Steps to Take Before Committing to a Retirement Age

Looking ahead to retirement may raise more questions than you expect. Full retirement age is defined by the Social Security Administration between 65 and 67, depending on your actual year of birth. But your employer may define it in a different way. This can make it difficult to determine when is the most appropriate time for you to decide to retire. If you retire too early without having appropriate savings, you could wind up in financial trouble. A financial advisor, as well as other professionals, such as a CPA and your estate planning lawyer, can help you put together a plan to meet your needs and goals so that you feel confident about the decision that you have made.

Start by taking inventory of your assets, writing down your savings balance, every debt, liability, insurance policies, and potential income streams. Don’t forget about any other valuable possessions that could impact your overall net worth as well as your estate plan, such as vehicles, properties, and collections. Creating a worksheet that you can adjust on a regular basis is the best way to do this.

The Bureau of Labor Statistics reported that the average American age 55 or above spend $67,000 per year. Other experts recommend the benchmark of having a million dollars in order to retire comfortably. Make sure that you discuss your personal goals with an experienced financial team so that you can feel confident about your decisions and chart a course that can be adapted over time. You may need to adjust your retirement age based on individual preferences or shifting circumstances in your family. But having the inside of outside experts can make this much easier.

Contact our offices today to learn more about how retirement planning works in conjunction with your estate plan.

Is Your Retirement Aligned with a New Lifestyle?

Your lifestyle might have changed when you graduated with student loans, bought a house, or had children. Other issues like disability or caring for elderly loved ones can prompt a change here, too. But retirement is a big transition and it’s one well worth planning for in advance.

Entering retirement provides many different potential benefits for you, especially, if you have done the right amount of planning. However, a broad range of problems could potentially impact your life and make it difficult or impossible for you to achieve these goals.

Unfortunately, far too many people find this out too late, and it is crucial to think more about lessons you can learn from previous generations who have retired. Your lifestyle likely needs to change after retirement and your financial projections helping you save enough money were likely considered many years ago.

Some of the biggest mistakes that today’s retirees make is in failing to adjust their expenses to the new budget they have in retirement. Those who have worked over the course of many years might need to adjust their expenses in a dramatic way, especially, as it relates to clothing, entertainment, and dining out.

Relying on the amount of money you had while income was regular can be a drastic adjustment, especially, if your financial projections and what you actually have set aside in retirement don’t match well.

Furthermore, another big mistake that retirees make in this way is to forget that long-term care costs and healthcare expenses can come into play as a person gets older. If you did not plan properly or have enough set aside in your budget, these can represent even more dramatic cuts to your lifestyle expenses.

Make sure that you consult with a professional who has a dedicated support system in place to guide you through this process. Our NJ retirement and transition support services can assist you.

Delaying Social Security: Impact on Retirement

There are many different decisions that need to be made in the wake of an upcoming retirement. There are also so many different questions that are presented to people who are on the cusp of this retirement decision.

It can be overwhelming to think through all of these different aspects but having the right financial professionals to guide you through this process can help you feel more confident about your overall decision, and the next steps that you will take. Consider, for example, how delaying the step of Social Security can add significant dollars to your bottom line.

You can use various planners and calculators to think about your out of money age, your net worth and what you’ll draw from Social Security. This can help you make a firm decision about just how far on the horizon retirement is for you. Working a little bit longer may be to your benefit if it is still of interest, because it offers a variety of different advantages, especially as you delay those first social security payments. This will help you figure out the right decision for you and when to start bringing in the most money over your lifetime.

When you work a little longer, you can save more, delay tapping into your existing savings and earn more income for a longer period of time. You can also think carefully about what assets you already own and whether or not any transitions or additional savings need to be added to that bottom line. The right financial professionals are here to guide you through every transition and next step in your retirement life.

New Study Shows All Americans Are Thinking About Retirement Differently

Retirement is on plenty of people’s minds whether they are approaching it in the next decade or looking at it early on in their career. The recent pandemic has prompted plenty of people to rethink their career and retirement plans.

