Planning for a long and prosperous retirement is no longer just about the money; because of the recession, boomers are needing to reboot their retirement plans. Here are six tips to get you on the right track again:
1. Get healthy. This should take priority even over saving more money, since significantly improving your physical health will reduce the chances you will need expensive healthcare procedures. Exercise more, eat better and take advantage of any wellness programs offered by your employer. 2. Spend less. Prioritize what you need versus what you want, and focus on spending just enough to meet your needs. 3. Save more. Add more to your 401(k) or IRA; increasing your savings by just 1 to 2% of your pay can make a noticeable difference to your savings without impacting your current lifestyle. 4. Pay off debt. Research shows that people who reduce or eliminate their debt prior to retirement do a lot better than those who carry debt into retirement. Pay off as many of your credit cards as possible and consider refinancing your house to take advantage of historic low mortgage rates. 5. Continue working. Most boomers will need to work at least part-time once they retire. Start investigating the kind of work you might enjoy doing. If you earn enough to cover your daily expenses, you won't have to touch savings, which can continue to grow until you are fully retired. 6. Maintain your network. Retirees with a large network of friends and family do better in retirement and live longer. Be sure you continue to nurture your network as you ease your way into retirement. If you’d like to learn more about how the new tax laws will affect you, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. As a Personal Family Lawyer®, I am often asked to help people who inherit a retirement account. The action you need to take with an inherited IRA depends upon your unique situation; the IRS has rules for each and recently announced that they will be cracking down on taxpayers who make mistakes with inherited IRAs. Here are some inherited IRA scenarios and options for each:
If the account you inherit was a 401(k) or traditional IRA and the decedent was at least 70 ½ years old: Contact the financial institution that holds the account to determine if the decedent had already taken the required minimum distribution for the year they died. If they did not, you will need to do so. If you are the spouse of the deceased account owner: You can roll an inherited IRA into your own IRA to postpone taking distributions until you turn 70 ½. If you take distributions before you turn 59 ½, you may be subject to early withdrawal penalties. You can also leave it where it is and postpone taking the required minimum distribution until your deceased spouse would have turned 70 ½. If you are not the spouse: You must first re-title the account to name you as the beneficiary. You will then be required to start taking required minimum distributions, which can be stretched out over your lifetime, beginning by Dec. 31 of the year following the death of the account owner. If there are secondary beneficiaries: You have the option of disclaiming the inherited account, which will allow it to pass directly to the secondary beneficiaries. This is usually done to avoid creditors or to minimize income or estate taxes. If there are multiple beneficiaries: You are allowed to split the account into separate IRAs for each beneficiary. If you’d like to learn more about how to treat inherited IRAs or have other estate planning questions, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. Balancing the needs of a multi-generational blended family with your own wishes can be a complicated task, especially when it comes to estate planning. With a majority of Americans not only marrying once, but twice, three or even four times during their lives, it is a challenge that will come to many.
Even when blended family members get along, estate planning can be complicated. The potential for acrimony among family members can be so great that some people choose to avoid addressing the issue of who will inherit what altogether. However, as any estate planning attorney will tell you, having no plan is not a good plan. Overall, an effective estate plan for a blended family will ensure that: · Any ex-spouses do not inherit; · Your own children are protected; · Your current spouse is provided for; · Any estate taxes are minimized. Estate plans are as individualistic as the families they cover, so it is always advisable to consult with an expert before finalizing your plan. Although there are a plethora of online resources and books on the subject, estate planning for the blended family does not make a good do-it-yourself project. A Personal Family Lawyer can provide you with the individual attention you need to create an estate plan for your blended family. If you’d like to learn more about estate planning for blended families, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. With longer life spans comes the necessity to be sure your money is around at least as long as you are. Longevity insurance – where you pay a certain sum to an insurer when you’re in your 60s in exchange for monthly payments 20 or more years down the road – is a lesser known insurance product that is growing in popularity, especially considering potential cuts to Social Security benefits and the absence of pension plans in corporate America these days.
According to the Society of Actuaries, for a relatively healthy 65-year-old couple, chances are 63 percent that one of them will live until the age of 90 and 36 percent that one will make it to 95. Some financial advisors consider longevity insurance to be a good way to manage the risk of living to a ripe old age. Longevity insurance is an annuity with a fixed income that kicks in at a specified future age, usually 85. For example, a “maximum income” version of MetLife’s longevity insurance with a lump sum investment of $100,000 at age 65 would pay a woman a little over $59,000 annually once she reached the age of 85. A man would receive more – just under $74,000 a year – because men have shorter life spans than women. Under many longevity insurance policies, if you die before payments begin, your heirs are out of luck. However, there are alternate versions that guarantee some death benefits to heirs, but they are usually more expensive at the outset. If you’d like to learn more about long-term care and other estate planning strategies, call our office today to schedule a time for us to sit down and talk with a Personal Family Lawyer®. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. The holidays are traditionally the time for family gatherings, where generations come together and perform holiday rituals that have been passed down through the years. Part of those rituals includes material possessions – a well-worn set of silver at the holiday table, grandmother’s china or treasured tree ornaments from childhood.
When we sit down to that holiday meal, rarely do we contemplate Susie and Sally engaged in a bitter fight over the sterling butter knives. But it happens. A lot. To ensure that family memories are kept in a good place, your estate plan needs to include the orderly disposition of your material possessions. Unbeknownst to a lot of us, these possessions can hold special meaning to younger generations, and a family feud that could be in the offing can be avoided by advance planning. As part of your comprehensive estate plan, you may want to consider distributing some material possessions to your heirs prior to your death. If not, then you need to be sure you specify exactly who you want to get what by: · Listing in detail each item and the name of the intended recipient · Sharing this list with your estate executor as well as with your family · Including the list within your last will and testament or other estate planning documents If you’d like to learn more about estate planning strategies for your family, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session™, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. Estate planning rarely comes up in the course of regular conversation and if it does, it is usually involves what has happened to a celebrity’s fortune after his or her death. The distance is safe, so the conversation can take place.
