest rates.

You must use everyday situations instead of abstract and sophisticated financial concepts to teach your children financial literacy. For instance, while paying utility bills, you can teach them the importance of budgeting and how it makes it easier to categorize expenses. Also, several mobile applications and technologies provide simplified resources.

​While investing inevitably involves some risk, some investment methods are less so than others. You may have no control over the market’s performance, but you can decide how much you can lose should things go wrong. Risk management, coupled with other principles, can maximize potential gains.

Before you invest, have an accurate picture of where you are and where you want to be financially. Your financial situation and goals determine the type of investments available to you. They also dictate how much risk you can take on.

Buy and hold is an investment strategy where you put your money in an asset and leave it there for a relatively long period. While it’s a common approach among stock investors, it works for other asset classes, like real estate and commodities like gold.

Buy and hold has several benefits. However, it ties up your capital, which can be limiting. It prevents you from taking advantage of short-term investment opportunities. What’s more, if fully invested it limits your ability to respond to financial emergencies.

Long-term investment calls for the ability and the willingness to endure the inevitable short-term declines for a chance at success over many years. Your investment will fluctuate. The stock you’ve invested in may drop significantly and stay low for months. Your ability to weather market turmoil may be the difference between success and failure.

The longer you let your money work for you, the higher your potential returns are likely to be, in part thanks to the power of compounding. Compounding applies not only to the invested capital, but also to the earnings. If you buy a stock that pays dividends and instead of withdrawing the dividends you use them to buy more shares, the investment will grow exponentially.

In addition to allowing you to leverage the power of compounding, staying invested also reduces transaction costs. The more frequently you get in and out of a market the higher the commissions and brokerage fees. Additionally, some states tax the sale of assets held long term more favorably than short-term investments.

Staying in a “losing” investment or watching it oscillate between profit and loss can be exasperating. Not pegging all your hopes on a single investment makes it less so. Putting your money in different investments spreads risk, ensuring no one investment can lead to a significant loss. This is called asset allocation.

Asset allocation refers to investing in a mix of asset classes (bonds, stocks, cash). It serves two purposes. Also called portfolio diversification, asset allocation is not just about where you put your money, but also how much of it you invest in a given vehicle. If you’ve decided to invest in stocks, consider investing in stocks in different industries to reduce the impact of potential losses on your portfolio.

When you enter the market can make or break your investment. Buying a stock at its peak can be expensive. With dollar cost averaging you can eliminate the pressure of trying to time the markets by scheduling regular stock purchases, without regard to the stock’s price.

A quarterly or annual portfolio review is also key. It helps you adjust exposure and allocation to reflect changes in market dynamics and your personal financial situation and goals. For example, if you’re approaching retirement, you may want to reduce exposure to volatile assets and shift to more stable ones.

​Each year, numerous families face the challenge of caring for their loved ones diagnosed with cancer. They have to manage treatment and medication regimens and devote time to their care. These responsibilities can significantly impact the families' emotional well-being and needs.

Realizing that a loved one has cancer can be shocking and saddening. Family members may feel various emotions, such as disbelief and confusion. Some family members may take time to accept the reality, while others may live in denial, hoping the news is a mistake or the diagnosis is less severe than the doctor suggests. Nevertheless, family members should accept the diagnosis and support the recommended treatment. Denial can cause delays in seeking necessary medical attention.

Cancer often triggers fear and anxiety among loved ones. They may worry about how the treatment will affect the loved one's quality of life. The fear of losing the person, especially if they play а central role in the family, is also common. While fear, anxiety, and related feelings typically decrease over time, they can intensify for some individuals. Acknowledging these emotions and taking appropriate steps to manage them can help the patient and loved ones cope better.

Transitioning to а new situation can be challenging for family members, who may respond differently to changing roles and responsibilities. Some may offer unwavering support, while others may emotionally withdraw or struggle to adapt, potentially causing tension or conflict within the family. Additionally, differing opinions about the most suitable course of action, such as alternative treatment or caregiving methods, can lead to frustration, blaming, or resentment.

