Retirement and Estate Planning
Retirement accumulation and decumulation
Candidates should understand the shift from accumulation to distribution, the role of savings rate, time horizon, and sequence-of-returns risk. A key trap: two portfolios with the same average return can produce very different outcomes if poor returns occur early in retirement while withdrawals are being taken. Know the concept of a safe withdrawal rate as a planning heuristic, not a guarantee.
Employer plans and Social Security
Distinguish defined benefit (promised benefit, employer bears investment risk) from defined contribution (account balance, employee bears risk). Know vesting, matching, and the tax treatment of contributions and distributions. For Social Security, understand that claiming age affects the benefit, and that spousal and survivor benefits exist.
Estate planning tools
Know the core documents: will, beneficiary designations, powers of attorney, healthcare directives, and trusts. A frequent trap is that beneficiary designations on retirement accounts and insurance generally override the will - the will does not control those assets. Understand probate versus non-probate transfer, intestacy (dying without a valid will), and the difference between a guardian for minors and a trustee for assets.
Worked rule of thumb
For gifting, annual exclusion gifts avoid gift tax reporting up to the statutory limit per recipient, and lifetime exemption applies above that. For estate liquidity, life insurance owned outside the estate can provide cash to pay taxes without forced asset sales - but ownership and beneficiary formality determine whether proceeds are included in the estate.
Coordination
Retirement and estate plans must be coordinated: the beneficiary designation is the plan.