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Running Out of Money in Retirement

retirement planning for seniorsRetirement is supposed to be the golden years. However, today the issue of how much money you need in retirement is becoming a much more complex issue. Although it is important to save for retirement, you shouldn’t scrimp and deprive yourself for a retirement that may never happen. The big problem is running out of money while you are retired.

How Much Do I Need?

To start with, you must take into consideration what your financial assets are. Then you must develop a plan that is practical with regard to an individual or family with your assets.

On the other side of the balance sheet you must look into what your income will be in retirement. Do you have annuities? Do you have a pension? Do you have a 401(k) you can draw from? Will your only income be from Social Security benefits and returns on retirement investments?

If your living expenses during the term of your retirement are greater than your income, the only way of making ends meet is to draw down the principal of your savings and investments.

What Type of Investments?

Investing for long term income is the approach you should take with regard to retirement planning. This means you should avoid speculative investments. I suggest that you invest approximately 60-70% of your assets in income producing investments and the balance in dividend paying blue chip stock.

You should not assume that your investments will produce a seven, eight, nine or ten percent return. You should use a very conservative number of either a four or five percent total return on investments.

The Length of Your Retirement

Traditionally, Americans had been retiring between ages sixty and sixty-five. However, with greater life expectancy and smaller amounts of savings, many Americans are considering retiring at much older ages. If you retire at sixty-five you must take into consideration that you have enough assets to last you twenty-five or thirty years. However, if you retire at an older age, the term of your retirement will be shorter and the length of the payout in your investments will be shorter.

Investment Scams

There are tricksters and scam artists who prey on senior citizens. Be careful with regard to investment advisors who promise high investment returns. If you are not sophisticated with regard to investments, you should find a well thought of investment advisor to help you. You should counterbalance the suggestions from your investment advisor with a certified public accountant.

Investing for retirement can be difficult. Hopefully you will be successful in accumulating enough money and investing it properly to actually have those golden years in retirement.

assistance in elder care planningElliot S. Schlissel is a member of the National Academy of Elder Law Attorneys. He assists his clients in all types of elder care issues related to medicaid planning, drafting wills and assisting the clients and their family members regarding probating of wills.

President Obama Orders the Creation of New Retirement Accounts

elder law attorneyOn Wednesday, January 29, 2014, President Obama gave his State of the Union address. During the course of his address, he ordered that a new type of employer sponsored saving account be created for the purpose of helping people save for retirement. The President suggested creating this new class of retirement saving account would help middle class Americans bridge the growing income equality gap.

Starter Retirement Savings Program

The new saving program created by President Obama is called the “MyRA”. The name mimics the Individual Retirement Account (IRAs) that first came into existence to help Americans save for retirement in the 1970s. These new accounts operate similar to the Roth Individual Retirement Accounts (Roth IRAs). Married couples with adjusted gross incomes of up to $191,000 and individuals with incomes up to $129,000 will be able to put away $15,000 in after tax dollars for a maximum of 30 years.

Currently the Roth IRAs will allow working individuals to save up to $5,500 per year, or if they are over 50 in 2014 $6,500 per year. Contributions can be withdrawn tax free.

The MyRA funds are subject to being withdrawn at any time without paying an income tax penalty. However, if the money is removed from the MyRA said funds will be subject to the same restrictions that currently exist for Roth IRAs.

Investment Options for the MyRA

There will only be one investment option for the MyRA. The United States Treasury is going to create a security fund modeled after the Federal Employees Thrift Savings Plan Government Securities Fund. This fund will have a variable rate of interest return on the funds deposited in it. This will prevent any individuals making deposits in the MyRA avoid losing any money maintained in this retirement plan.

The purpose of the MyRA is to allow lower income Americans to accumulate up to $15,000 towards retirement. Although this is not a significant amount of retirement assets, it is a start in the right direction.

estate planning assistanceElliot S. Schlissel is a member of the National Academy of Elder Law Attorneys. He drafts wills and trusts and handles estate and probate matters for clients.

Foreclosure Action Stopped by Death

Nettie Francis had executed a mortgage. The holder of the mortgage brought a foreclosure lawsuit against her. In May of 2010, the court had declined to sign a proposed judgement of foreclosure and sale. The court took this action because there had not been a submission of an order showing the mandatory residential foreclosure court conference had been held in the case.

