When you pass away, your debts, including your mortgage, do not simply vanish. If your will or trust leaves your property, which still has a loan against it, to a beneficiary, they will inherit both the real estate and the remaining debt. The beneficiary might have the option to assume the mortgage, allowing them to retain ownership of the house, or they could opt to sell the property and use the proceeds to settle the debt. The specific outcomes depend on the terms of the mortgage and the directives laid out in the estate plan. Planning ahead for the transfer of your real estate assets can significantly simplify the process for your heirs, making it a smoother transition during a challenging time.

American Housing Debt: A Growing Concern

In recent years, American housing debt has soared to unprecedented levels. According to the US Census Bureau, the homeownership rate was approximately 66 percent in 2022. By the end of September 2023, the Federal Reserve Bank of New York reported that Americans were carrying $12.14 trillion in mortgage balances. This figure represents a significant portion of US consumer debt, emphasizing the crucial role of real estate in personal finance. The increase in mortgage debt highlights the importance of addressing how these obligations are managed after the homeowner's death.

The Prevalence of Unpaid Mortgages

With housing debt constituting a substantial part of consumer debt, it's not surprising that many Americans pass away while still owing on their mortgages. A survey by CreditCards.com revealed that 37 percent of Americans died with unpaid mortgages. This situation poses potential complications for heirs and underscores the need for comprehensive estate planning.

Inheritance Trends and Real Estate

The inclination to leave a home to one's children is strong among American parents, with a 2023 Charles Schwab survey indicating that more than three-quarters of parents intend to do so. However, the reality of inheriting a home is complex, especially given the current real estate market dynamics. Nearly 70 percent of potential heirs express a preference to sell the inherited property, often due to financial considerations or the rising costs of real estate.


Managing Mortgages in Estate Planning

When it comes to estate planning, one of the critical concerns is how to handle mortgages on inherited properties. The process varies significantly depending on the decedent's estate plan, the terms of the mortgage, and state laws.

Scenario 1: Single Beneficiary Inheritance

When a property is left to a single beneficiary, whether through a will, trust, or deed, several outcomes are possible. The beneficiary might assume the existing mortgage, pay off the mortgage with other funds, or sell the property and use the proceeds to settle the debt. Some lenders may also allow for the refinancing of the loan under the new owner's name, potentially offering more favorable terms.

Scenario 2: Multiple Beneficiaries

In cases where multiple beneficiaries inherit a property, the situation becomes more complex. These beneficiaries must agree on how to manage the inherited mortgage, whether by assuming it jointly, selling the property, or using other funds to pay off the debt. Disagreements can lead to legal challenges, potentially resulting in a court-ordered sale of the property.

Scenario 3: Inheritance through Probate

For those who die without a will or trust, the probate process determines the distribution of their assets, including real estate. The executor of the estate is responsible for managing the deceased's debts and assets, which may involve using estate funds to maintain mortgage payments until the property can be sold or transferred.

The Importance of Planning

Estate planning goes beyond merely distributing assets; it's about ensuring that your legacy is passed on according to your wishes without imposing undue burdens on your loved ones. For homeowners, this means considering the implications of mortgage debt and making arrangements to ease the financial strain on heirs.

Crafting a Thoughtful Estate Plan

An effective estate plan addresses all aspects of your assets, including your home and any outstanding mortgage. It might include setting aside funds to cover mortgage payments, instructions for the sale of the property, or provisions for refinancing the mortgage to benefit your heirs.

Consulting with Professionals

Given the complexities of estate law and the intricacies of mortgages, seeking advice from an estate planning attorney is advisable. They can provide tailored guidance that aligns with your goals and ensures your estate is handled smoothly.

As American housing debt continues to climb, the importance of incorporating real estate into your estate planning cannot be overstated. Understanding how your mortgage debt will be managed after your passing is crucial to ensuring your heirs can navigate their inheritance without undue stress. Through careful planning and professional advice, you can secure your legacy and provide for your loved ones even after you're gone.


Every child is a precious gift, and as parents or grandparents, we strive to plan for their future, anticipating their needs and aspirations. However, families with special needs children or grandchildren face additional responsibilities in ensuring their loved one's future is secure, fulfilling, and supported. To ensure a flourishing future for your special needs child or grandchild, estate planning measures focused on their unique circumstances are essential. We recommend the following steps:


Have a Special/Supplemental Needs Trust Prepared

When it comes to estate planning, creating a Special or Supplemental Needs Trust (SNT) for your special needs child or grandchild should be a top priority. An SNT is a specialized trust designed to set aside funds and assets for the benefit of a beneficiary who may qualify for public assistance due to their disabilities. It can be established as a standalone trust or added to your existing trust.

It's important to note that government programs providing aid to disabled individuals have strict criteria regarding the amount of money and property a person can own while receiving benefits. Structuring any inheritance your special needs beneficiary may receive in a way that doesn't disqualify them from obtaining government benefits is crucial. Even if they are not currently receiving government benefits, considering the possibility of future needs is essential. To ensure all opportunities are available, it is vital that the trust is meticulously drafted by a lawyer well-versed in the eligibility requirements for government benefits.

An SNT not only provides financial security but also allows you to appoint a care manager or advisory committee. The care manager serves as an advocate for your special needs beneficiary, overseeing their well-being periodically or daily, depending on their level of care requirements. An advisory committee, comprising family members, friends, and professionals, can provide guidance to the trustee on the beneficiary's needs and the best use of the funds.

Additionally, the SNT can include a statement of intent, outlining the trust's purpose and how the funds should be utilized. This section acts as a safety net in case changes in the law make the beneficiary ineligible for government benefits. It allows for modifications to ensure your original intentions are met, even in the face of unforeseen circumstances.


Write Down Your Instructions

In addition to establishing an SNT, putting your instructions in writing is crucial to ensure your wishes are carried out as intended. Consider creating a letter or memorandum of intent that provides guidance to your trustee on managing the trust after your passing. Although not legally binding, this document offers valuable insights into your true intentions. You can include details on how the funds should be used in accordance with government rules, specific goals you would like the beneficiary to achieve, and the standard of living you envision for them.


Explore Life Insurance as a Funding Option

Supporting a special needs child or grandchild can be financially demanding, and it's important to consider how to sustain their care once you pass away. Life insurance can be a valuable tool in ensuring there will be sufficient funds for the trustee to use for their benefit. By designating the SNT as the beneficiary, you can provide a lump sum payment that is not subject to the same tax liabilities as retirement accounts.


Assess Your Retirement Account Distribution Options

The SECURE Act has brought changes to how beneficiaries can receive distributions from inherited IRAs, potentially impacting the financial support available to your special needs beneficiary. However, the Act also recognizes "eligible designated beneficiaries," including individuals with disabilities, who can still receive distributions over their life expectancies. Congress has established rules that allow the life expectancy of disabled beneficiaries to be used for certain types of trusts. If you have a substantial retirement account, it is crucial to discuss your distribution options to maximize benefits for all your beneficiaries.


