Estate planning attorneys have noticed an interesting trend emerging in the United States.
There was a 14% increase in the numbers of people who are at least 60 years of age who are living with someone as a domestic partner according to a 2008-2010 United States Census Bureau survey as compared to 2005-2007 numbers.
In most cases the underlying reason that so many seniors are choosing to live together is that marriage can have negative financial implications.
Retirement pensions are one of the concerns. Many pension plans allow for the surviving spouse of the individual receiving the pension to continue to receive survivor's benefits after the death of his or her spouse.
Given the limited income that is provided by Social Security this survivor's pension can be the difference between relative poverty and a comfortable lifestyle.
In many instances the rules governing the survivor's pension state that it will no longer be paid if the recipient was to get remarried. Because this income can be so important to many individuals they simply don't get legally married.
There are other financial reasons why seniors choose to remain unmarried, not the least of which are the preferred tax benefits of a single person. If you make the choice to remain single, but live with your new partner, you must be certain that you have executed all of the appropriate estate planning documents.
The law will not recognize your significant other if you were to become disabled, need medical decisions to be made for you, or pass away without recording your wishes in a legally binding manner. However, with a visit to a good estate planning lawyer you can make sure that you and your partner are provided for come what may.
With a proper estate plan you can not only provide for your domestic partner, but you can also include an incapacity provision empowering your partner to act as your representative and handle your affairs if you were to become unable to make sound decisions at some point in time. You can also allow them access to you if you are hospitalized and name them to make medical decisions for you in your advance directives, should you choose to do so.
Comprehensive retirement planning is going to involve deciding where you would like to live after you put your working years behind you. People who live in many of the states have incentives to relocate. Some are looking for warmer climates, and financial matters can enter the equation as well.
Certain states have better tax structures for retired individuals than others, and in fact here in Nevada we are fortunate in a number of ways. Indeed, Nevada residents who are planning for retirement have some incentives to stay right at home.
We are one of the handful of states that does not have an income tax on the state level. This is a huge advantage and it is something to keep in mind if you are considering the possibility of relocating after you retire.
Another thing to consider is the legacy that you will be leaving behind to your loved ones. Some states have an estate tax on the state level. A few have an inheritance tax, and New Jersey and Maryland have both of these taxes on the state level.
There is no type of death tax on the state level here in Nevada.
If you are concerned about taking tax efficient steps as you are preparing for retirement you would do well to consider the advantages that we are enjoying right here in the Silver State. Most people would not want to make a move that results in an increased tax burden at a time when they are going to start living on a fixed income. Also, if you are looking for mild sunny winters, Southern Nevada is certainly a viable option.
Retirement planning requires a firm understanding of all relevant facts, so changes to the Social Security program are certainly something to monitor.
For most people Social Security is going to be an important income stream during retirement. By no means should you depend on it as your sole source of income, if you can avoid it, but it is certainly going to help.
Up until last year the Social Security Administration sent out statements annually to people who have been paying into the program. When you think about the volume of paper involved in something like this and the cost of postage you you realize that this is a very big expense to the government.
Since we live in the digital age and almost everybody is online the SSA made a shift. The statements are no longer being mailed to anyone who is under the age of 61.
However, it is possible to create a My Social Security account on the SSA website and gain access to your statement whenever you would like to see it.
In addition to this there has been a new announcement from the Social Security Administration. As of March of next year paper checks will no longer be an option. Recipients of Social Security are going to have to set up direct deposits or agree to payment through the loading of a special type of debit card.
Officials say that this move along with the discontinuation of some other types of government benefit checks will save some $1 billion over the next 10 years. These savings will certainly be welcomed by those who are concerned about the costs associated with administering the program.
Some need the money and postpone retirement or get a part-time job; others simply have the urge to keep busy in some constructive way during retirement and choose to do some type of work.
These days financial planning experts often write about the value of working longer. This can be necessary if you simply need more time to accumulate the resources that you need to retire. Others who don't absolutely have to work choose to do so because they want to have plenty of discretionary income so they will never be pinching pennies. Some simply feel the need to remain productive.
When you think about working during what would otherwise be retirement you can expand your vision; you are not limited to what you have been doing throughout your career. There are many different ways that you can make money from the comfort of your own home from freelance opportunities within your areas of expertise to maintaining an online store.