Many people are nervous in thinking about the prospect of retirement, but it is extremely important to follow through on a retirement planning strategy that helps to protect you and your loved ones. A recent Investopedia study of over 4000 people sought to explore Americans’ perception of financial literacy. The study found that two thirds of Gen X and Millennial adults are already planning for retirement, with 42% of Gen Z members doing the same.

Across generations, however, many Americans felt uncertain about their strategy of retirement planning, and many also believe that cryptocurrencies will feature prominently in their retirement planning future.

While many older adults don’t expect to retire early, those polled between the ages of 18 and 25 answered to the tune of nearly 60% that they intend to retire early. Those younger adults hope to stop working at age 57 for Gen Z and age 61 for millennials.

It’s important to think about how you can create and adapt your retirement planning strategy based on your individual goals. You should also align your retirement strategy with your estate plan. So set aside a time to meet with an experienced estate planning attorney to discuss your next steps.

Retirement and estate strategies should work together to help you accomplish your goals. Since you’ll want to support yourself and potentially help loved ones through retirement planning, contact a dedicated lawyer who can help you align your estate plan.

Who Keeps My Beneficiary Forms for My Retirement Plan?

When you create a retirement plan, you’ll need to establish beneficiaries for those assets when you pass away. These beneficiary designation forms are handled outside of the rest of your probated estate, meaning that the forms you have on file with your company will be used when you pass away regardless of what it says in your will.

These are used to determine who is entitled to defined contribution retirement plan benefits when the primary participant passes away. Unfortunately, this is often overlooked when the primary planned participant goes through major life changes, such as a divorce or a remarriage. This means that these forms could be outdated.

Typically, the plan sponsor or administrator is responsible for maintaining beneficiary designation forms, however, they may not realize it is their responsibility to keep these up to date when participants enroll electronically.

It is a good idea to put on your own calendar to conduct a thorough review of your estate plan including any beneficiary designations on an annual basis. This way you can make necessary updates as soon as possible and know that you have incorporated any recent changes in your life.

Your retirement plan assets do not pass outside of probate but should still be considered as part of your entire estate plan. Working with a lawyer allows you to go item by item through your estate plan to create a custom strategy for all of your assets. You might wish to equally distribute non-probate assets, for example, among a few family members. Probate assets could wind up tied up in court, so it’s important to think about these issues as you determine who should receive what.  




Study Finds Younger Workers Are Less Prepared for Retirement

A recent research study indicates that generation X does not have the same amount of retirement preparedness as baby boomers. This is especially concerning given that Gen X members will have to rely more on their own savings when it comes to retirement security overall.

The Employee Benefit Research Institute found that Gen X families were less likely to have defined benefit plans than baby boomer families did at the same ages. Furthermore, Gen X families were less likely to own a home which was a potential source of retirement security for many.

The study looked at the millennial generation and how it compares to Gen X at a similar point in their lives. Creating a comprehensive retirement plan and incorporating this as part of your evaluation of your estate plan is very important for protecting your interests.

Many people think primarily about reaching a target number when it comes to retirement planning, but this could also influence the assets that you leave behind to your loved ones. It is therefore important to consider the big picture and the possibility of outside and unexpected costs, such as those associated with long term care. Working directly with an estate planning lawyer will give you the opportunity to evaluate all of these key issues and determine the most appropriate way forward.

Are You Setup for Retirement Failure or Success?

If the past two years have handed down several lessons, at least one of them is that it helps to overprepare in the face of possible uncertainty. retirement-planning-estate-couple-together

Planning ahead for retirement means proactively thinking about the kind of lifestyle you want to achieve once you stop working full time, but you can’t afford to neglect the important issues around taxes.

If the vast majority of your retirement savings are in 401(k)s or IRAs, you might have a significant problem when it comes to taxes in the future. There is a good possibility in future years that when the Tax Cuts and Jobs Act of 2017 expires after 2025, your tax liability situation could be changed. You also need to think about the possible tax impacts of what might happen if you pass away first and your spouse inherits your tax deferred accounts.