Contact Us for Assistance!

We understand that securing a bright future for your special needs child or grandchild is of utmost importance to you. Our priority is to work with you in developing a comprehensive plan that will guarantee continued care and well-being for your loved ones. Please do not hesitate to reach out to us to schedule an appointment so that we can begin this process together.

This is the first week of May, which means that it is also Teacher Appreciation Week and we want to celebrate teachers everywhere and express our gratitude. Your commitment to laying the groundwork for tomorrow's leaders is truly inspiring. We believe that everyone deserves a successful future, including you. We want to ensure that you have all of the essential estate planning documents to secure that future. To get that preparation started, we have some frequently asked questions listed about estate planning and how important it is to have a plan in place.


a teacher doing some inheritance planning

What Does the Term 'Estate' Mean?

Having a proper legal plan is important for everyone, regardless of wealth. The term 'estate' refers to all of your possessions, such as bank accounts, real estate, household items, and vehicles. Essentially, it encompasses everything that you own. Once you pass away, everything in your estate is bequeathed to someone else.


What Does Estate Planning Entail?

Estate planning or asset protection planning, involves creating a comprehensive set of instructions for your trusted decision-makers to follow. These instructions are laid out in a series of legal documents that specify what should happen to your assets, finances, and other possessions after you pass away. In addition to distributing your estate, these documents can allow you to nominate a guardian for your minor children, and provide guidance for situations where you are unable to make your own decisions or require end-of-life care. A large number of people choose to work with an estate attorney, like us, to help them with this inheritance planning process.


Do I Really Need to Plan for Retirement?

Planning for retirement is essential to ensure that you are financially prepared for your post-work years. Your retirement plan options will vary depending on the school district you're in, so you may need to conduct a little research to see the basic features of your plan. Defined-benefit plans guarantee a specific payment amount, while defined contribution plans are based on investment results. To understand your plan's rules and requirements, consider the following questions:

The type of account your retirement plan is in decides the regulations that go with it. Understanding the terms and conditions for your specific plan is vital.


What Documents Make Up an Estate Plan?

To create an effective estate plan, you must identify the documents that make up your plan. Having a will or trust already completed means that you are off to a good start. If you haven't started preparing any of the necessary documents yet though, there is no need to panic as we are here to help you create your comprehensive plan for any situation. As a teacher, you know the importance of having a well-organized plan, and we view your inheritance planning documents as the lesson plans that guide and protect your loved ones.

Revocable Living Trust

One part of asset protection planning can be developing a revocable living trust (RLT), which is a trust that you establish during your lifetime, which can be altered at any time until you become incapacitated or pass away. You can either transfer ownership of your accounts and property from yourself as an individual to yourself as the trustee of the trust or name the trust as the beneficiary of your accounts and property (with some exceptions). Although many may believe it, there is no requirement as to how much money and property you need to experience the benefits of a trust. The next step may involve figuring out how to choose a trustee as an RLT allows you to designate a co-trustee or substitute trustee if you become unable to act as trustee for any reason. An RLT also enables you to enjoy your money and property during your lifetime and to designate what will happen to it upon your death, safeguarding it for your chosen beneficiaries.

An RLT is an excellent way to provide instructions to your loved ones about how to handle the money and property owned by the trust. You can specify in the trust document how the money and property should be used during your incapacity and after your death. As an educator, an RLT offers an opportunity to provide younger beneficiaries with teachable moments. You can structure the trust to allocate a specified percentage to your loved one upon reaching a particular age (e.g., one-third at age thirty, one-half at age forty, and the remainder at age fifty). Alternatively, you can use an incentive trust to allow the trustee to give your loved one money only after achieving specific objectives (e.g., successfully completing a post-secondary education, being employed by the same employer for more than a year, being sober for one year, etc.). You can also use your trust to encourage charitable giving by allowing your loved one to select a charity to give a stated amount of money to, providing funding for a mission trip, etc.

Last Will and Testament

Another option for asset protection planning is a Last Will and Testament, which is another option for individuals to carry out their wishes. This document is also referred to as a will. In it, you can name an executor or personal representative who will collect all of your accounts and property, pay off your outstanding debts, and distribute your assets to those you have named. You can also name a guardian for any minor children. Unlike an RLT, this document is only effective after your death and cannot be used during your incapacity. However, it does provide a way to officially express your wishes.

If you choose to distribute your assets through a will, your family will have to go through the probate process, a court-supervised procedure that must be followed to distribute your accounts and property to your beneficiaries after your death. In contrast, with an RLT, probate can be avoided. It's important to note that if you don't have a will, state law will determine who gets your assets.

Pour-Over Will

In the event that you have created an RLT as part of your estate plan, you may also need to create a pour-over will. This document is necessary only if an account or property has not been transferred to your trust during your lifetime or to your trust or another beneficiary upon your death through a beneficiary designation. Similar to a last will and testament, a pour-over will designates a personal representative or executor (usually the same person named as your substitute trustee) and a guardian for any minor children. However, the main difference is that a pour-over will directs that all accounts or property that are subject to probate be transferred to your RLT. While your loved ones will still need to go through probate, your money and property will ultimately end up in the trust and be managed and distributed according to its instructions.

Financial Power of Attorney

A financial power of attorney allows you to designate a trusted person, referred to as your agent, to manage your financial transactions such as signing checks, opening bank accounts, signing a deed, and other tasks that you may assign. It's similar to assigning tasks to a teacher's aide in a classroom. You can tailor the powers granted to the agent and when they can act on your behalf to meet your specific needs. Failing to name an agent can result in your loved ones having to wait for a court-appointed decision-maker with no input from you.

Medical Power of Attorney

A medical power of attorney enables you to designate a trusted person to act as your healthcare decision-maker and make medical decisions or communicate your healthcare preferences on your behalf if you become unable to do so, like a stand-in teacher for your healthcare. Without a formal designation, your loved ones would have to seek court appointment for someone to make medical decisions for you, which may not align with your wishes, and the process can be costly, time-consuming, and public, adding to the stress during a challenging time.

Advance Directive or Living Will

An advance directive, also known as a living will, is a teaching guide that communicates your specific wishes regarding end-of-life decisions. It is crucial to thoughtfully consider your desires regarding life-prolonging procedures and clearly convey them to your chosen medical decision-maker. Without these instructions, your medical decision-maker will have to make assumptions about your wishes, which can lead to stress and potential disagreements among your loved ones if their opinions differ.

