Money Matters

Many Americans Mistaken About Retirement & Estate Taxes

A recent survey by American Skandia shows that nearly two-thirds of Americans believe they should stay conservatively invested in retirement rather than investing in equities. However, this may not be the best option given that many will spend 20 to 30 years or even longer in retirement. Rising longevity and inflation have increased the cost of retirement, and in many cases, conservative, fixed-income investments will not suffice.

Also, the survey revealed that many who do not expect to have taxable estates may lose money to estate taxes. In general, persons may be subject to estate taxes if they have owned a home for more than 20 years, have been invested in an IRA or 401(k) for more than 15 years, expect to get an inheritance, have a trust, or have an annual salary of more than $50,000.