Everyone needs to think about retirement- and estate planning at some point in time because it's a crucial part of maintaining a healthy financial life. But many people tend to want to put it off indefinitely because it reminds them of their own mortality. Yes, retirement and estate planning is serious business, but it doesn't have to be difficult or depressing. What's more, the earlier you start with this crucial aspect of financial planning, the easier it will be to meet the goals you have in mind.

Start off by considering your current financial situation and where you want to be when you retire. This will help you figure out what you need to do to in order to ensure you'll have enough money to retire in the style that you envision. (If you're having a tough time figuring how much you'll need to save, there are a number of great retirement calculators available on the Internet.) Taking inventory of your current assets is also an important step in the process of your retirement and estate planning. Assets include income from investments, retirement savings, insurance policies, business interests and real estate holdings, just to name a few. Remember to include your residence in this list. Owning your home free and clear by the time you retire will make things much easier financially because you'll no longer have a big monthly mortgage payment haunting you.

Estate planning includes a number of elements, such as a will, a trust (if you've established one) and other items that will help you not only to disburse your assets to your heirs in the way that you prefer, but also taxes your estate and heirs the least. You can leave all of your assets to your spouse tax-free; however, in some cases, this may not be the best decision because doing so may increase the tax liability of your spouse's estate later on. You should also have a designated power of attorney to make your financial decisions should you become incapable of making them for yourself. You may also want this person to make any necessary medical decisions for you in the same situation, or you might specifically designate someone different for that task by means of a healthcare proxy (as described below). Keep in mind, however, that these persons may have to work in tandem in deciding your medical care.

Living wills and healthcare proxies both allow you to control what should be done if a severe illness or injury renders you incapable of making any further decisions on your own behalf. A living will is a document that, put bluntly, outlines exactly how much effort you want to be exercised to keep you alive. A healthcare proxy is a specific type of power of attorney that gives a person the oversight of your healthcare should you become incapable of making your own decisions. By having a living will or healthcare proxy, you can help make sure that your wishes are respected.

Retirement and estate planning does require you to take a long look at your money and your mortality, which are not fun tasks for anyone. Nevertheless, taking the necessary time to develop a comprehensive strategy will not only benefit you but everyone you love, as well.

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