Health Insurance Portability and Accountability Act Authorization Form

A Health Insurance Portability and Accountability Act (HIPAA) authorization form allows you to authorize specific individuals to receive information about your medical condition, such as updates on your status or test results. This authorization does not grant decision-making authority to the named individuals; that power belongs to the medical decision-maker you have chosen in your medical power of attorney or the court-appointed individual if you have no valid medical power of attorney. Sharing information with your loved ones can ease anxieties and uncertainties that arise during emergencies. The HIPAA authorization can also help reduce tensions between the medical decision-maker and your loved ones and enable them to understand the reasons behind the decisions made.


Next Assignment

Your next task is to contact us so that we can work with you to create a personalized estate plan that will safeguard you and your loved ones. Trusting an estate attorney to help you make the right plan is a great step in the right direction. Preparing a plan will put you at ease knowing your wishes will be honored, all of your assets will be distributed how you'd like, and all of the people you care about are accounted for if you happen to become incapacitated or pass on. Let's work together to create a comprehensive lesson plan for your inheritance planning needs.

Anderson, Dorn & Rader can assist you.

There are various ways for settling issues involving trusts and estates. One of the most popular
alternatives to litigation is a nonjudicial settlement agreement (NJSA). NJSAs are not always the best
line of action, but they can be a good alternative to litigation.

Nonjudicial Settlement Agreements discussion

The Good

The ability to avoid the time, expense, and stress of litigation is one of the main advantages of NJSAs.
NJSAs can be finished very quickly, allowing the parties to go on with their lives, in contrast to litigation,
which can take months or even years to resolve.
Another advantage of NJSAs is that they are flexible. The parties can tailor the agreement to meet their
specific needs and concerns. This means that NJSAs can often result in more creative solutions than
would be possible in court. Additionally, NJSAs are private. Unlike court proceedings, which are generally
open to the public, NJSAs are confidential. This means that the parties can keep the details of their
settlement agreement private and avoid negative publicity.

The Bad

While NJSAs have many benefits, they are not without their drawbacks. One of the main disadvantages
of NJSAs is that they are not binding on non-parties.The parties might believe they have resolved all of
their issues as a consequence, only to find themselves back in court later. Another potential downside of
NJSAs is that they may not be enforceable. This could be especially challenging if one of the parties has
already received their share of the trust assets and won't return them.

The Ugly

Finally, NJSAs can have some ugly consequences if they are not carefully crafted. One of the most
significant risks of NJSAs is that they can result in unintended tax consequences. For instance, the
distribution may be subject to additional taxes and penalties if the parties concur to transfer trust assets
in a manner that isn't consistent with the trust's provisions or the applicable tax rules.
Another potential problem with NJSAs is that they may not be comprehensive. The parties can end up
back in court later if they don't resolve all the problems that may need to be settled. This can be
especially problematic if the NJSA was intended to be a final resolution of all disputes.
There is a chance that NJSAs won't hold up in court if one party later decides to contest the agreement
since they aren't examined or approved by a judge. Furthermore, NJSAs might not be acceptable when
there is a considerable power disparity between the parties because that could allow one of them to put
excessive pressure or influence on the other.

Despite these limitations, NJSAs can be an effective tool for resolving disputes and distributing assets in
certain situations. For instance, NJSAs may be helpful when the parties already have a relationship and
want to keep it even in the face of a disagreement (for instance, when they are family members or
business partners).

Nonjudicial settlement agreements can be a valuable tool for resolving disputes over trusts and estates.
They offer several benefits, including flexibility, speed, and privacy. NJSAs can be non-binding,
unenforceable, and may result in unintended tax consequences or incomplete resolutions. Therefore, it is
essential to get legal counsel from a licensed expert before signing a NJSA to make sure your rights are
protected and the agreement is valid and enforceable.


Anderson, Dorn & Rader can assist you.

Looking to resolve disputes over trusts and estates without the time, expense, and stress of litigation? Nonjudicial settlement agreements (NJSAs) offer several benefits, including flexibility, speed, and privacy. However, it's essential to understand the potential drawbacks, such as non-binding provisions, unenforceability, and unintended tax consequences. To ensure your rights are protected and the agreement is valid and enforceable, it's always a good idea to seek legal counsel from a licensed expert. Please contact the estate planning professionals at Anderson, Dorn & Rader.

Ladies, You Need a Plan

Back in 1987, Congress recognized March as Women's History Month to celebrate the incredible contributions of women in American history across various fields. From building a strong and prosperous nation to being the backbone of their families, women have been unstoppable. Yet, in the midst of caring for others, women often neglect their own financial and estate planning. It's high time for women to prioritize themselves by crafting a solid plan that caters to their future needs, which may differ from those of their male counterparts and dependents.

Financial planning by ADR, Women's history month by ADR

Planning Considerations for Women

Longer life expectancies. According to Social Security Administration data, in 2021, women had an average life expectancy of 79.5 years compared to 74.2 years for men. As a result, it is important for women to create an estate plan that accounts for additional years of living expenses during retirement, healthcare costs, and possibly long-term care costs. As women age, there may be a greater possibility that they could become incapacitated and need someone to act on their behalf to make financial and healthcare decisions. Documents such as financial and healthcare powers of attorney and living wills authorize a person they trust to make decisions or take action for them if they are not able to act for themselves. Some women may not only own their own assets but also inherit wealth from both their parents and a spouse who dies before them, and if so, they need a financial and estate plan to optimally preserve and transfer this wealth. Because women may outlive their spouses, they also may be responsible for administering their spouse’s estate or become the sole surviving trustee of a joint trust. These duties may be difficult for a woman who is experiencing health issues that often occur at an advanced age, and this possibility should be addressed in their estate planning. For example, a woman concerned that she will be unable to handle administering her trust at an advanced age can name a co-trustee or successor trustee to administer it if she is no longer able to do so.

Lower earnings. According to U.S. Census Bureau data, women continue to earn less than men, and the pay gap widens as they age. In addition, because some women have shorter employment histories due to time off to raise children or care for aging parents, they may have less saved for retirement. As a result, it is important for them to take steps to protect their money and property from lawsuits or creditors’ claims. For example, a woman could transfer her money and property to an irrevocable trust. Because she is no longer the legal owner of the property, a creditor cannot reach it to satisfy claims against her so long as the trust is properly drafted to include appropriate distribution standards and administrative and other provisions. The woman may be a discretionary beneficiary of the trust, and the trustee may distribute the funds she needs for living expenses. Additionally, because they have less money and property during their retirement, women need to have a solid plan in place to make sure that they are able to financially provide for their loved ones upon their death and that unnecessary costs and expenses are minimized to the extent possible.