But what if you need to discuss estate planning with a loved one – either your own estate plan or the one they have (or should have)? Because no one likes to talk about the death of someone close to them, we rarely have this critical conversation. But we all should. So how do you talk to a loved one about estate planning? A recent Forbes.com article provides some good tips: Pick the right time. If it is too difficult to schedule a time for this conversation, have it when you’re doing something else, like taking a walk. Start with a story. Use a story as an opener to the conversation, like the death of a celebrity and the havoc that failure to plan is wreaking on his or her estate or how you created your own estate plan. Talk separately. It may be easier for parents with more than one child to have separate conversations with each child rather than talking to a group. Use a team approach. If you are having difficulty getting your spouse to focus on estate planning issues, communicate your concerns as a couple. Talk about how aging means making mature decisions and how you need to protect children with estate planning. Ask for feedback. After discussing your estate plan with your children, ask them individually how they feel about what you have explained. It may not change what you are doing, but it will let them feel they have a voice. Explain why. Explain to your children the principles that guided your decision about how your estate is being divided. This lessens the chance of conflict among siblings. If you’d like to learn more about estate planning strategies for your family, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session™, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. While most parents have the inclination to treat all their children equally when it comes to an inheritance, Personal Family Lawyers® know that this is not always the wise choice. Here are some scenarios when an unequal distribution may be better:
Children of unequal wealth – If you have one child that is a successful entrepreneur and another that is a social worker, you might want to leave more to the less financially advantaged child. If that’s the case, be sure to either explain it to them beforehand or write a letter to be opened upon your death explaining your reasoning. Most children equate money with love, so don’t leave hard feelings behind. Poor money manager – if you have a child who is poor at managing money and always in debt, you have an alternative to leaving an inheritance outright: a spendthrift trust. Setting up a trust to disburse certain amounts at predetermined ages, or allocating funds for medical or educational expenses, can protect the inheritance throughout your child’s lifetime. In this case, it is best to name a trustee who is not a family member. Bad relationships – if you have a child who has one or more divorces or a string of bad relationships, you should probably consider establishing a trust in this case as well to shield assets from divorce. Special needs child – a child with special needs should be provided for through a special needs trust, which can be established in a way that protects his or her ability to receive necessary governmental assistance. Child with long-term care needs – if you have a child who has a chronic illness and needs expensive medical treatment, you might want to consider purchasing additional life insurance naming that child as beneficiary. If the child is a minor, you will need to set up a trust as beneficiary of the policy. Pre-existing loans – if you have made substantial loans to one child and not the others, you may wish to count those as an early inheritance and take them into account before estate assets are distributed. Estranged children – in some cases, parents want to disinherit a child. If you do decide to take this path, you need to be clear that you are intentionally disinheriting the child and not just simply leave them out of your estate plan. If you’d like to learn more about creating a personal estate plan, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. You’re never too young or too old to save for retirement; here are some guidelines by age group:
Under 25: If you graduated from college with debt, you are certainly not alone – the average debt burden is currently $26,500 for 65 percent of college graduates. Once you are able to get a good job, you should enroll in your employer’s 401(k) or other retirement savings plan and contribute enough to qualify for your employer’s match – usually six percent of salary. 25-40: You need to be putting away about 10 percent of your income towards retirement, and that should come before you save for a house or the kids’ college fund. 40-54: You are in your prime earning years and should be able to contribute 15 percent or more to your retirement savings. 55-70: Retirement is within sight now, so you may need to start adjusting your asset allocation to risk. The closer you are to retirement, the less risk you should be taking. You should also look into long-term care insurance to protect retirement assets. Over 70: Your withdrawal rate should generally be no more than four percent of your total portfolio value, not including an emergency reserve fund, to supplement your income from Social Security or pension. Once you are over 70 ½, you must take the Required Minimum Distribution (RMD) from your traditional IRA and 401(k) every year, which is calculated based on your life expectancy according to IRS Publication 590. If you’d like to learn more about retirement planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. According to a recent study by the Investor Protection Trust and Investor Protection Institute, the top three ways that the elderly could be financially exploited are:
· Theft of funds or property by family members · Theft of funds or property by caregivers · Financial scams by strangers It is estimated that one in nine seniors has been a victim of financial abuse in the past year, so what can you do to protect elderly parents from financial fraud? Here are some tips: Seek out a financial abuse prevention seminar in your local area. Many senior centers and organizations provide these programs, so choose one and go with your parent(s) as an opportunity to do something social with them. Put your parents’ finances on auto-pilot by enrolling them in direct deposit for Social Security, pension, retirement and investment income. Set up automatic bill pay for as many bills as possible, and help them pay their bills online. Check in with them frequently and ask them directly if they have been solicited by anyone who visited or called. If you live nearby, visit in person. Some experts advise those with elderly parents who become incapable of handling investments to invest a portion of their retirement income into a low-cost, immediate-fixed or inflation-adjusted annuity from a reputable insurance company. This will provide a guaranteed lifetime income that cannot be lost to fraud or abuse. If a parent’s savings are still in their former employer’s 401(k) plan, consider keeping it there. These plans are strictly regulated for the exclusive benefit of employees, and may yield the best investment deal possible. If you’d like to learn more about estate planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. |
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