Seanest - Jan Van Parijs Properties

Think about your legacy when planning your retirement investment

Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes”. We know this sounds morbid, but the reality is that planning for your retirement is an unavoidable task. It takes time and requires a fair amount of bureaucracy and administration.

 

retirement investment.jpg

 

Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes”. We know this sounds morbid, but the reality is that planning for your retirement is an unavoidable task. It takes time and requires a fair amount of bureaucracy and administration.

If viewed in positive light your retirement investments will benefit your loved ones and further generations to come. Your golden years should be spent soaking up the sun, enjoying the finest things life has to offer, and indulging in a lifestyle set at your pace. Sorting out retirement finances is one of the first things you should navigate to alleviate unnecessary financial worry.

Perhaps you’ve already dealt with necessary legalities by having your estate evaluated and drawing up your will. The bad news is that this is the easy part. It gets tricky when deciding who gets what and how much (including the tax man). The good news is that we can make the process simpler by outlining the potential ways to plan your retirement investment. There are three options to consider when leaving a legacy for your family:

 

An Individual Retirement Account (IRA)

 

Having an IRA gives your family the option to cash out the account or convert it to a beneficiary IRA. The downside is that they won’t be able to add money to the inherited IRA, but the lump sum already there will grow tax-free and can be used at a later stage in their lives.

 

Trusts

 

The key advantage of trusts is that they give you control over how and when your assets will be distributed after you die. They also reduce estate taxes and let you determine who and how much each beneficiary receives. The disadvantage is that setting one up can be expensive and isn’t as simple as having an IRA. Also, finding trustworthy and knowledgeable trustees can be a time-consuming drawback.

 

Real Estate

 

If you want to leave your family a retirement legacy that offers more than monetary value, we advocate property investment. Owning property in retirement, such as a holiday home, gives you a unique place to enjoy with your family and is a valuable asset to capitalise on if they ever need the funds.

Leaving your property to your children or grandchildren is also a clever way to minimise the tax you pay. If you wish to pass on your property to your children (or someone else) before you die, it’s treated as a gift and the ‘seven-year rule’ applies; you will not pay inheritance tax if you live in the property for less than seven years after gifting it.

Procuring property as a retirement investment also gives you the option of having additional income if you’re choosing the buy-to-let option. A holiday home situated on prime property enables you to rent it out, and if you’re not paying for it in full, the tenants will help pay off the mortgage. Eventually, the property will generate income and add to you and your beneficiaries’ wealth.

Mapping out a blueprint for retirement is not just about making sure you save enough money for the day your retire. Besides legacy succession, you’re also planning your post-retirement lifestyle and thinking how to best to budget under these new circumstances. There’s a wealth of information to understand and a lot to consider.

To further your knowledge on financial planning for retirement, you can download our ebook, The Ultimate Blueprint for Retirement Finance. If property investment appeals to you, then consider looking at our villas in Calpe. They make excellent retirement homes and are an asset to every investment portfolio.

 

 

Image credit: newshour-tc.pbs.org

Subscribe to our blog

Experience the Costa Blanca

Subscribe and you'll receive information on the real estate sector, interesting content on Calpe, Altea, Benissa, Moraira... and its surroundings, special offers and much more.