There can also be significant tax implications for children who might need to withdraw money sooner than you intended from these tax deferred accounts. Having a comprehensive estate planning strategy that encompasses all of these key issues and prepares you for what to expect can be extremely important for your next steps. Set up a time to speak with an experienced lawyer today to craft a custom retirement and estate plan that work together and support you well into the future.

Waiting To Retire Could Be Better for Your Brain

New research from the Max Planck Institute for Demographic Research indicates that putting off retirement until a later age could slow down your rate of cognitive decline.

The research found that staying in your full time role until at least age 67 can help to protect you against cognitive impairment such as that caused by Alzheimer’s. Researchers looked at data pulled from the United States from more than 20,000

Americans between the ages of 55 and 75. The study indicates that there may be unintended consequences but positive ones of postponed retirement. You might also be able to pad your retirement accounts and develop passive income strains by staying in the labor market longer than you intended.

These important considerations should all be woven into the strategic plan for your estate plan and your retirement plan. The support of an experienced and dedicated lawyer can help you to identify your next steps and how to use your goal and legacy plans to accomplish your individual strategies and plans.

The support of an experienced lawyer is instrumental in helping you answer these important questions and to craft a custom holistic estate plan.

Study Show Few Employees in America Are Confident in Their Retirement

Do you have a solid retirement or estate plan? If not, you could be exposed to unnecessary challenges in the future or put your loved ones in a difficult situation.

Only 24% of US workers reported that they were very confident they’ll be able to retire in the lifestyle they want, according to a new study from the Trans America Center for Retirement Studies.

Demographic segments also have multiple implications for how people feel about retirement. In total, just under 35% of workers who have a household income of over $100,000, for example, are very confident about their future retirement, but that number drops all the way down to 14% for household incomes between $50,000 and $99,999.

Urban workers are more likely than rural and suburban workers to feel confident in their retirement abilities and those with full time positions are more confident that they’ll be able to retire at the age and lifestyle level they want. It becomes extremely important to consult with a knowledgeable estate planning lawyer about your individual goals and how they connect to your retirement strategy.

The support of a lawyer is instrumental in giving you the help to navigate through this process and increase your chances of a comprehensive planning strategy that adopts your retirement and estate planning goals.


What Happens If My Spouse and I Are Retiring at Different Times?

It is very important to get on the same page as your spouse when you’re thinking about retirement and estate planning goals. This may be the only way for you to protect your interests and to avoid unfortunate conversations or challenges in the future.

Although most couples know that retirement is important and assume they are on the same page, research has shown that many of them are thinking about things differently. This can be very problematic when you only realize this as you get closer to retirement. In fact 34% of couples disagree on whether or not they are spenders or savers, and 8/10 couples anticipate and desire living a comfortable retirement life but nearly half of them disagree on the age that they will retire at. Have a conversation with your spouse about when you intend to retire.

This can occur for several different reasons, such as age differences or one person may not be ready to retire. It can be advantageous to accrue more substantial benefits to your social security and save more and can even get a trial run for retirement when one couple plans to retire first. Retirement is a difficult transition and you need to have open and honest conversations with your spouse about it as well as adjust any estate and retirement plans to ensure you have accounted for any differences in your strategies.

In these circumstances, you deserve to have a lawyer walk you through the process so you have a clarity on what you have to anticipate and can help you move forward effectively.


What To Know About Investing for Income in Retirement

If you are a few decades away from retirement, now is the time to evaluate your current savings strategy and to evaluate the need to make any adjustment. Investments can serve as an important source of income in retirement especially when retirees can tap into investments that pay dividends.

The primary purpose of using dividends is that you can get a source of income without having to reduce the balance of the account or withdraw from the account. You may shift from a growth oriented investment approach to investing for income as you get closer to retirement and you won’t need to devote your complete portfolio to this kind of investment. But it’s a good opportunity to reevaluate where you’re at and how close you are to where you want to go. 

