Financial Planning Category Archives

Delaying Social Security: Should You Do It?

Published on: August 30, 2013 | by Ettinger Law Firm

There is no such thing as universal financial advice. When reading any news story, blog post, or magazine article, one must remember that any advice or discussion about financial topics are general–they may not be best choice in your particular case. Many decisions about investments, use of trusts, and similar matters should only be undertaken after consultation with a professional upon explaining your exact situation.

But that is not to say that it isn’t important to learn about some of the general issues beforehand to better understand common financial planning themes. For example, what are the pros and cons of delaying the receipt of Social Security benefits?

A Q&A story from the Herald provides a helpful summary of the issue. A questioner just turned 62 years old. He was wondering if he should start taking Social Security now ($1,800 a month), wait until he is 66 years old ($2,4000 month), or wait even longer.

How Does New York Stack Up for Retiree Taxes?

Published on: August 26, 2013 | by Ettinger Law Firm

Do you have enough money to retire? It is a questions that tens of thousands of New Yorkers ask themselves every day. When talking with attorneys and financial advisers, many factors are weighed to determine whether enough resources are available for one to have the type and length of retirement that they want and need.

One of those factors, as always, is taxes. Retirement income is frequently taxed, with a portion of money going to state and local government. These are not necessarily trivial amounts, as the exact size of the tax burden may affect whether or not the nest egg is large enough to cash in one’s chips and begin the next phase of life.

Federal taxes will obviously be the same everywhere, but the rules about retirement taxes vary considerably from state to state. When making long-term plans regarding finances, it is critical to understand how state tax rules will affect your retirement

Is There a New Way to Test for Dementia?

Published on: August 22, 2013 | by Ettinger Law Firm

It is a nightmare for many families. A senior shows signs of cognitive mental challenges–becomes forgetful and eventually is unable to live on their own. An adult child take control of the senior’s affairs in order to pay for bills and arrange for long-term care. But when the family member checks banks accounts they discover that the senior’s nest egg has been demolished. Tens of thousands of dollars have been funnelled out to strangers. The senior was the victim of financial exploitation, and now there is little money to pay for the long-term care that they need.

Believe it or not, this scenario occurs frequently. Dementia and Alzheimer’s are not rare diseases; they strike large portions of the population. Yet, because the signs build up only slowly, many family members do not realize the scope of their parent’s mental decline until far too late–after they hurt themselves in an accident or are financially decimated in a scam.

Because of the risks, elder law attorneys frequently remind residents to be proactive–checking up on loved ones frequently and putting legal documents in place to identify problems early on.

DOMA Ruling & Retirement for Same Sex Couples

Published on: August 21, 2013 | by Ettinger Law Firm

Much discussion around the Windsor case that struck down DOMA dealt with the estate tax. As a result of the decision, married same sex will indeed be privy to the same federal estate tax exemptions as their heterosexual counterparts. But the effects will go well beyond taxes at death. In fact, it is important for same sex couples to remember that federal recognition of their marriage will also affect retirement planning.

The sweeping ruling granting federal equality will likely mean that many same sex couples will need to “re-do” planning that they previously undertook to account for their unequal status under the law.

Retirement Planning

Taxes & Withdrawal From Retirement Accounts

Published on: August 7, 2013 | by Ettinger Law Firm

Planning for retirement is rarely a simple task. For one thing, a resident must carefully ask the basic question: How much do I need? Sophisticated models and projections exists to help make educated guesses about this answer. But it is never an exact science. That is because it is impossible to say with certainty how long the retirement will last or what the future financial world will look like.

On top of that, however, there is also significant complexity regarding the accounts, trusts, and other tools used to provide the assets and income needed in retirement. It is critical to understand tax issues with retirement accounts and investments to appreciate exactly how much money will be available for you to live in your golden years.

Take, for example, the issue of taxes and individual retirement accounts (or any other tax-deferred plan). Do you know how much of the account will be taxed on withdrawal?

Are “Stretch IRAs” Going to be Phased Out?

