Estate planning is a necessary part of stewardship

“How shall I make a return to the LORD for all the good he has done for me?”
– Psalm 116:12

For most of us, thinking about estate planning is about as pleasant as a root canal. Facing our mortality is one of the hardest things we must do in life.

However, for Catholics, estate planning and end-of-life planning is our final act of Christian stewardship. We exercise a spiritual privilege when we plan our estates and consider: 1) passing on an inheritance; 2) making health care decisions in conformity with pro-life teachings; 3) sharing our faith through proper planning; and 4) leaving a legacy as a steward for the common good.

The Catholic Foundation of the Archdiocese of New Orleans provides guidance to individuals during their estate-planning process. Below are five concerns we hear frequently expressed.

1. Do I have enough saved for retirement?
Many individuals are concerned about whether their IRA is sufficient to maintain their standard of living. There are five steps to determine if you have enough to retire:

➤ What are your total annual contributions to retirement savings?

➤ Multiply that number by the number of years left until retirement.

➤ Add your current retirement savings.

➤ Divide by the number of years you expect to live in retirement.

➤ Add that to other guaranteed sources of income, e.g., Social Security.

Is that number enough to support your desired retirement lifestyle: yes or no?

While this simple calculation does not take into account growth rate on investments or inflation, it’s a good starting place.

2. What about longer life expectancies?
Life expectancy for Americans today is about 78 years; however, no one can accurately tell us how long we’ll each live. Steps you can take to ensure that you enjoy your retirement without leaving loved ones in a poor financial situation include purchasing life insurance and selecting a death benefit amount that would allow your family to make up for your income and help pay for big events such as college and weddings. Be sure all beneficiaries are listed correctly for your life insurance, annuities and other retirement assets.

3. How can I provide for additional income after retirement?
Retirees need to budget carefully to stay within their fixed income. If the value of investments sinks after retirement, seniors often have little choice but to spend less or return to the workforce.

But there are creative ways to boost your retirement income. Shop around for the best interest rate on certificates of deposit, bonds and savings accounts. Review your investment portfolio and get rid of funds that consistently perform poorly. Identify investments that have high expenses and transfer that money into a comparable investment with lower management fees and expenses.

Finally, you can maximize your social security. For Americans born in 1943 or later, Social Security payments increase by 8 percent for each year you delay claiming between ages 62 and 70. That means if you have good health, you will generally be better off not taking the benefits early.

4. Can I receive a lifetime guaranteed income and still provide for my church, school and/or favorite charities?
You may want to make a substantial charitable gift but feel it is necessary to keep the income from your assets to support yourself during retirement. A charitable gift annuity (CGA) can provide you with a guaranteed income for life, partly tax-free, at payout rates much higher than current CDs or stock dividends.

This type of gift is simple: in exchange for a gift of assets, typically cash or stock, the Catholic Foundation promises to pay you a guaranteed lifetime income immediately or beginning at age 65. Gift Annuities may provide income to one or two people, and income may be continued after your lifetime to a surviving spouse.

You will realize significant tax advantages and an immediate charitable tax deduction. After your lifetime, any remaining funds may be used to establish a perpetual endowment in your name to serve your parish and/or favorite charities.

5. Whom do I call to assist me with estate and end-of-life planning?
The Catholic Foundation can recommend advisors who will ensure that your estate planning communicates your Catholic values. We can work with these professionals to provide counsel for techniques for charitable giving, including donor-advised funds, charitable gift annuities and charitable remainder and lead trusts.

Please contact Bob Menard at 596-3043 or Josephine Everly at 596-3031.

Josephine Everly is director of major gifts for the Catholic Foundation of the Archdiocese of New Orleans.