Families dealing with a loved one's cancer treatment may also face financial burdens from medical bills, transportation, and caregiving expenses. These expenses can quickly add up and disrupt the family's budget and savings. Many families also worry about covering all necessary expenses while meeting their financial needs. Sometimes, the inability to meet these expenses can lead to emotional distress or depression.

Besides financial concerns, family members face significant challenges adapting to new roles. Spouses and children of cancer patients may need to increase their work hours or take on additional shifts to accommodate the patient's treatment. Taking time off work or school to provide care or taking on more demanding or difficult household tasks is also common. Such sudden changes can leave family members feeling frustrated or overwhelmed.

Cancer treatment can also lead to sexual problems. Research indicates that chemotherapy and radiotherapy can lower testosterone levels, cause erectile dysfunction, affect sexual drive in men, and sometimes make sex painful. These issues can create anxiety and distress for the patient and their partner, causing emotional obstacles to intimacy. Open communication between patients and their partners is vital to address these challenges. Sexual health experts can provide guidance and support to help manage these issues.

The best way for families to address emotional challenges related to cancer treatment is to communicate openly and honestly, working together to find solutions. Frank conversation can help alleviate different emotions, foster unity among family members, and increase understanding, all of which are key to supporting their ill loved one. Moreover, families should seek help from friends and others who can offer emotional and financial support. They may also find people willing to аssist with caregiving tasks, lessening their physical and emotional stress.

​Divorce planning is a financial process individuals must go through as they prepare for the dissolution of a marriage. Certain aspects of divorce planning are relatively straightforward, while other processes necessitate the support of a legal or financial professional.

Divorce planning should start with a simple but critical question: can the divorce be completed without involving the courts or lawyers. If there are any disputes or conflicts between parties, it is prudent for both parties to hire legal representation. However, in the event of an amicable separation, individuals can save time and money by coming to a settlement on their own. In 2019, the average divorce cost nearly $13,000, the bulk of which could be attributed to attorney’s fees.

The same thinking applies to child custody and visitation rights. If spouses can come to terms on a co-parenting arrangement, they can then move forward with divorce proceedings. If one spouse is pushing for sole custody or visitation standards the other spouse perceives as unfair, the divorce may need to move into mediation.

Whether an individual plans to go through with a divorce on their own or with legal representation, it is advisable to collect all marriage and financial documents. Examples of important documents include prenuptial and postnuptial agreements, estate planning documents, and all copies of life insurance policies. It is important for each spouse to understand their financial standing before, during, and after a divorce. With this in mind, it is also important to take a complete inventory of assets and debts. Other documents that can be informative during divorce proceedings include credit reports and property deeds.

Individuals can begin preparing for their new lives as part of the divorce planning process. For example, a person may have bad credit as a result of a financially unstable marriage, or may have no credit to speak of because major financial transactions were made in the other spouse’s name. In either case, they should begin building their own credit as soon as possible. Similarly, there is no need to wait for a divorce to be finalized in order to set up a personal bank account or find a new health insurance plan.

One of the most important aspects of divorce planning is where each spouse will live following the separation. Some couples may need or desire to sell their shared property as part of the divorce, while other divorces end with one spouse continuing to live in a previously shared home. If spouses want to sell property they can search for local real estate agents or speak to their legal and financial representation about real estate professionals specializing in divorce property sales. That said, if both parties wish to remain in the house, individuals are strongly advised to reach out to an experienced family law attorney.

Finally, one of the biggest parts of finalizing a divorce involves looking to the future. If a marriage consisted of one spouse working and one spouse managing the home, the latter will likely need to prepare a resume and start looking for a job. There are several paths to additional financial support during a divorce, including alimony and temporary spousal support, as well as various forms of child support.

​Financial planning helps create a roadmap for the future. It shapes both short-term and long-term financial goals and guides on what needs to happen to realize those goals and dreams. Ideally, family financial planning should begin when someone decides that getting married and having children is part of their future.

Family financial planning also helps plan for your family’s future and aids in financial decision-making. The goal is to ensure that resources are used efficiently to achieve family objectives while upholding family values. Planning also ensures that wealth is created and passed down to future generations.