Published on: July 17, 2013 | by Ettinger Law Firm

Structuring an estate plan to account for taxes can be a complex task. While state and federal estate taxes make up the majority of discussion about taxation, there are other issues to consider. For example, there are ways to structure disbursement of various assets–insurance policies, retirement accounts, and more–so that Uncle Sam takes as small a bite as possible.

Adding to the complexity is the fact that laws frequently change which either open up more opportunities or take away previously available tax-saving options. For example, last week Forbes discussed a U.S. Senate vote that may eliminate a commonly-used tax strategy.

Stretch IRAs

“Financial Caregiving” for Ailing Senior Parents

Published on: June 14, 2013 | by Ettinger Law Firm

One overlooked aspect of elder caregiving is the difficulty of the transition time itself. While some seniors may suffer serious medical events (stroke, heart attack, etc.) which require adult children to manage affairs overnight, in many cases the need for support happens only gradually. This presents a challenge as children must delicately broach the topic with parents who may be uninterested in change. At the same time, sibling rivalry, hurt feelings, misunderstood intentions, lack of information about savings, and many other details are thrown into the mix.

Put another way, before even deciding the best way to provide “financial caregiving” for an elderly parent, one must first figure out when to begin and how to get the parent to concede that help is needed.

A CNBC article last week examined this sensitive subject. The article provides reasonable advice while noting that “the shift [to financial caregiving by adult children] can be less stressful if everyone takes it slow, seeks advice and remembers that helping to maintain a loved one’s well-being is the primary goal.

New Study: Marriage Boosts Retirement Security

Published on: April 22, 2013 | by Ettinger Law Firm

Do I have enough to retire? Countless New Yorkers ask their financial advisers, estate planning attorneys, and other professionals that very question each and every day. There is no one-size-fits-all response, as retirement is a personal matter based on individual expectations, goals, and perspective.

Mountains of pages have been written about how much money you should have before retiring and what you should do with it. Perspectives abound.

Interestingly, there is less disagreement about general characteristics that make one more or less likely to be financially secure enough to retire. For example, the Wall Street Journal pointed to a new study last week which found that married couples are far better positioned to make the leap and officially enter retirement.

Becoming a “Paradigm” of Financial Health

Published on: March 21, 2013 | by Ettinger Law Firm

Money is always at the top (or near it) of lists describing issues that most commonly bring stress into our lives. It’s cliche to say that “money is the root of all evil,” but its obvious that dealing with financial issues is a common concern for families of all shapes, sizes, and even income levels. There is so much different advice out there about what you should be doing or could be doing as it relates to money matters that it is hard to distinguish between the useful and the fluff.

One such story posted in Yahoo Finance this week offers a somewhat helpful distillation of seven basic concepts that can be used for those of all income levels and at different life stages. They are referred to as “paradigms” of financial health. The entire list is worth browsing, but a few of the items on the list include:

***If you are a couple with two incomes, you can pay for “essentials” with only one spouse’s income. Those essentials are things like the mortgage, insurance, child care , and similar items that cannot be cut easily. Essentially this is one way to check whether you may be living above your means. It is an easy shortcut to figure out if you can survive in the event of a lost job or other emergency.

Editorial Calls for Preserving Medicaid Spousal Refusal in New York

Published on: March 12, 2013 | by Ettinger Law Firm

It is not easy for many local residents to understand all of the ins and out of the Medicaid program. While Medicaid is a critical tool that provides support for local seniors who need long-term care, it can be a whirlwind of stress, anxiety, and frustration when families attempt to navigate the administrative waters and understand what they need to do to join. Making matters worse is that fact that Medicaid qualification is based on income, and so most families are forced to “spend down” assets before receiving aid. Without proper planning, this means that many families are forced to shed most of their assets just to receive the extra care they need–loosing property and savings built up over a lifetime.

This situation seems particularly damaging for certain families, including those with one healthy spouse and the other in need of care. Fortunately, in those situations the option of “spousal refusal” exists. This essentially allows a healthy spouse to divest property from the other, such that the sick spouse qualifies for care without the healthier spouse losing most everything as well.

Eliminating the Refusal?