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Estate planning mistakes can threaten Florida retirees' assets

Florida retirees frequently overlook proven strategies that can assure them a comfortable life in retirement. That is why it is important for anyone approaching retirement to heed some effective recommendations that can help set retirees up for the best potential financial future.

Being careful about taxes is one way people can retain more assets. Many retirees pay more than they should in taxes, but changing legal residency and being smart about when to take withdrawals from a retirement account can significantly reduce tax liabilities. For example, Florida has no income tax, yet many retirees who meet the residency requirements here do not take advantage of this benefit.

Retirees should also take care to properly estimate potential healthcare costs. Fidelity Investments estimates that a typical couple retiring at 65 years old will need about $230,000 for medical costs, not including long-term care. Medicare does not cover long-term care and various other expenses. It is therefore a good idea to plan ahead and consider purchasing long-term care insurance, as well as supplemental insurance. These can provide a safety net so retirees' assets are not overly depleted by healthcare costs.

Being realistic about longevity can also help Floridians plan. Studies show that, for an average 65-year-old couple, one member has a 63 percent chance of living to at least age 90. But many seniors seriously underestimate the number of years for which they will need savings or income.

Finally, seeking professional help in estate planning is generally the most solid step in the right direction. After all, relying solely on advice from family and friends can prove to be dangerous to a retiree's assets. Even well-intended advice can be wrong and drain resources unnecessarily. Also, failure to seek professional legal help soon enough in financial planning for retirement can result in disaster if a senior loses cognitive ability with age.

A legal professional who focuses on estate planning can provide important assistance to seniors and their families in navigating the increasingly complicated world of retirement.

Source: cbsnews.com, "Groundhog Day: 7 mistakes retirees make repeatedly," Dave Carpenter, Feb. 1, 2012

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