Most retirees benefit from having income producing assets to support pension payment, social security and other sources of income. There are many different ways to develop income producing assets but these can include: 

  • Dividend stocks
  • Rental property investments
  • Real estate crowdfunding
  • Private equity
  • Passive income streams developed as a business

The more you think through all of these options the better you can provide a cushion for the most important years of your retirement. Passive income streams can be an excellent source of money for retirees but many of these need to be started years in advance of your actual retirement amount to support you, such as creating an online business. For more information about how all of these different streams of income can come together in retirement and how this can affect your personal savings plan as well as your legacy, set up a time to meet with a lawyer.       

What to Consider a Safe Withdrawal Rate in Retirement

The concept of a safe withdrawal rate is important for thinking about your retirement. Knowing how much you might need to take each year to adjust for inflation and other unexpected costs will help you avoid financial challenges down the road. How do you know what’s enough to support you possibly for years to come?

The difficulty with determining a safe withdrawal rate is that there are so many factors that can influence what safe looks like for you. For example, the basic recommendation for retirement withdrawals is to take no more than 4% of the investment total value every year. The primary basis of this that proves problematic is that a retiree’s financial situation needs remain much the same for many years or even decades for this to be a safe approach.

A more cautious approach is to look at a 3% withdrawal rate which gives you a good starting point to consider what’s most important and unique to you. After you have thought about an appropriate withdrawal rate, look back at your portfolio to evaluate your living costs.

Can you make additional changes to your retirement, such as delaying your social security retirement age, continuing to work part time in retirement or reducing your expected retirement expenses? There are many other components that go into thinking about your retirement planning, such as longevity, health care costs, and your estate planning goals. All of these should be completed when thinking about your holistic estate planning and retirement planning strategy.        


What to Know About Your New 401(k) Statement

As part of your retirement plan and your estate plan, there is a good chance that your 401(k) is a big component of your future planning. You’ve spent most of your working life building up your retirement funds and preparing yourself for an estimated retirement age.

A new change coming to your 401(k) quarterly statement will help you make more appropriate plans for how you’ll use these benefits while you are alive and how to consider passing them onto your loved ones later. Sponsors of defined contribution retirement plans like 401(k) will soon include illustration about the lifetime income that you’ll be eligible to receive from your nest egg.

This will show how much income you could possibly receive from your 401(k) when using an annuity every single month. Estimated amounts will use the assumption that your payments would start immediately so take this into consideration as you read these new details. Bear in mind that these general numbers will apply to IRS mortality table lifetime expectancy rates and interest rates based on the current yield from the ten year treasury bond.

The primary purpose of the shift in 401(k) statements is to give participants more information about how their actual account value translates to monthly income. As you make these plans, you might adjust your estate planning strategies. Set aside time to speak with an experienced estate planning lawyer about your options.

Remember when looking ahead to your retirement age that there are many things you can do to support yourself during this time and also leave behind a legacy for your loved ones. As you get closer to retirement, continue to keep a closer eye on your savings strategies and consult with your estate planning law firm about making any necessary changes to meet your goals.


Top Questions to Ask Before Retiring Early

Retiring early might be something you’ve thought about for years and in fact, you’re already envisioning how you’ll spend your days. But retiring early requires advance planning of some of the complex factors associated with leaving the workforce before age 65.

Studies from the Employee Benefit Research Institute show that only 11% of workers today intend to retire before age 60. Many of them are concerned about health care, the loss associated with no more compound interest after they start drawing on their retirement accounts rather than contributing, and penalties that can be associated with pulling money out of 401(k) plans and traditional IRAs prior to age 59 ½.

Deciding whether or not this is the right fit for you also means thinking about the legacy you intend to leave behind.