Husband Seeks to be Named Administrator of Wife’s Estate

In July 2010, Nettie died. Nettie’s husband brought an action to intervene in the case. In this proceeding he submitted, to the court, a death certificate proving Nettie died in July 2010. His paperwork also showed since her death he had been taking care of the home. He indicated in his motion he was in the process of bringing an application in the Surrogate’s Court to be appointed the administrator of Nettie’s estate. He brought this action as an intervenor to be named a defendant in the foreclosure lawsuit.

Counsel for the financial institution argued against Nettie’s husband being allowed to intervene in the lawsuit. He claimed this application didn’t set forth a claim or defense for which the intervention in the suit was sought. He also claimed the motion being made by the husband was not made in a timely basis.

Supreme Court Justice Robert McDonald sitting in Queens County held the death of a party divested the court of jurisdiction. Upon Nettie’s death the proceedings were automatically stayed. The proceedings could not proceed without the substitution of a personal representative or an executor for the deceased party.foreclosure advocate

Long Term Care

elder care attorneysApproximately ¾ of all Americans, at some time in their life, will need some form of long term care. This is pursuant to a study of the US Department of Health and Human Services. Seniors over 65 have approximately a 1 in 3 chance of at some point in time finding themselves in a nursing home. Approximately 20% of these seniors will spend up to 5 years in a nursing home.

Long Term Care Insurance

Medicare is not designed to cover long term care in a nursing home or a rehabilitation facility. Medicare provides up to 100 days of coverage in an institution solely for rehabilitation purposes. So, should you purchase long term care insurance? The answer to this question is yes! However long term care insurance should be purchased when you are in your 50’s. If you want to purchase long term care insurance when you are in your 60’s or 70’s you may find it is much too expensive. It also should be pointed out insurance companies underwrite long term care insurance policies. Should they find you have a medical condition or illness which makes you a more likely candidate to end up in a nursing home, they will not sell you a long term care insurance policy or they will charge you a higher premium for the policy.

Medicare And Medicaid

As indicated earlier in this article, Medicare is not designed to cover long term care in a nursing home. It may help cover rehabilitation in the short run but it is not designed for long term care. Medicaid is a program for poor people. There are very strict requirements to be eligible for Medicaid. There is also a five year look back with regard to the transfer or moving of assets that is investigated prior to obtaining eligibility to participate in Medicaid.

Veteran’s Benefits

Veterans may have an opportunity to obtain benefits from Veterans Administration for long term care. Long term care is expensive. The average nursing home in the metropolitan New York area charges between $10,000 and $12,000 per month for private pay patients. If you do not have long term care insurance, other avenues you may need to investigate to pay for long term care involve reverse mortgages, pension loans and the liquidating of your personal assets.

Growing Old in America

Today, Americans are living longer and longer. As Americans age, their mobility can sometimes be more difficult. Senior citizens living alone sometimes have difficulty in maintaining their daily routines. Even if you have devoted loving family members, they may not be able to help you on a daily basis should you have need for a care giver. Your current home or apartment may also not be practical for you should you become sick, infirm, wheelchair bound or have failing eyesight. I wish we could all be forever young. However, growing old is part of life!

About The Author

elder law and planning assistanceElliot S. Schlissel, Esq. is an Elder Care attorney.

Spousal Refusal And Medicaid Planning

elder care attorney medicaidIn the States of Connecticut, Florida and New York spousal refusal to pay for a spouse’s medical expenses can be an acceptable Medicaid planning technique. The spouse of an individual who goes into a nursing home and applies for Medicaid is referred to as the “community spouse.” This spouse can keep approximately $3000 a month of the family’s combined income. In addition the community spouse can keep about $100,000 in assets which is referred to in Medicaid jargon as “resources.” Exempt assets such as car and the home the parties reside in are not included. The spouse that is going to go into the nursing facility is referred to as the “institutionalized spouse.”

$3000 A Month Is Not Enough

In a situation where the community spouse cannot live on the $3000 a month which is exempt from Medicaid, spousal refusal becomes an important option. The first step is the moving of assets from being held jointly to being solely in the name of the community spouse. An elder care attorney can prepare a document indicating the community spouse is refusing to contribute his or her income and assets to the care of the institutionalized spouse. The document provides reasons for the community spouse needing more than $3000 a month to live on. If the community spouse exercises spousal refusal and then meets other requirements to qualify for Medicaid benefits, the New York State benefit program must pay the expenses for the institutionalized spouse.

