Archive for October, 2013

Extending Your Retirement Savings

Tuesday, October 29th, 2013

In 1935, when the Social Security system was created, average life expectancy was 62 years. In 2013, it has increased to about 80 years. A longer life expectancy means people have a chance to enjoy their retirement years, but it is also something to keep in mind during financial planning for retirement. What if you outlive your money?

Social Security retirement benefits provide a small income for retirees, but most people want to be able to maintain a lifestyle similar to what they had when they were working, and that takes planning.Of course, one of the most important factors in successful retirement planning is to start saving early, and young people who take advantage of 401(k)s and other retirement accounts are doing their future selves a great favor. If, on the other hand, you are nearing retirement and realizing that you need to increase your savings, there are things you can do.

It is important to take advantage of Roth accounts and other retirement accounts as much as possible. Roth accounts are particularly helpful for retirement because of the tax break on withdrawals. High-income earners would be well-advised to make the maximum contributions and convert traditional accounts to Roth accounts during high earning years, when the income tax will be less of a burden.

Another useful strategy to consider is investing in tax-deferred annuities or life insurance policies such as whole life, which have a cash value component that grows tax-deferred. These investments also have death benefits that can help provide an income to survivors.

 

 

 

How Will Your Finances Be Impacted by Caring for an Aging Relative?

Friday, October 18th, 2013

When an older loved one needs care, family members often step in to provide some of the care themselves, partly to save money. However, it is important to be aware that providing care oneself has its own costs, both to the health of the caregiver and in economic terms.

Studies show that caregivers are more likely to report poor health themselves, at least in part because so much energy goes into caring for another. The financial effect can also be significant. Someone caring for an older family member often chooses to leave the workforce at least temporarily. There is an obvious short-term cost associated with the loss of wages, but the caregiver also may be shortchanging his or her own retirement, as less time working results in less money paid into the Social Security system, and Social Security retirement benefits can be a crucial part of a retirement plan.

A 2011 study showed that a female caregiver who takes leave from work to provide care for a family member loses, on average, more than $324,000 in lifetime wages and retirement benefits.

These are costs that need to be kept in mind whenever someone is considering leaving the workforce to care for a loved one, even temporarily. Although many jobs are protected by the Family and Medical Leave Act, the law only provides for unpaid leave, and only for 12 work-weeks per year. Many people have found that what was intended as a short-term, temporary leave turned into a long-term responsibility. The best course of action is to be realistic from the start about how much care is needed and the best way to provide it. Realistic planning can protect your own health and your financial well-being.

 

Please join us in celebrating, supporting and participating in the 5th anniversary of National Estate Planning Awareness Week, October 21-27, 2013. To learn more, visit The Financial Awareness Foundation. For more information about our estate planning services, visit www.littmankrooks.com. 

Estate Planning & Elder Law: What You Should Be Aware of If You Live in New York and Florida

Thursday, October 10th, 2013

Many New Yorkers retire in Florida, and many others choose to spend the winter months there while maintaining a residence in New York. As part-time New Yorkers and part-time Floridians, retirees have the best of both worlds. But living in two different states can present certain complications when it comes to estate planning and elder law.

One important consideration is where your legal residence will be, which can be important for purposes of estate taxes. Where you spend the most time may not be as important as where you are registered to vote, what state issued your driver’s license, and what address you list on tax documents.

Your will and any trusts should be tied to the state where you are a legal resident. However, if you own real estate in another state, you should have your estate planning attorney make sure that you do not need additional documents to transfer the property when you die or to manage it if you become incapacitated.

It is also important to make sure that documents such as a living will and health care power of attorney are valid in both states. If you happen to be traveling through another state and are hospitalized, out-of-state documents will probably not cause a problem. But if you spend a significant amount of time in another state, it is advisable to be sure that such documents comply with the laws of both states. If you spend a good deal of time in a state far away from close family members, then you may also want to consider naming a local family member or trusted friend in health documents, so that someone can get to a hospital quickly in the event of an emergency.

Littman Krooks is well-positioned to help you with these matters. Because so many of our clients live both in New York and Florida, we have partnered with Solkoff Legal, P.A. a leading Florida elder law firm, to offer superior estate planning and elder law services to residents of both states. Contact us for more information. Click here to read more about our alliance with Solkoff Legal.

 

For more information about our legal services, visit www.elderlawnewyork.com.

 

Estate Planners Find More Clients Are Raising Grandchildren

Monday, October 7th, 2013

Financial advisors and estate planning experts are reporting that they are seeing an increase in the number of grandparents who are helping to raise their grandchildren. For many, that added financial responsibility means that plans for retirement must be put on hold.

More than 2.6 million grandparents were raising grandchildren below the age of 18 as of 2011, according to the U.S. Census. Many households are disrupted due to underemployment, divorce, mental health or substance abuse issues or chronic illness. When adult children are not able to fully parent their own children, other family members often step in, and many times, custody of the children falls to the grandparents. That addition to the household means that more funds are needed for food and clothing; add in school supplies, sports and leisure activities and even basic entertainment, and a comfortable budget for two retirees can quickly be stretched to the breaking point, not to mention the emotional toll.

Merrill Lynch ran a survey of retirees in early 2013. Thirty-five percent of responding grandparents stated that they expect they will have to provide financial support for their grandchildren: 43 percent of those respondents stated that they will be providing financial support; 38 percent believe they will be paying for housing; 30 percent will be paying for education; and 25 percent are planning to pay for health care.

Even when grandparents are not shouldering the entire burden, many grandparents report that they are helping to “bridge the financial gap,” paying for some items or providing ongoing monthly funds to help make ends meet. And when some families are more financially secure than others, issues of resentment can build. That and the tax implications of gifts and estate tax is why so many estate planning attorneys strongly suggest that families look into setting up trusts with specific guidelines.

In addition to looking at financial estate plan issues, any grandparents who are parenting or co-parenting grandchildren should speak with an attorney to make sure guardianship issues are formalized. A guardianship that must be declared through the courts during an emergency is unpleasant for everyone involved.

 

For more information about our legal services, visit www.littmankrooks.com.

Milestones That Can Turn YOU Into A Caregiver (When Occasional Help Becomes Full-Time Assistance)

Tuesday, October 1st, 2013

In a third of all American homes, someone is providing care for a loved one. When a son or daughter is caring for an elderly parent, occasional help with some tasks can move rather quickly into regularly providing care for such essential daily activities as eating, bathing and dressing. The speed of the transition can sometimes be overwhelming for the person providing the care. It is important to recognize specific milestones that can mark the transition to full-time care, so that the caregiver is prepared and so that everyone involved can more easily recognize when help is needed.

Physical challenges are one such milestone. When a person is unable to walk without assistance, the need for full-time care quickly arises. Depending on the circumstances, it may not be safe for a particular caregiver to provide the lifting support necessary to help an older loved one in and out of chairs, automobiles and bed. Incontinence issues are another physical challenge that are often a tipping point for families to recognize that caregiving has become a full-time job and that help may be needed.

Behavioral and cognitive issues are another challenge that can quickly increase in significance. If an older loved one has symptoms of early Alzheimer’s disease or other dementia, the assistance he or she needs may be minor at first, but may progress quickly. If an elderly parent becomes prone to wandering or exhibits the aggressive behavior sometimes found in Alzheimer’s patients, this can be a turning point in the need for full-time care.

The needs of each individual and the way that each family provides care depend on individual circumstances, but it is important to recognize when the need for a little help has become the need for full-time care.

 

For more information about our legal services, visit www.elderlawnewyork.com.