Do you plan to pass on assets in your estate to beneficiaries like a charity or your own loved ones? If so, you’ll need the support of an experienced estate planning lawyer to guide you through this process. There are five major questions you’ll want to think about and align with your personal circumstances before deciding whether or not to retire early. These include:

  • Will I really be able to stop working?
  • What will I do to occupy my time?
  • Are my plans in line with my partner or spouse?
  • How will I get health insurance?
  • Will I need to get a part time job to make ends meet and will I be able to do this, given my experience in the current work environment?

These unique considerations all contribute towards your personal retirement plans and your overall estate planning goals. Set aside time to speak with a dedicated professional estate planning attorney so that you have clarity on what this means for you and whether or not early retirement is suited to your needs.


How Do Retirement Assets Fit into My Estate Plan?

Which assets should you plan to pass down? Which are those you should intend to live off of and how do taxes impact the equation? Thinking about all of these things together as part of your overall estate planning strategy is important and it should be discussed directly with your estate planning lawyer. Identifying your goals is the cornerstone of determining how your retirement assets fit into the bigger picture.

If you want to leave the bulk of your assets to certain beneficiaries or accomplish philanthropic and charitable goals, these are things that will need to work together or be planned for appropriately. Make sure that your accounts are titled and earmarked correctly, which can enable you to get maximum tax efficiency out of your estate plan.

You can avoid problems by carefully looking at titling, beneficiary designations and other legal documents on an annual basis to verify that all of your assets match up with your plans and expectations. You’ll want to plan for both your core assets and additional capital. Stable sources of income, such as social security payments, annuities and pensions can be supplemented by taking distributions from your taxable investments.

You’ll also want to think about how these taxable investments fit into the bigger picture of assets transfer in your estate planning. For more assistance with matching your retirement planning goals for your estate plan, set up a time to speak with an estate planning lawyer in your area.       


What Makes Post Retirement Planning Unique?

Most people are well aware of the fact that they need to plan for retirement. If you thought just figuring out how much to invest into your retirement plans was difficult, just wait until it comes time to consolidate all of the income streams within your retirement plans.

The three primary issues associated with pre-retirement planning are how much to invest, how to allocate your assets, and where the assets are located. In post-retirement, however, there are many more complicating factors that make it all the more important to retain the services of a professional.

Some of the concerns associated with post-retirement planning include when to begin Social Security benefits, when to draw down a pension, asset allocation, how much to withdraw, the differences between drawdowns from tax deferred versus taxable accounts and planning for how your estate will be used after you’re gone. It can be very difficult to predict the future but it is even more important to plan for it to make things easier for your loved ones and to ensure that you have a clear understanding of what will happen in your estate in the future.

Schedule a time to speak with an experienced and knowledgeable estate planning attorney in your area.

Two Things Every Qualified Retirement Plan and IRA Owner Should Do

In late 2019 Congress passed the Secure Act which represents some of the most significant changes to IRAs and qualified retirement plans since 2006. One of the most important and far reaching of these is the elimination of the opportunity to receive distributions from these accounts over the course of the beneficiary’s life. 

Many people might not have realized the updates this called for in their estate plan but there are critical steps that IRA owners and QRP participants should take when considering the potential impact of these changes on their estate plan. Primarily, IRA owners and QRP participants should first review all contingent and primary beneficiary designations for IRAs and QRPs. 

The second step of this is to review any trust that is named as a contingent or primary beneficiary, including trusts for a spouse, trusts for non-disabled adult children, trusts for minor children and any special needs trust for a mentally or physically impaired beneficiary. 

The review should be completed by an experienced estate planning attorney who is familiar with the impacts of the Secure Act and can help guide you through this process of figuring out what to do next. The support of an attorney is instrumental in adapting your estate plan to necessary changes.        

An IRA account manager can also help you when you need to update your beneficiary designations. Any time that you make changes to your overall estate strategy, that information should be shared with your IRA account manager, too, so that these forms can be update.  