You could also consider going into business for yourself outside the home in a store or office. Many people incorporate their passions into a business later in their lives, such as a flower shop or a restaurant.
It is certainly nice to have a source of significant income going into your retirement years to make your Social Security benefit more of a supplement and less of a staple. You are in fact allowed to earn any amount of money while receiving Social Security without being penalized once you reach the age of full eligibility.
If you look ahead and take the appropriate steps you can potentially step right into your own business and work a bit on your own terms during your retirement.
Many people trade up throughout their lives and live in increasingly more valuable homes. This can provide you with an ever-improving quality of life while you put your money into real property. Depending on the markets this can be an efficient course of action all around.
Keep in mind, however, that you will still have to pay property taxes after the home is paid for during your retirement years. Getting a rather large annual bill is something that you have to prepare for when you are budgeting for the future.
Apparently a lot of people fail to do so. At least $7 billion in property tax liens are imposed each year according to the National Tax Lien Association. This statistic includes all people who are delinquent on their taxes and not just retirees,but a number of retirees are at risk when they fail to put adequate money aside for the big tax bill.
Individuals who fall behind on their property taxes can usually arrange for installment payment plans. However, this approach is not ideal because you actually wind up paying more because the county may charge interest. Planning ahead would avoid unnecessary interest.
This is one of the many details that you have to take into account when you are making long-term financial projections. Keep in mind, as well, that as your financial circumstances change, other aspects of your estate planning may need to be adjusted. Contact your estate planning attorney for your regular review and keep your estate up to date.
It is said that there are some things that money can't buy, and wisdom would certainly be one of these things. When you are planning your estate your primary concern is going to involve our valuables. However, you may be able to pass on your values as well by maintaining a blog during your retirement years.
A lot of people have an interest in writing their memoirs once they have the time to devote to the project. This is a great way to share formative experiences with people that you care about. There is no substitute for learning by experience and some of these stories may be very instructive to the people that you will be leaving behind.
But what about publishing? And what if you don't finish the book prior to your passing?
There is a very simple solution these days in the form of self publication on your own blog. You can actually start your own blog without having any particular technical expertise by using very user-friendly platforms that are offered on sites such as WordPress.org.
When you have your own blog you can publish your work incrementally as you see fit so your family and friends can always have something new to read if you are updating it regularly. If you work on your blog throughout your retirement years you will have assembled a significant body of work by the time you pass away.
While it will forevermore exist in cyberspace, most blog sites provide a publication service, so you can print off a book of your blog. Now family members and even future generations of your family can draw from your experiences into perpetuity. There is no time like the present, so get started!
The liklihood that you will need long-term care towards the end of your life is relatively high. Budgeting for this cost is important because contrary to the beliefs of some people, Medicare does not pay for long-term care. If you think you can just simply write a check and be done with it you may not be aware of the extent of the costs associated with long-term care.
Every year the MetLife Mature Market Institute releases a survey that contains a great deal of information about long-term care expenses in the United States. They have just put out their 2011 version, and once again long-term care costs have gone up significantly.
If you were to spend a single day in a private room in a long-term care facility in 2011, the national average cost was $239, which is a $10 increase over 2010 figures or a 4.4% increase. A year in a private room in a nursing home in 2011 averaged $87,235. According to the United States Department of Health and Human Services the average length of stay is between two and four years.
When you see the facts it becomes clear that these are no trifling expenses. To devise a plan that prepares you for all eventualities, including the possibility of long-term care, simply take a moment to arrange for a consultation with a good Reno financial planning attorney.
A recent article in Forbes, quoting statistics provided by the Harris organization, found that out of 1022 people polled only 35% had executed a last will. Among younger Americans the figure was even lower as you might expect, with just 24% of the people who participated in the survey, under the age of 35, had executed either a last will or a living will.
Estate planning is an area where procrastination not only puts that person at risk it also puts there loved ones in a difficult position in the event of death or disability.
Most younger families rely on earned income to maintain quality of life. For this reason, it is essential that such families have an income replacement vehicle. This need is often met through life insurance. Coverage should be revisited as financial responsibilities increase. All families are well advised to implement a sound long-term financial plan. If this sounds like a good idea to you, take the first step and arrange for a consultation with a licensed and experienced Reno financial planning attorney.