Care for loved ones. Many women are caregivers for minor children, adult children with special needs, or aging parents. As a result, they are often concerned about who will care for their loved ones if they are no longer able to do so. If a spouse or sibling is not available to provide care, they need to make sure that another family member or trusted individual can be the caregiver (sometimes called a guardian of the person) for their loved one. The same individual—or someone else—can serve as the guardian of the loved one’s estate (sometimes called a conservator or guardian of the estate) to manage the inheritance for their benefit. In the case of a child with special needs, if no family member is able to take on the responsibility of their care, a group home or assisted living facility may be the best choice. A special needs trust may need to be established to ensure that funds are available for the child’s care but do not decrease the amount of government benefits they are eligible to receive.

Anderson, Dorn & Rader Can Help You Plan Ahead!

You have accomplished a lot in your life! Celebrate your accomplishments and contributions during Women’s History Month by contacting us to set up an appointment to create an estate plan that provides for your own future needs and those of the people you love. You deserve the peace of mind that comes with knowing your future is secure.

define retirement planWhile most people know that retirement planning is important, many do not have a good idea of what a retirement plan actually is.  A comprehensive retirement plan is essential if your goal is to retire comfortably.  But, even with a good plan mistakes are possible, which can be very costly.  In order to avoid those mistakes, you first need to know how to define retirement plan.

How to define retirement plan

A retirement plan is the process of determining retirement income goals and the transactions and decisions that are necessary to achieve those important goals. Retirement planning involves recognizing your sources of income, estimating current and future expenses, implementing a savings program and managing your assets. Future cash flow must also be estimated in order to determine if your retirement income goal is reasonable and can be achieved. This is how to define retirement plan.
In the most basic sense, a retirement plan is what you do in order to be prepared for life after your paid job ends, not only financially, but also in all aspects of your life. The non-financial facets of a retirement plan include such lifestyle choices as how you want to spend time in retirement, where you want to live, and exactly when you will stop working completely.

Retirement plans need to be revised

The emphasis one puts on retirement planning changes throughout different life stages. Early in a person's working life, retirement planning is about setting aside enough money for retirement. During the middle of an individual's career, it might also include setting specific income or asset targets and taking the steps to achieve them. In the few years leading up to retirement, financial assets are more or less determined, and so the emphasis changes to non-financial, lifestyle aspects.

Make sure you have reasonable retirement goals

Most people don't really know where to start when it comes to retirement planning.  That is because most people have no realistic idea of how much money they will need to maintain their lifestyle once they retire.  Some believe they need much more than they really do, which unnecessarily makes their retirement goals unachievable.  While others set their goals much too low, which ultimately results in financial problems during retirement.

Prepare for health care costs which will likely increase

Possibly the most important, yet most overlooked, issue in retirement planning is being prepared to cover your future health costs. While it may be difficult to do, it is really essential to estimate your likely health care costs to be sure that you have sufficient income to cover them.  The reality is, as we age, our need for health care typically increases.  So does the costs for treatment.  According to one report, a 65-year-old couple retiring in 2016 will pay an average of $260,000 in healthcare costs during retirement.  It is not safe to assume that Medicare will cover all of those costs.  So, you need to be prepared.

Consider the possibility you may need long-term care

For those who have the experience of caring for an aging parent, you know that the time and expense of providing that care can be significant. The medical expenses associated with a short-term illness can be enough to exhaust your savings.  So, the possibility of needing long-term care must be considered in retirement planning.  It is projected that 70% of individuals who have reached retirement age will need some form of long-term health care.  So, consider your long-term care options ahead of time so you can  plan for them successfully.

Be sure to have sufficient savings

If you start saving for retirement now, you will have a much better chance of accumulating sufficient money to provide for a comfortable retirement. That is just common sense.  The sooner you start putting money aside, especially in an interest-bearing account, the more money you will have.

You may need to update your retirement plan

Do not overlook the need to periodically revise your retirement plan. You should do this at least every couple of years, just to make adjustments for the changes in investments, income, and expenses.  Any significant life event, like the birth of a child or a marriage, would be a sure sign that it is time to review your retirement plan.  If you fail to keep your retirement plan current, it is more likely that the plan you have will not sufficiently meet your retirement goals.
Attend a FREE Webinar today! If you have questions regarding your retirement plan, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

Roth IRA benefits Traditional IRAs and retirement plans sponsored by employers are great retirement investment tools. While there are benefits associated with these types of retirement accounts, Roth IRA benefits should also be considered before determining which type of plan is right for you.  In reality, the benefits of converting to a Roth IRA may be even better.  You can choose to either transfer all or some of your existing retirement account to a new Roth IRA, and you can do so without regard to your income.

What is an IRA and how does it work?

An IRA is essentially an investment account with several tax advantages that provides a reliable way to save money for retirement. Whether you have a traditional or Roth IRA, you will not be required to pay taxes on any earnings for the retirement account. Instead, the earnings can be reinvested and compound on a tax-deferred basis to experience even more growth. Once you reach retirement age and begin to make withdrawals from your IRA, your tax obligation will depend on three factors: the type of IRA you have, your present income and the amount of your withdrawals.

The different types of IRAs

There are four different types of IRAs, each with its own benefits. The first two, Traditional IRAs and Roth IRAs, are created by individuals. Both a Simplified Employee Pension (SEP) and a Savings Incentive Match Plan for Employees (SIMPLE) are made available through an employer. All IRAs are “fully vested,” which means that all contributions and earnings belong to the individual, including those contributions made by their employers.

How is a Roth IRA different?

Each type of IRA has its own eligibility requirements based on certain income limits. Anyone with earned income who is younger than 70 ½-years-old can make contributions to a Traditional IRA.  With a Roth IRA, however, there are income limitations on your ability to make contributions.   For single filers in 2017, that income threshold starts at $118,000 (up from $117,000) and ends at $133,000 (up from $132,000). In that range, your contribution is limited, eventually reaching zero.  For married filers in 2016, that income threshold starts at $186,000 (up from $184,000) and ends at $196,000 (up from $194,000).  “Earned income” refers to the money an individual is paid to work, which includes wages, salaries, tips, bonuses, commissions, and self-employment income.

Basic Roth IRA benefits

If there is a chance that your income tax rate may increase in the future, then converting to a Roth IRA should be considered. When your earnings are currently too high to qualify for making contributions to a Roth IRA, you can accomplish the same goal by converting to a Roth IRA instead.  There are no income limitations on Roth IRA conversions.    Roth IRA benefits mean you can enjoy tax free retirement income – an obvious benefit.
One consideration, though, is whether the amount you plan to convert, when coupled with your current year’s income, will create a significant tax burden. In other words, if the conversion will cause you to be placed in a higher income tax bracket, or subject you to unnecessary taxes, then you may want to reconsider.

