Estate Planning Tips for Millennials
This post was updated on March 24, 2022
No doubt you've heard the jokes by now about "old millennials." If this is you, you need to be thinking about retirement and estate planning. While those born in the early 80s are right in the thick of it, millennials from the 90s can still get ahead of the pack. And if you're a Gen-Zer older than 18, it's time for you to start thinking about this too.
Generally, estate planning includes planning for death and incapacity. While the latter may not be something that you want to think about in your twenties or thirties, it's time to realize that estate planning is part of #adulting. Below are some basic — yet crucial — tips to help Millennials like you get started on long-term life plans.
Draft a Will and Set Your Beneficiaries
Even if you don't have significant assets, you may want to create a will to make sure your personal belongings are distributed how you want them to be after you die. Also, you can provide online and personal account information in your will so that your family can access your digital storage in the cloud or on your computer's hard drive. If you have significant assets, then drafting a will makes deciding how your assets are distributed much simpler for your heirs and family.
FindLaw makes estate planning easy. With FindLaw Legal Forms & Services, you can create a will, financial power of attorney, and health care directive in a few hours and from the comfort of your couch.
If you work for a company that provides or you purchased life insurance or other death benefits, make sure you properly designate who you want to receive those benefits. While people typically select their spouse, children, or parents, you can choose whomever you would like.
Create a Health Care Directive
A living will is a health care directive that explains what you want to happen if you are incapacitated or unable to make medical decisions on your own. You can share this document with your doctor, so they are aware of your wishes.
If you know that you want the doctor to discontinue life support if you are declared brain dead, then put it in writing. You could also note in your living will if you want to remain on life support or if you don't want to be revived if your heart stops during surgery. This document is the best way to ensure that you get what you want when you can't speak for yourself. You can also name a health care power of attorney to allow someone trusted to handle your health care when you cannot.
Online Account Planning
Sites like Google and Facebook allow you to designate a person (sometimes called a legacy) who can take over your accounts upon death or incapacity. While these events may seem too far off in the future or unthinkable, your digital life is part of who you are and is something that can live on forever if you prepare.
Start Saving ASAP
While retirement might be 40 years away, starting to save for retirement as soon as possible is the smartest thing you can do for your future self. With the way compound interest works, you are rewarded for saving money over long periods of time, and the rewards become much better after a few decades of interest compounding.
Make a Savings and Investment Plan
If you don't have a Roth IRA, a 401(k), or an employer-secured pension plan that you can plan to retire on, or even if you do, it is important to have a plan for your savings. With current savings account interest at major banks being essentially negligible, having an investment plan that provides for a return of at least 5% to 10% can make all the difference when it comes time to retire. Simply saving is not enough. Making sure your money is properly invested is critical, but be wary of high-risk, high-return investments. Taking risks to make income is one thing, but gambling with your retirement is not a wise move.