Department of Social Services Suing Community Spouse

The Department of Social Services can institute a law suit against the community spouse to recover all of the expenses paid by Medicaid. The purpose of the law suit is to force the community spouse to reimburse the Department of Social Services. So why should a community spouse risk this law suit? There are good reasons for this. To start with there is no guarantee the Department of Social Services will be successful in the law suit. Even if the Department of Social Services is winning the law suit, these law suits are often settled for less than the entire amount which is due and owing. In the event the Department of Social Services is successful in the law suit, it may only obtain payment for the Medicaid reimbursement rate and not for the much higher private pay rate the institution would charge for taking care of the institutionalized spouse. The private pay rate is usually $3000 to $5000 a month higher than the reimbursement rate for Medicaid.

Elder Care Planning: The Best Route

The first option should be to purchase long term care insurance. If this is not a viable option, the next best way to deal with elder care related issues concerning Medicaid is to hire an elder care lawyer to prepare an irrevocable MAPT trust at least five years before any potential need for Medicaid benefits.

elder care planning and medicaid

Retirement Problems

estate planning lawyerDo you have enough money to retire? This is a question baby boomers are starting to think about. How much money do you need before you retire? What is the best way to plan for retirement?

When Should You Start Saving?

Experts agree that you should start saving for your retirement as early as possible. The longer you defer putting aside money in a 401(K), IRA or through a pension plan the less likely that you’ll have sufficient funds to last during the term of your retirement.

Medicare and Medical Expenses

Medicare will not be sufficient to cover your medical expenses during retirement. A study by Fidelity Investments found a 65 year old couple retiring in 2012 would need to spend $240,000 to cover their medical expenses during the time of their retirement. If you retire at 65, you will need to set aside a quarter million dollars just for medical expenses!

Maintaining Your Standard of Living In Retirement

Baby boomers facing retirement often receive mailings from retirement communities showing retirees living the good life. The question is, how much does the good life cost? Will it be cheaper to live the good life in your senior years than you’re living expenses were when you were working? Studies show you will need approximately 75 to 80% of the income you had a while you were working to maintain your lifestyle in retirement. When you are retired you will have more time available to go on vacations and you may find that the good life is not inexpensive.

Should You Wait To Retire?

Now that Americans are living longer, should they consider 65 a reasonable retirement age or should they wait until their 70 or older to retire? Many Americans working for large corporations are deprived of the choice of working through their sixties into their seventies. Large corporations tend to push older employees out by offering them incentives and other packages. Should you lose your job when you are 55 or 60 years of age, you will find many employers are reluctant to hire older Americans.

Conclusion

Be careful when you retire. You don’t want to outlive your money!

About the Author

prepares and litigates wills and trustsElliot S. Schlissel is a member of the National Academy of Elder Law Attorneys. He assists seniors with regard to wills, litigation, Medicaid issues and estate litigation.

Decedent Considered Married Despite Not Having A Marriage License

marriage and divorce attorneyThe Surrogate Judge of Kings County, Diana Johnson, recently held a hearing related to the probate of a decedent’s estate. She was presented with the issue of whether the decedent and the objectant, Avrumson, were legally married. The marriage took place before Rabbi Dembitzer at the Rabbi’s residence. However, there was no marriage license. The court held thelack of a license did not render a marriage, which was performed by an individual authorized to solemnize marriages, void.

A marriage certificate was entered into evidence. No evidence was presented that the signatures on the marriage certificate were forged. The court found there is a presumption of the validity of the marriage.

Rabbi Dembitzer testified he recognized the handwriting on the Ketubah, a Jewish marriage document. He also testified he would not perform a wedding if there was no Ketubah. He testified a Ketubah is required pursuant to Jewish law and would not participate in a marriage ceremony without one. The court found the decedent and the objectant were legally married and the objectant had the status of being the surviving spouse for inheritance purposes.

estates and probate attorney

Estate Planning Documents

estate planning lawyerWill

The purpose of a will is to set down the manner and disposition of an individual’s assets and his or her estate, at the time of his or her death. A will has no effect during a person’s lifetime. It only deals with the disposition of the person’s assets at the time of death. The will should be crafted by an experienced estate planning lawyer. It needs to be executed in accordance with specific formalities as prescribed by law. These formalities vary from state to state.