How to convert to a Roth IRA

The easiest way to convert a retirement account to a Roth IRA is to make a direct trustee-to-trustee transfer between financial institutions. Or, if you keep the retirement account at the same investment firm, you would simply request that your traditional IRA is re-designated as a Roth IRA.  That way you do not need to open a new account.
If you are issued a check by your financial institution, you must withhold 20% of the amount for tax purposes. As long as you deposit all of the funds, including amount withheld, into the new Roth account within 60 days, you will not incur any penalty.  Otherwise, you may be subject to a 10% early withdrawal penalty, if you are younger than 59 ½ and no exception to the early withdrawal penalty applies.   The penalty will be imposed in addition to the income taxes you already owe on the entire converted balance.

Differences in Tax Incentives between Traditional and Roth IRAs

Traditional IRA contributions are tax deductible during the year you make the contribution. However, withdrawals from a Traditional IRA, during retirement, are taxed at ordinary income tax rates. Roth IRAs do not provide a tax break on contributions, but instead, the earnings and withdrawals are tax-free. So, you can avoid taxes when you contribute to a traditional IRA, while you avoid taxes when you withdraw from a Roth IRA during retirement.
It is never too late to start planning for your retirement. It could be a mistake to rely solely on your Social Security benefits to provide a comfortable retirement.  Be proactive and make a comprehensive retirement plan now, so that you can relax in your golden years.
Attend one of our FREE Webinars today! If you have questions regarding Roth IRA benefits, or any other retirement planning needs, please contact the experienced retirement planning attorneys at Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

retirementIf you are planning for your retirement and trying to decide where to spend those relaxing days, come to Reno, Nevada.  This is especially true if you expect to be an active adult when retirement time comes for you.  Reno, "The Biggest Little City in the World," is the 4th largest city in Nevada with a population of approximately 220,000.  With its casinos, resorts and the nearby Sierra Nevada Mountain range, this fun city is a great place for retirees who love the outdoors.
All the charm of Reno
Believe it or not, Reno's notoriety reached its peak in the 20th century when people from the east, especially New Yorkers, came to the city to get a quickie divorce. While gambling remains essential to Reno's economy, it is no longer the gambling capital of Nevada.  Its most successful hotel casinos are the Atlantis, the Peppermill, and the Grand Sierra Resort.  Reno has a booming food culture (primarily in its Midtown district), is a budding artist community, and is a family friendly city continue to grow.  With the growth of the tech community in Reno's surrounding community, expectations are that Northern Nevada will continue to boom for many years to come.
Reno's great outdoors
The nearby Sierra Nevada Mountains and deserts make Reno a great area for people who like the outdoors.  There are so many cultural and sporting venues for residents to enjoy. In 2004, Reno completed its $1.5 million whitewater park on the Truckee River, located in downtown Reno.  This amazing attraction brings paddlers from all over the country. If skiing is your thing, there are 18 ski areas within 2 hours of the city.  Reno is in close proximity to three major bodies of water: Lake Tahoe, the Truckee River, and Pyramid Lake.  This is all not to mention the local hiking, fishing, trail riding, running, golfing, and the myriad other outdoor activities the city has to offer.
What makes Reno a special retirement community?
Outdoor recreation is readily accessible from Reno, thanks to its desert, Lake Tahoe, and the nearby Sierra Nevadas.  There are a lot of active adult communities to choose from.  Reno also has a full range of cultural institutions including museums, orchestras, galleries, the Nevada Shakespeare Company, the Pioneer Center for the Performing Arts, and an active library system. There are many events and festivals held in Reno throughout the year, including the classic car convention Hot August Nights, Street Vibrations, the Reno Air Races, the Hot Air Balloon Races, the Rib Cookoff, and local cultural events including the Italian Festival, the Basque Festival, the Greek Festival... the list goes on and on.
Probably best of all is the fact that Nevada has no income tax!  We see many employees that have spent a lifetime accumulating hard earned retirement income moving to our beautiful state and keeping 4%, 5%, or even 10% more of their retirement money by avoiding state income taxes.  Not to mention that the cost of living in Reno is significantly less expensive than many other areas on the west coast.
Why You Need a Retirement Plan
Most clients rely on social security (and maybe a 401(k)), believing they have nothing to worry about when it comes time to retire.  Nothing could be farther from the truth.  The reality is, we all need to take our retirement into our own hands and not be dependent on government benefits to secure a comfortable retirement for us.  There is more to retirement than making sure you can pay your mortgage - you should also consider being able to afford a certain lifestyle (do you like to travel?), the potential risks with investments (have you paid attention to the market since 2008?), any cash flow needs (do you have any hobbies you would like to afford?), as well as how long your retirement plan should provide for your care.
Understanding Social Security benefits
Many people have a concern about the certainty of the Social Security system.  Realistically, the prospects of relying on government retirement benefits are not very good.  While you are employed, you make contributions into Social Security in the form of Federal Insurance Contributions Act (FICA) taxes that are withheld from nearly all paychecks.  Those contributions are used to pay Social Security benefits for other workers when it is their time to retire.  Once it is your time to retire, you receive benefits from the system, as well (based upon the amounts contributed by other workers at the time of your retirement).
Social Security benefits are often uncertain
According to one study, the ratio of covered workers versus beneficiaries under the Social Security program has decreased significantly.  Back in 1940, 35.3 million workers paid into the system, but there were only 222,000 beneficiaries.  That was a ratio of 159 to 1.  However, in 2003, there were 154.3 million workers and 46.8 million beneficiaries; a ratio of 3.3 to 1.
With more and more people retiring and living longer than before, a greater burden is being placed on the Social Security system.  Ultimately, the strain on the system may require our government to reduce social security benefits, or even suspend them completely.
Effects of unforeseen medical expenses on your retirement plans
As we age, medical problems typically increase, as do health care expenses.  Without sufficient financial support, medical expenses may create a financial burden, too large for you to bear.  So, a part of your retirement plan should probably include long-term insurance to help finance your health care needs during retirement.
What if you want to retire earlier?
Under Social Security, the earliest you can start collecting retirement benefits is age 62.  However, the longer you wait to start collecting social security, the larger your payments will be.  In fact, you will not receive your full retirement payout, unless you wait until “full retirement age,” which has been increased to 67 years old, for those born in 1960 or later.  For individuals born before 1960, their full retirement age will depend on their birth year.
Make sure your estate plan is up to date
Your estate plan will govern the distribution of your assets upon your death.  Whether you currently have a will, trust, or no plan at all, this is an area of the law that changes regularly.  While considering your retirement, you should consult with an attorney about coordinating your retirement plan with your estate plan.  Generally, you want to make sure there are beneficiaries named on all of your qualified retirement accounts, to make sure your hard-earned money can pass to your beneficiaries upon your death without requiring a complicated, drawn-out legal process.
Attend a free Webinar!. If you have questions regarding retirement planning or any other estate planning issues, please contact Anderson, Dorn & Rader, Ltd. for a consultation, either online or by calling us at (775) 823-9455.

retirement planningFor some, the thought of retirement is stressful.  Clients often question whether they will have enough savings or income to be able to retire comfortably.  Many wonder when they actually need to start saving and what is the best way to accumulate savings for retirement.  While these concerns are reasonable, they should never be intimidating.  Your estate planning attorney or financial advisor can help you with your retirement planning to make sure you reach your goals.  When you begin the planning process you should be familiar with these five common mistakes clients often make in retirement planning.