Top Steps to Focus on Retirement

As your retirement begins to come into view, it’s time to ensure that your financial planning has been kicked into high gear and you make any necessary adjustments to ensure its smooth transition. It can come as an unfortunate and difficult surprise if you need to move into retirement sooner than you anticipate or if you or a loved one experiences a sudden incapacity or disability. 

Taking care of these steps now will greatly increase your chances of being able to move into retirement sooner rather than later with peace of mind. The first thing you need to do is increase the focus on your retirement goals. Take a look again at your retirement plan to see where you stand. If you’ve somehow gotten off track, now is the time to get back on it whether it is with contributing more to savings, tighter budgeting or both.

Catch up contributions can be powerful because you can contribute additional thousands of dollars to 401(k)s or IRAs depending on the specific rules. Furthermore, if your circumstances are changing, make sure that you adjust your asset allocation as your life goals alter. As your investment time frame and overall goals change, your asset allocation may change too.

Plenty of financial experts suggest that you reevaluate your allocation of assets whenever you experience a major milestone in your life, or on a periodic basis. Now is also a good time to develop your social security retirement date strategy. Although social security is likely to make up only a small portion of your retirement income, it is still a crucial part of your overall strategy and it must be given ample consideration as to when it is most to your benefit to take your retirement from Social Security.

There are many different financial considerations that go beyond thinking about your basic living expenses. Whether you are thinking about part-time work, downsizing, or for different ways to manage your health care costs, engaging the services of experienced professionals in the field is highly beneficial to you because it will help to clarify your goals and expectations.

New Study Shows That Retirement Could Enhance Charitable Giving

There has long been a perspective that people stop giving assets away to charity when they get older. But a study shows that this is simply not the case. Research completed by the Women’s Philanthropy Institute shows that charitable giving stays the same after retirement while other types of spending drops significantly. The study also identified differences in how single men, single women and married couples give to charity. 

Senior Couple Walking Along Coastal Path

Retired couples are often portrayed as not having the money or refusing to give. However, an Indiana University study found that this was not true, and this is good news for any non-profit that relies on donations received for financial support. Many of these retired couples could choose to give while they still are alive and are also including estate planning charitable options when putting together their documents for the distribution of assets.

The study looked at charitable giving among single men, single women and married couples starting in 2001. Overall, the report looked at data for more than 6,000 people who fit into their various categories, and individuals in these cohabitating, married or single households were between the ages of 55 and 101. The study found that the likelihood of giving to charity decreases by approximately 4% in the 5 years immediately after and before retirement. However, that was considerably less than the overall decline in general spending, which is approximately 16%. If you are contemplating including charitable giving in your overall estate planning, schedule a consultation with an experienced lawyer today.   

What You Need to Know About Part Time Work in Retirement

What do you have lined up for your retirement plan and the time you’ll have? You might want to stay working in a part-time capacity, but make sure you understand how that could influence your financial situation.

Most people find that having something to do in their retirement that gives them an additional purpose is extremely beneficial to their wellbeing and possibly even their physical health, but it’s important to realize how retirement part time work can affect your Medicare costs and social security taxes. 

Older workers who decide to file for social security prior to full retirement age must account for the impact of their wage income on their possible benefits. Benefits might be reduced temporarily up to 85% and those benefits could be taxed if their combined income exceeds a particular level. A higher level of income can also push you into a bigger tax bracket, putting you in an unfortunate situation and one that should at bare minimum be anticipated.

Planning ahead for retirement and for estate planning and elder law concerns should all be done together. Amassing a team of professionals who each have their individual knowledge in these areas can help you to work through some of the most common pitfalls experienced by people approaching and advancing into retirement. One of the leading concerns for the elderly today, for example, has to do with paying health care.

Being able to afford long term care insurance might be something that is outside your realm of possibility, but advanced Medicaid planning can ensure that you have put projects into motion that will allow you to tap into this federal government program if and when you need to due to a sudden health care event. Only an attorney should advise you about these complicated issues and you should retain a lawyer sooner rather than later to give yourself the best possible chance of guarding yourself well into the future.