ESTATE & FINANCIAL PLANNING: THE PATH TO A PROSPEROUS FUTURE.

• Author: Davis, Kathy
• Position: Statistical Data Included

Nothing is certain in life but death and taxes. Benjamin Franklin's words of wisdom seem a rude interruption to our retirement dreams of fly- fishing the pristine waters of Alaska, exploring exotic foreign lands or spending more time at the beach. But we should heed them. "Eighty to 90% of people who die in this country die with an incompetent estate plan," says Van Hughes, chief executive officer of Commerce Group, a Charlotte-based company that provides financial-advisory firms with access to a national network of accounting, financial, legal and tax professionals. "Planning ahead is certainly a significant issue," he says.

Estate and retirement planning can be complicated, often involving coordination of expertise and advice from accountants, stockbrokers, insurance agents, real-estate advisers, lawyers and financial planners. When should you start? "Now. Right away," says Keith Hiatt, tax partner with the Greensboro CPA firm Breslow, Starling, Frost, Warner & Boger PLLC. Even 25-year-olds need wills to make sure their assets are distributed according to their wishes should they die. Hiatt adds: "The sooner you begin saving for retirement, the better off you're going to be.

Scott Thomas is director of financial planning at Greensboro's Scott Financial Management, a division of Virginia-based Scott Insurance. He advises having a game plan for retirement. "It's difficult to hit a target if you don't know what the target is." Under the old rule of thumb, you needed 70% to 80% of your pre-retirement income to support your post-retirement lifestyle, but that no longer holds true. "It's a misconception that you don't need as much when you get older," says Mary Rinehart, president of Charlotte-based Rinehart & Associates, a financial-planning and asset-management firm. People are living longer and are more active during their 5Os and 60s. They may spend even more than they did pre-retirement, but on different things, such as travel.

The combination of early retirement and increasing longevity has changed the investment portfolio mix that financial advisers recommend for retirees. People used to move from the stock market to fixed-income securities when they turned 65 to protect their principal. Now, says Heather Linton, president of Linton & Associates in Raleigh, a CPA and consulting firm, if someone retires at 55 and lives to be 85, inflation will be as big a threat to their portfolio as the loss of principal. To keep up with inflation, most...