Is it too Scary to Look At?

During a recent dinner with family members, one of the scariest topics of 2022 came up. When you think of frightening family topics, perhaps one of these doozies comes to mind: “You ate lunch with someone testing positive for Covid-19 this week?” “Did you seriously vote for Donald Trump?” “So, you’re the one who took the silver out of Grandma’s house?” “I didn’t know you dated him. Wow.” Thankfully, it was none of those. It was even worse – the dreaded “retirement fund” conversation. Lately, that’s a topic that no one wants to think about. And when it came up during dinner, a typical response was given, “I don’t look at that. I don’t want to know how much is in there.” That’s very understandable. Because it is, indeed, terrifying to think about. This year, the stock market’s travails have resulted in $3 trillion in retirement savings being wiped out.

As scary as it is, you need to look at your retirement account statements. You must understand how the market’s fall has impacted your net worth. And you may need to speak to your estate planning attorney and financial planner to determine if your estate tax planning strategies still make sense given the likely decrease in your net worth. Sherry recently wrote a post providing updates on our Washington estate tax for 2022. Perhaps strategies that are currently being employed to reduce your potential estate tax liability could be curtailed or adjusted based on present circumstances? It is worth looking at, particularly the longer this bear market trudges along.

Perhaps, for example, you generally give annual exclusion gifts. Does that still make sense in 2022? Or, maybe your estate plan is overly complicated in its approach to tax planning in light of your decreased asset level? Although estate planning strategies are designed to hold up on a long-term basis, tweaks may be required as the economy ebbs and flows and life circumstances change.

Unfortunately, examining all of that requires you to do something that you might dread – actually looking at the balances in your retirement accounts. Although we can’t help you gather the courage to do that, if you do take a peek and then want to check in about your estate planning strategies, please let us know. We’d be happy to help.