Retirement Income and Estate Planning

Social Security A public pension plan established by the US government in 1935 – defined benefit plan Recipients Retirees Survivors Disabled

Social Security Benefits received are based on earnings Factors When you retire How long you worked - number of quarters worked vs. year of birth (40 quarters for full benefits) Earned income

Social Security Start of benefits – age 62 – 67 Yearly amount of benefit increases as delay start Social Security Taxes (6.2% of income) Called FICA taxes (Federal Insurance Contributions Act) Taken out of paycheck along with other income taxes Medicare taxes (1.45%) also taken out Maximum Taxable Yearly Earnings (MTYE) Currently $106,800 No cap for Medicare

Estate Planning Estate All property and assets owned by an individual Estate Planning Creating a detailed plan for managing your estate according to your wishes after your death An essential part of financial and retirement planning

Estate Planning Will Legal declaration of a person’s wishes regarding the distribution of his or her estate after death Many different types If you die without one, you are intestate Key issues Executor Guardian Joint ownership

Estate Planning Trust A legal arrangement in which a designated person (trustee) manages the assets of the estate for the benefit of someone else Probate Legal procedure of proving that a will is valid Probate court validates the will and oversees the distribution of your assets