Living Will

A living will is a document that deals with life prolonging issues. In a living will, an individual specifies which life prolonging measures and medical procedures he or she wants utilized in the event of his or her incapacity. The living will also needs to be executed with specific execution formalities. This document should only be drafted by an attorney experienced with elder law end of life issues.

Revocable Living Trust

A revocable living trust is a testamentary document similar to a will. However, a revocable living trust is sometimes prepared as a substitute for a will. Revocable Living Trusts avoid probate. It is recommended, when the individual drafts a Revocable Living Trust that they also draft a pour over will to go with it. A pour over will is designed to distribute assets which are left out of the Revocable Living Trust.

Power of Attorney

A Power of Attorney is drafted by an individual who is referred to as the principal. The principal appoints someone who deals with financial issues such as paying bills, if he or she becomes incapable of dealing with these financial issues. The Power of Attorney can be drafted in a manner which allows it to stay in effect even in the event the principal becomes incompetent. Powers of Attorney are specifically designed to deal with financial matters and not with medical or health care issues.prepares and litigates wills and trusts

The Right To Die

long island attorneyThere was a recent case in Long Island, New York concerning issues surrounding “the right to die.” Sungeon Grace Lee, age 28, decided her life was no longer worth living. She advised her doctors she wanted to end her life by cutting off the life support system keeping her alive. Her parents, who are deeply religious, vehemently opposed their daughter’s wishes

Tumor On Her Brain

Ms. Lee had a tumor on her brain stem. She had been suffering from seizures. During one of her seizures she was rushed to North Shore University Hospital in Manhasset, New York. The seizure left her paralyzed from the neck down. At that time, she was hooked up to a life support machine that allowed her to breathe.

Parent’s Sue To Keep Daughter Alive

Ms. Lee’s mother, Jin Ah Lee, and her father, Man Oh Lee, a Pastor of the Antioch Missionary church in Flushing, Queens, were both deeply religious people. They retained an attorney and obtained a restraining order preventing their daughter from ending her life. After protracted litigation, both the trial court and appellate court set aside the petition of Sungeon Lee’s parents. In their decision, the courts indicated that the daughter was competent to make her own medical decisions. However, in the end, Ms. Lee agreed to withdraw her request to be allowed to die and complied with her parents’ wishes.

Ms. Lee has been moved from North Shore University Hospital to her parents’ home where she is competently taken care of.

About The Author

elder care helpElliot S. Schlissel, Esq. is an Elder Law Attorney with more than 35 years of legal experience. He represents individuals concerning Medicaid planning, wills, trusts and estate matters, end of life issues and estate planning matters.

Amending Irrevocable Trusts

estate planning attorneysIrrevocable trusts are an invaluable estate planning resource. However, due to tax changes (fiscal cliff) and other issues, irrevocable trusts with an estate plan in mind, need to be changed related to subsequent modifications of estate tax laws. Can irrevocable trusts be amended? The answer to that is yes, in certain circumstances.

New York Estates, Powers and Trusts Law, section 7-1.9, provides a means to modify, change or amend an irrevocable trust. This section of law allows the settlor, the individual who made the trust, upon written consent of all trust beneficiaries, to amend or revoke the trust in whole or in part. In the event that one beneficiary refuses to agree to the modification or is unable to consent to the modification, this section of the estate law cannot be utilized to amend or modify the trust. Examples of situations, where trusts cannot be amended are when one of the beneficiaries is a minor, an incompetent or the settlor has died.

In the event the settlor becomes incapacitated but has previously executed a Power of Attorney, the individual with the Power of Attorney can provide consent on behalf of the settlor to the amendment or modification of the trust.

Decanting A Trust

Section 10-6.6 of the New York Estates, Powers and Trusts Law allows trusts to be decanted. Decanting involves the moving of trust assets from one irrevocable trust to another trust. The new trust can be modified even if a necessary person under EPTL section 7-1.9 was unable to get consent for an amendment under this section.

Conclusion

Should you have an irrevocable trust and wish to make changes, modifications or alterations, New York law allows various routes to accomplish these goals. You should consult with an experienced estate planning attorney if you or other family members face this issue.assistance in planning your estate

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