Mistake No. 1. Establishing unreasonable retirement goals

It is not uncommon for clients to be unclear about how much income or savings they will ultimately need when they retire, especially when the goal is maintaining their current lifestyle 20 or 30 years down the line. In some cases, clients do not plan for sufficient financial resources in the future, which will result in financial issues later on.  In others, clients believe they need much more money than they actually do, so their retirement goals become nearly impossible to reach.

Mistake No. 2. Overlooking the potential for higher health care costs

A primary concern in retirement planning is being able to handle the cost of health care at a time when the need for health care will likely increase.  The reality is that seniors generally need more health care, and this factor needs to be a consideration in your retirement planning.  The problem comes when clients overlook the likelihood that health care costs will increase over time.  If you do not account for that increase as part of your plan, then you may still face financial problems during retirement.
According to some predictions, a 65-year-old couple retiring now will face nearly $300,000 in health care costs alone.  What will those numbers look like in 20 or 30 years? Do not make the mistake of assuming that Medicare or Medicaid will be sufficient to cover your medical expenses when you retire.  You need to be proactive and plan ahead as best you can.

Mistake No. 3. Disregarding the need for long-term care

It is no secret that the time and expense required to care for an aging parent can be substantial.  Medical costs alone can exhaust all of your savings if you are not  careful and fail to plan ahead.  Some statistics show that nearly 70% of retired individuals will require some long-term health care.  For this reason, it is important to consider possible long-term care options and make that a part of your retirement plan in order to be sure you have sufficient funds to cover the costs.

Mistake No. 4. Not setting aside sufficient savings

One of the reasons it is important to start your retirement planning as soon as possible is that the sooner you start saving, the more likely you are to have sufficient financial resources for retirement.  The sooner you open your savings account and start making regular deposits, the more compound interest you can ultimately earn.  For example, a 25-year-old with a retirement goal of $1 million at age 65 would need to save about $345 per month for 20 years, with investments earning 8% per year over 40 years.  Now, a 45-year-old with the same retirement goal would need to save $1,698 per month for the next 20 years.  The benefits of starting early are obvious.

Mistake No. 5. Forgetting to update your retirement plan

Just like with your estate plan, it is important to periodically review your retirement plan and make any necessary revisions.  You may need to make adjustments to your plan to address changes in the market that will affect your investments.  You may also need to modify your plan when there is a change in your income or expenses that will affect your overall plan.  In addition, significant changes in your family dynamic may warrant modifications, such as the birth of a child or grandchild, divorce or the death of a spouse.

Retirement options available in Nevada

The attorneys at Anderson, Dorn & Rader, Ltd. are here to review retirement plans with you and explain the advantages and disadvantages of the available options.  Basic retirement planning services that may be examined include:

One aspect of retirement planning also includes choosing who the beneficiaries of your retirement assets will be.  These decisions may have significant tax consequences.  Retirement planning and estate planning are best accomplished simultaneously.
Learn more from a free report!  If you have questions regarding retirement planning, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

401k beneficiary designations
When you first establish your 401k plan, you will be required to designate a beneficiary to receive the balance of the account in the event you pass away.  For most people, especially married couples, this seems like a simple task.  However, there are some factors that you should consider before making this decision.  There are some potential problems to avoid with 401k beneficiary designations.  Here is what you need to consider.
Shouldn’t my spouse be my primary beneficiary?
For those of us who are married, it may seem like a no-brainer.  You should designate your spouse as your primary beneficiary, right?  Well, actually, you have no choice.  Federal law says that your spouse is automatically the beneficiary of your 401k. Nevertheless, you need to fill out the beneficiary form with your spouse's name.  In order to name someone other than your spouse as beneficiary, your spouse must sign a waiver of his or her rights to a qualified joint and survivor annuity or a qualified pre-retirement survivor annuity.   The manner and timing in which these waivers are executed is crucial.  A simple waiver of these rights in a premarital agreement is insufficient to satisfy the waiver rules.
Who should I name as beneficiary if I am single?
If you are single, your 401k account goes to your named beneficiary if you die.  If you do not designate anyone, the default beneficiary under most 401(k) plan documents is your estate, which can result in disastrous tax consequences.  If you have children you may consider naming them as beneficiary.  If you remarry, you will have to decide whether to change your beneficiary designation.  Automatically, after a year your new spouse will take precedence over your children, by law.  The only way around that is to have your new spouse sign a waiver of his or her rights to a qualified joint and survivor annuity or a qualified pre-retirement survivor annuity.
Naming Your Minor Children as Beneficiaries
If your children are minors, you should carefully consider whether or not to name them as beneficiaries.  That is because, in most cases, the proceeds cannot be transferred directly to a minor.  Instead, the court will need to appoint a trustee or guardian, to manage the money for the benefit of the children.  This can be a time-consuming process.  In addition, the minor child will obtain complete control over the account upon reaching the age of majority, which is 18 in most states.  You can also consider creating a trust for your minor children, and naming the trust as the beneficiary of your 401k.  This method will take less time than a court proceeding, while allowing the money to be invested easily through the trust.  Special care must go into the drafting of a trust designed to receive 401(k) proceeds to ensure that a child’s life expectancy may be used for purposes of calculating minimum required distributions after your death.
Domestic Partners
For those who are not married but have a domestic partner, naming your partner as your 401k beneficiary can be helpful in more ways than one.  From a legal standpoint, naming a domestic partner as beneficiary can be seen as evidence necessary when registering as domestic partners in states where this option is available.  It can also be used as evidence to obtain domestic partner health benefits, where applicable.  The only thing to consider, in this situation, is whether or not family members may object or appeal the transfer of benefits.
If you have questions regarding 401k beneficiaries, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