Within the family, different people will have different needs and goals. With financial planning, these diverse goals can be harmonized or aligned to ensure that every family member is happy and gets the best out of their input.

The whole family is protected through financial planning as the goals are set collectively, and everybody works towards a common goal. Collective planning helps avoid poor individual financial decisions that can affect the whole family, as there are checks and balances. Regularly reviewing the family’s financial situation can also help in identifying the kind of adjustments required to take advantage of emerging opportunities that can benefit the whole family.

When it comes to money matters, a family needs to read from the same script to avoid conflicts and mistrust. That is possible through family financial planning. By involving both spouses and children in the planning process, a family can develop a shared vision and work together toward a better financial future.

Protecting family wealth is a key benefit of financial planning. The family can adopt several strategies such as creating trusts, taking insurance, or writing a will to ensure family resources are safe in case of the death or disability of the family head or main decision maker. This aspect of planning ensures that future family generations will have financial resources to support themselves, particularly when parents die leaving behind young, dependent children.

Also, parents should not put off retirement planning, particularly if they want to avoid being a burden on their children. A good place to start is by evaluating the resources a couple already has. From there, they can develop investment strategies that help grow the family wealth base.

Investment strategies for the family may include savings in pension funds or trusts, taking tax reduction steps, and minimizing wealth transfer associated costs, for example through making gifts to family members as they incur less taxation. Some of these family investment strategies are best implemented with the help of a financial advisor or retirement planner.

Family wealth planning can be an opportunity help to educate younger family members on wealth management. When future generations are involved in the planning process, they learn about family values and why it’s important to secure the family's future through prudent financial planning. Also, future generations can be equipped with critical skills they might need later to manage family wealth effectively and to make informed decisions that boost family resources.

​Ninety percent of wealthy families lose their wealth within three generations, which means heirs make decisions that eat away at their inheritance. Multigenerational wealth management can help wealthy families see that the transfer of wealth from one generation to the next is smooth.

A multigenerational wealth management company helps clients create enough wealth to pass on to the next generation. The work continues because the firm then makes clients of the heirs, and so on, building and protecting wealth as it did for the original client. However, for heirs to become clients, the firm must engage them with the same effort as the original client while engendering their trust.

In addition to retaining your client's heirs as future clients, the multigenerational wealth/asset management firm should prioritize client retention. While new client acquisition is integral to increasing their value, retaining clients is a more profitable way to expand their practice. A 1990 Bain & Company study found that if firms increased their client retention rate by at least 5 percent, they could increase profits from as little as 25 percent to as much as 95 percent, according to an April 2022 US News & World article.

Leaders of multigenerational wealth management companies should ensure their employees understand how their clients relate to their wealth. Advisors can grasp their clients' relationship to money through financial behavioral analytics.

Behavioral analytics studies how each client communicates exhibits with their advisor. This aspect of a multigenerational firm involves knowing how to talk to clients about taking care of money matters responsibly as a family. The advisor can take charge of conversations with their clients if they understand the person's relationship to money and communication style.

The advisor must understand the client's communication style and relationship to their wealth and be able to communicate with the client's heirs. Younger generations, such as Generation Z and Millennials, are old enough to have witnessed many events. Still, many have only been alive to see the last major stock market event, the Great Recession of 2008. Many have yet to form ideas regarding money during regular economic activity. Additionally, investment tools have allowed younger generations to take the reins of their portfolios.

Advisors should also be able to communicate the complexities of transferring wealth to heirs. In the case of a trust, policies related to tax benefits may prevent heirs from accessing money quickly.

Multigenerational wealth/asset management firms should also try to remain current on the latest technological innovations. Integrating the newest technologies is essential for younger generations who are used to the convenience of accessing information from anywhere and at any time of the day. A firm that does not incorporate an online platform that provides clients access to financial information or other technological innovations risks losing clients.

Finally, branding your firm is important to reach clients across generations. Carving out the brand for your firm will involve fleshing out your firm's niche or area in the financial services they serve. Further, each brand has a story behind it, and when facing the public, multigenerational firms must be able to communicate their brand story to clients across all generations. The brand story is integral to attracting customers and building the firm's reputation with clients across all generations.