As elder law and estate planning attorneys, we provide holistic financial planning assistance, because each stage of life leads to the next. When you engage our firm to help you develop a plan, you will enjoy your golden years with the knowledge that your legacy is protected.
Individual Retirement Accounts
An individual retirement account will probably play an important role in your retirement plan. The two types of accounts that are most widely utilized are traditional accounts and Roth IRAs.
You make contributions into a Roth individual retirement account after you pay taxes on the income, so distributions are not taxable. With a traditional IRA, the contributions are pre-tax contributions, so the withdrawals are subject to regular income taxes.
From an estate planning perspective, you never have to remove assets from a Roth individual retirement account, so you can let the balance grow untouched with your legacy in mind.
The Internal Revenue Service wants to be able to start collecting some money from traditional account holders eventually. As a result, you have to take mandatory minimum distributions when you are 72 if you have this type of account.
Your IRA can provide security if you use it wisely. We can gain an understanding of your position and help you maximize the utility of your individual retirement account or accounts.
Social Security and Medicare
You earn retirement credits when you pay FICA or self-employment taxes. The maximum annual accrual is four credits, and the income requirements are very modest, so most people accumulate four credits a year.
When you have 40 credits, you will qualify for Medicare and Social Security when you reach the respective eligibility ages. For Medicare, the eligibility age is 65 for all seniors that are eligible.
It is possible to accept an early Social Security benefit when you are as young as 62 years of age, but it would be reduced by between 25 and 30 percent depending on the year of your birth.
The age of full eligibility varies depending on your birth year. It is 66 for people that were born between 1943 and 1954. It then goes up by two months each year until it reaches 67 for qualified individuals that were born in 1960 or any later year.
A lot of people have questions about the optimal utilization of their Social Security benefits, and we can provide answers. Plus, there is a Medicare consideration that some people do not think about until it is too late.
Nursing Home Asset Protection
You should brace yourself for potential nursing home costs when you are developing your financial plan. Medicare does not pay for a stay in a nursing home, and it does not cover in-home care that is provided by a professional caregiver.
Long-term care is expensive, so nursing home costs can have a devastating impact on your legacy. Fortunately, there is a solution in the form of Medicaid eligibility.
This program does cover the custodial care that nursing homes provide, and there is a Medicaid Home and Community Based Services waiver that will pay for of in-home care. Of course, it is a need-based benefit, so you cannot qualify if you have more than $2000 in assets.
It is possible to convey assets into an irrevocable trust to develop a financial profile that will lead to Medicaid eligibility, but timing is key. There is a five-year look back period, so you have to fund the trust at least five years before you apply for coverage.
Estate Tax Efficiency
High net worth individuals have to be concerned about the potential ravages of the federal estate tax because it carries a 40 percent maximum rate. If you are exposed, we can help you implement an estate tax efficiency strategy that will mitigate the damage.
Take Action Today!
You cannot expect to be in a strong position in the future if you do not have a game plan. Financial planning is very important, and we are here to help if you are ready to develop a plan that will provide you with total peace of mind.
Our Memphis, Tennessee financial planning office can be reached at 901-763-2500, and the toll-free number is 866-997-6325 or fax us at (901) 763-2525. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.