converting to a Roth IRATraditional IRAs and retirement plans sponsored by employers are great retirement investment tools.  While there are benefits associated with these types of retirement accounts, Roth IRAs may have additional benefits as well.  You can choose to either transfer all or some of your existing retirement account to a new Roth IRA, and you can do so without regard to your income.
Differences in Tax Incentives between Traditional and Roth IRAs
Traditional IRA contributions are tax deductible during the year you make the contribution. However, withdrawals from a Traditional IRA, during retirement, are taxed at the ordinary income tax rates.  In other words, by contributing to a Traditional IRA you can defer taxes until you are required to take distributions.  This allows for tax-free growth of your retirement funds for years, or even decades.  Roth IRAs do not provide a tax break on contributions, but instead the earnings and withdrawals are tax-free. So, you can avoid taxes when you contribute to a traditional IRA, while you avoid taxes when you withdraw from a Roth IRA during retirement.
Can I contribute to a Roth IRA?
Each type of IRA or retirement account has its own eligibility requirements, based on certain income limits.  Anyone with earned income who younger than 70 ½-years-old, can make contributions to a Traditional IRA.  A Roth IRA, however, only allows full contributions if the individual’s income is below $116,000 for an individual ($193,000 for a married couple filing a joint tax return).  “Earned income” refers to the money an individual is paid to work, which includes wages, salaries, tips, bonuses, commissions, and self-employment income.  Many people cannot contribute to a Roth IRA due to income limits, and are forced to put their retirement savings into Traditional IRAs or another employer sponsored plan (such as a 401(k)).
Why should I convert?
If there is a likelihood that your income tax rate will increase, then converting to a Roth IRA should be a serious consideration.  When your earnings are currently too high to qualify for making contributions to a Roth IRA, you can accomplish the same goal by converting to a Roth IRA instead.  Converting to a Roth IRA means you must pay the income taxes now, but you can enjoy tax free retirement income when you withdraw retirement funds in the future – an obvious benefit.  One consideration, though, is whether the amount you plan to convert, when coupled with your current year’s income, will create a significant tax burden.  If the conversion will cause you to be placed in a higher income tax bracket, or subject you to unnecessary taxes, then you may want to reconsider.
How the conversion is made
The easiest way to convert a retirement account to a Roth IRA is to make a direct trustee-to-trustee transfer between financial institutions.  Or, if you keep the retirement account at the same investment firm, you would simply request that your traditional IRA is re-designated as a Roth IRA.  That way you do not need to open a new account.  You do not need to convert all of your Traditional IRA at one time; this process can be stretched out over a number of years to minimize the taxes you have to pay upon conversion.  Furthermore, if it turns out that converting during one year was a bad financial decision, there are ways in which you can reverse the conversion and put the funds back into your Traditional IRA to be converted in a future year (note, however, that there are very strict timing requirements for this rollback).
If you are issued a check by your financial institution, you must withhold 20% of the amount for tax purposes.  As long as you deposit all of the funds, including amount withheld, into the new Roth account within 60 days, you will not incur any penalty.  Otherwise, you may be subject to a 10% early withdrawal penalty, if you are younger than 59 ½.  The penalty will be imposed in addition to the income taxes you already owe on the entire converted balance.
If you have questions regarding Roth IRAs, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

effects of bankruptcy on retirement planningIf you find yourself overwhelmed financially, and you are considering whether bankruptcy is the best option for you, a primary concern may be the loss of your assets during the bankruptcy proceedings.  Another concern may also be the effects of bankruptcy on retirement planning.  Clients ask us, "Will filing for bankruptcy force me to give up my retirement benefits?"  This can be very disconcerting if you have worked for many years in order to achieve these hard-earned retirement benefits.
Should I cash out before filing for bankruptcy?
Usually, cashing out your retirement accounts before filing for bankruptcy is not a good idea.  Retirement accounts typically enjoy significant protection from creditors and may be either exempt or excluded from the bankruptcy estate altogether.  Furthermore, there are severe penalties and negative tax consequences when cashing out your retirement accounts before you meet the statutory age for distribution.
Qualified retirement plans are often exempt
Frequently, bankruptcy debtors are allowed to retain certain retirement benefits, which are designated as “qualified” retirement plans.  A “qualified retirement plan” may be generally defined as "any money or assets, payable to a participant or beneficiary from, or any interest of any participant or beneficiary in, a retirement plan or profit-sharing plan that is qualified under Section 401(a), 403(a), 403(b), 408, 408A or 409 of the Internal Revenue Code of 1986, as amended, except as provided in this paragraph."
The most common “qualified retirement plans” include profit sharing plans (including 401(k) plans), defined benefit plans, and money purchase pension plans.  In other words, a qualified retirement plan is one in which your contributions are not taxed until you withdraw money from the plan.
ERISA Protections for 401(k) contributions
A 401(k) plan is protected from creditors through the Employee Retirement Income Security Act (ERISA).  This protection is available only if the 401(k) account remains intact, meaning that no money has been withdrawn from the 401(k) account and transferred to an unprotected account, such as a checking or savings account.  Once that happens, protection from bankruptcy is lost, as the bankruptcy trustee will now be able to access the funds and disperse them to creditors.
Other protected retirement accounts
Some annuities or retirement plans are protected because they include restrictions on when and how funds from these plans can be withdrawn.  For example, there are some annuities available to particular organizations and non-profit entities, known as 403(b) retirement plans, which are exempt.  They are similar to 401(k)s, as they allow employees to make tax exempt contributions until withdrawals are made.  These annuities are protected from bankruptcy.  Roth IRAs and 457 plans are also generally exempt.  The 457 plan is a non-qualified tax advantaged deferred-compensation retirement plan, available to governmental and certain non-governmental employers in the United States.
If you have questions regarding bankruptcy consequences and protecting your assets, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

IRA Withdrawals Taxed During RetirementIf creating your retirement plan has not been a priority, it is not too late to start.  Although Social Security will provide a sparse amount of retirement income, it will not guarantee a comfortable retirement.  Instead, you need to make a retirement plan for yourself, so your golden years can be as relaxing as you imagine they will be.  An IRA is a great investment tool that allows you to plan, save and invest in your retirement.  A common question, though, is how are IRA withdrawals taxed during retirement?
What is an IRA and how does it work?
An IRA is basically an investment account, with various tax advantages, that allows you to save money for retirement. Regardless of whether you have a traditional or Roth IRA, you will not pay taxes on any earnings for the account. Instead, the earnings are reinvested and compounded to allow your account to experience even more growth. Then, once you retire and begin to make withdrawals from the IRA, the amount you pay in taxes will depend on three factors: the type of IRA you have, your income and the amount of your withdrawals.
What makes traditional IRAs different?
A traditional IRA is funded with “pre-tax” dollars, meaning that you do not pay any taxes on your contributions or the interest they earn, until you start taking withdrawals during retirement. Then, each withdrawal is taxed as ordinary income. For instance, if based on your income, you owe 20% tax on your income and you take a withdrawal of $10,000 during the tax year, you will owe $2,000 in federal and state income tax.
Roth IRAs are taxed differently from traditional IRAs
A Roth IRA, on the other hand, is funded with “after-tax” dollars. A Roth IRA does not provide any tax benefits relating to contributions. However, the earnings and withdrawals from Roth IRAs are typically tax free. A major advantage to a Roth IRA is that not only are your earnings allowed to grow tax-free, but when you retire and take withdrawals, you pay no income taxes.  In essence, you avoid taxes when you contribute to the traditional IRA, but you avoid taxes with the Roth IRA when you withdraw money at retirement.
Early withdrawals from a traditional IRA
With any type of IRA, the IRS will charge a penalty for any early distributions or withdrawals.  With a traditional IRA, you will be required to pay an additional 10% penalty if you take any distributions before you reach the age of 59½.  That is in addition to the income taxes that are imposed.
Early withdrawals from a Roth IRA
One benefit of a Roth IRA is that you are allowed to withdraw your original contributions at any time, without penalty.  That is because you have already paid income tax on those funds. However, early withdrawals of any of your earnings will be subject to the 10% penalty, in addition to income tax for withdrawals beyond the initial contributions. The Roth IRA has an additional requirement.  Along with the age requirement of 59½, the Roth IRA must be established for at least five years before you can begin to withdraw earnings, without penalty.
If you have questions regarding IRA taxation, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
To learn more, please download our free understanding the Nevada uniform transfers to minors act here.