When you are planning for your retirement you're probably envisioning beach scenes, leisure activities, unrestricted travel and a lot of rest and relaxation. To be prepared it is wise to budget for all the eventualities of aging. One of the things to take into consideration is the possibility of paying for long-term care.
Everyone is aware of the fact that some people eventually reside in nursing homes or assisted living communities, but there are those who take the attitude that this is something that happens to other people. There's nothing wrong with being optimistic, and some individuals who feel this way have taken good care of themselves. However, the statistics regarding just how many people do ultimately need this level of care is alarming. The United States Department of Health and Human Services tells us that no less than 70% of people who reach the age of 65 are going to need long-term care of some kind.
The USDHHS goes on to say that the average length of stay for a woman is 3.7 years, and for a man it is 2.2 years. The national average cost for a year in a private room in a nursing home in 2010 was around $83,500 and annual assisted-living community costs neared $40,000 on average.
Many will need assistance to address these costs. With this in mind, wartime veterans would do well to be aware of an often overlooked benefit called the Veterans Aid and Attendance special pension. Single veterans who need assistance with their day-to-day living needs can be eligible to receive as much as $1632 per month. You only need to have served for 90 days with at least one of them taking place during wartime to meet the length of service eligibility requirement. This benefit is something to explore if you have served in the armed forces and find yourself in need of long-term care at some point in time. You can do so by getting in touch with the United States Veterans Benefits Administration.
There are people who think that things will take care of themselves as the years pass, but the reality is that each of us must take responsibility for our own futures. There is more to planning for the latter stages of your life than simply anticipating your Social Security check and drawing up a last will.
You will eventually have to fund your retirement years if you do in fact expect to retire, and Social Security, even if it still exists in its present form by the time you retire, is probably not going to be enough. So if you want to be truly prepared you must anticipate your expenses and devise a plan that enables you to meet them comfortably.
There's also the possibility of incapacity. Approximately four out of every ten people who reach the age of 85 are suffering from Alzheimer's disease according to the Alzheimer's Association. Alzheimer's causes dementia, which can make it impossible for its victims to render sound financial, personal, and medical decisions. If you were to become incapacitated without making any advance plans, the court could appoint a guardian of its choosing to act in your behalf and you would become a ward of the state. This is a possibility that can be circumvented through the execution of the appropriate durable powers of attorney.
Of course there is also the matter of your legacy. Do you have specific things in mind that you would like to be able to do for your family members as your final act of giving? Do you perhaps have the desire to give something back to your favorite charitable organizations? If you do, these intentions will have an impact on your budgeting for the period of time that precedes your passing.
Because of all the different matters that must be addressed, it is a wise idea to tap into the expertise of an experienced estate planning attorney who has a thorough understanding of retirement and estate planning. He or she will advise you appropriately so that you can be sure that all of your bases are covered as you enter the latter portion of your life.
You may find yourself with a lot on your plate and when you do, you have to set your priorities. There are some matters that must be revisited every year, or every five or ten years, and there are others that are in your lap every day. When you are managing your investments things are changing by the second, and you are well aware of the need to constantly react to these changing market conditions. If you run your own business, the changes come in rapid-fire fashion as well and priorities can shift radically overnight.
This having been established, estate planning and the long terms plans that you have made for your twilight years are also impacted by the constant ebb and flow of change. When you originally construct your estate plan you have no choice but to work with the various relevant factors as they existed at that time. But things are always in flux, and what made sense in 1990, 2000, or even 2009 may no longer be appropriate in 2011.
This can be due to things that are out of your control like fluctuations in the estate tax rate and exclusion amount, the yield on your retirement investments, property values, and long-term care costs. And the need to review and potentially revise your estate plan can also arise as a result of changing circumstances that are specific to you and your family.
Depending on your age, health, and personal proclivities you may realize that the estate plan that you worked up ten or twenty years ago, or even the one you did last year is indeed outdated, but feel as though you still have plenty of time left to adjust it when you really need to do so. However, it is your loved ones who are in essence being asked to take that risk. Perhaps, it is best to stop procrastinating and have your plan reviewed right away.