Many wonder whether it’s more beneficial to rely on government benefits rather than amassing retirement funds, seeing individuals who have retired from their jobs without having enough assets to last retirement, but too much to receive any government benefits. Let’s take a look at potential considerations you may have thought about when considering government benefits.
Fast Fact: California recognizes couples as jointly owning all assets.
Even for some that have prepared for retirement well, seeing how easily others receive government benefit, question whether it may be beneficial for them to do likewise and even how to do it. In most cases, people may purposely transfer their hard-earned retirement assets to their children, or arrange their homes and investments under other people’s names, or try to keep their holdings in cash without investing at all.
However, if you have well-earned retirement assets, there are better methods than intentionally moving assets to your children to benefit from the government.
First, once you transfer your assets to your children, all future financial decisions can be cumbersome as you would require their consent.
Additionally, California recognizes couples as jointly owning all assets, and if children happen to divorce, the assets inherited from their parents are often calculated and divided into divorce funds.
More than anything, if holdings are kept as cash because there is no inflow of interest or income, the value is reduced by growing inflation and its inherent monetary value decreases.
Also, cash that is not held in banks or other investment institutions may be subject to audit by the IRS, making it difficult to spend as a lump sum. For those who have accumulated retirement assets, there are several reasons as to why it would be rather harmful in the long run to willingly liquidate your assets to benefit from the government.
It is recommended that you consult your finance advisor before transferring or liquidating your assets to prevent losses.
Disclosure: Profectus Financial does not provide legal or tax advise. Please consultyour own legal or tax advisor for qualification of any investment or tax strategies. This is for educational purposes only. This is not a soliciation of a particular investment product or company.