update your retirement planHopefully by now you understand that you need more than Social Security benefits and a 401k to be adequately prepared for retirement. The truth is, in order to be comfortable in your golden years, you cannot depend solely on government benefits.  Once you establish your plan, your job isn’t over.  Knowing when to update your retirement plan is also important.
When do I need to update my retirement plan?
It is not a bad idea to review your retirement plan each year to make sure your wishes have not changed.  There are also certain times during your life, when major changes occur.  For example, if there is a significant change in your finances, your retirement plan would likely need to be revised.  Other events, such as changes in your investment portfolio or the purchase of real estate, may require revisions to your estate plan, as well.
Another important consideration is the need to revise your beneficiaries.  If the event of the death of an heir, or the birth of a new heir, you may need to change your beneficiary designations on your IRA, 401k, and insurance policies.  Remember that, upon your death, these accounts are transferred automatically to the beneficiaries you have named.
Retirement planning typically does not occur all at once
Initial planning for retirement should begin in your mid-thirties.  The initial plan is usually not very detailed.  Instead, the goal is to begin considering when you want to retire, so you can estimate how much money you will need.  Beginning to plan early allows you to determine whether your goals are realistic.
When you reach your mid-forties, you should have a better understanding of your financial situation.  You can decide whether you may want to travel during retirement or where you want to settle down.   At this point, your task is to establish more concrete goals.  You will also be better able to predict how much money you will have at retirement.
Final planning should take place in your fifties
Once you reach your fifties, you are in a better position to do some serious retirement planning.  Examine your investments and transfer them to safer, more stable investment tools.  The growth of your investments will be less important than trying to maintain your capital.
Now you can determine when you will be eligible to receive retirement benefits, which is important since the age you start taking disbursements will have an effect on how your retirement plan works.
Can I retire early?
The earliest you can begin collecting Social Security benefits is 62.  The longer you wait to start collecting, the larger your payments will be each month.  So, hold out as long as you can.  Actually, you cannot receive full retirement benefits unless you wait until “full retirement age,” which is now 67 years old, if you were born in 1960 or later. If you were born before 1960, your full retirement age depends on what year you were born.
If you have questions regarding updating your plan, or any other retirement planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.

Retirement Planning in Nevada from Brad Anderson

It is time to start planning your retirement. It is better not to rely on your Social Security retirement benefits to be enough to secure a comfortable retirement. Learn more about retirement planning in Nevada in this presentation.

Retirement Planning in Nevada

The purpose of retirement planning is to be prepared for the period of your life when you stop working full-time. You need to consider all aspects of your life, including non-financial aspects, such as maintaining the standard of living to which you are accustomed.
Topics covered in this whitepaper include:

  1. What is a Retirement Plan?
  2. What is the General Purpose of Retirement Planning?
  3. What Does Retirement Planning Include?
  4. How do I Prepare to Create My Retirement Plan?
  5. How does a Retirement Planning Attorney Help?
  6. Rules and Regulations Governing Retirement Accounts
  7. Be Sure to Revisit Your Retirement Plan
  8. What If I Want to Retire Early?

Click here to read the whole article or download the PDF.

The baby boomer generation is comprised of people who were born from 1946 to 1964. This group is reaching the age at which people typically retire, but studies are showing that a very significant percentage of them are not prepared financially.
There are a number of contributing factors to this lack of preparation.  One of them is the idea that Social Security will be enough to finance a comfortable retirement. When you look at the facts you see that Social Security is really only going to provide a modest safety net, and many people find this out when it is too late to make up for lost time.
Another reason why some people don't plan ahead for retirement is that they expect to receive significant inheritances. This may be a mistake because research is indicating that many baby boomers will be inheriting less than they may expect.
A study done by Boston College's Center for Retirement Research looked at the anticipated inheritances of baby boomers. They found that from the middle of 2006 to the middle of 2010 the amount of projected inheritances dropped by 13%. The financial crisis of 2007 and 2008 definitely took its toll on the inheritances that many baby boomers were counting on.
Increased longevity is another factor.
The segment of the population that is at least 85 is growing faster than any other age group. Clearly, when you live to an advanced age you are incurring expenses for a longer period of time, and that is going to reduce the amount that you have to pass along to your children and grandchildren.
Receiving an inheritance can definitely give you a financial lift. However, it is not wise to count on anything, and it is really up to each one of us to take personal responsibility for our own financial well-being.

Financial planning lawyers will always emphasize the need to accumulate resources for retirement.
There are those who make no advance plans because they are under the impression that Social Security will take care of everything. The fact is that this program is a safety net, not a retirement plan. If you want to be able to "live the dream" as it were you're going to have to plan ahead intelligently and stick to the plan with diligence over an extended period of time.
The above having been stated Social Security is still going to be an important piece of the puzzle. We would like to share three basic facts that everyone should know about Social Security.
You may have noticed that you are not receiving an annual Social Security statement in the mail anymore. The practice has been discontinued as a cost-cutting measure, but you need this information to be able to make budget projections.
It is still available to you. You can obtain access to your statement by registering an account online at the Social Security Administration website.
Another thing to consider is the application process. You can apply four months before you reach the age at which you become eligible for benefits. You can submit your application over the phone, in person, or online.
The last thing we would like to cover is the eligibility age. At the present time the age of full eligibility is 67 if you were born in 1960 or after. It is 66 if you were born between 1943 and 1954. If you were born between 1955 and 1959 your full eligibility age is somewhere between your 66th and 67th birthdays.
It is possible to begin receiving Social Security when you are as young as 62, but you would not be receiving your full benefit.
To start planning ahead for the future the logical first step is to sit down and discuss everything in detail with a licensed and experienced Reno estate planning lawyer.

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