Every parent wants to teach their children fiscal responsibility, but it’s not always easy to impress upon live-for-the-now youngsters the concept of saving for a rainy day. Certainly teaching by example is one tried and true method; another is practice. But can a 15 to 21 year old really practice saving for retirement? Of course they can! And according to this article in the Washington Post, they can reap incredible benefits.

“Setting up a Roth individual retirement account for your teenager can be a smart and rewarding move to consider at tax time… It makes good sense to set aside money that can grow many times over by the time it is put to use. And establishing an IRA with a teenager’s own cash — perhaps supplemented by the parents or grandparents — can convey a powerful financial message that no pep talk could match.”

If you show your child or grandchild that setting up a Roth IRA is just another milestone—similar to graduation, getting a driver’s license, or getting a first part time job—the lesson comes through loud and clear that saving for the future is a natural and normal part of adulthood. In fact, the attainment of a first job can be the perfect instigating factor for setting up an account because “A Roth IRA can be opened only if the child has income from a job – and allowances don’t count.”

A Roth IRA can be a nice thing for a child to have for another reason… parents or grandparents can support and supplement the child’s investment with their own contributions as well. A retirement account may not be the most traditional of gifts, but it’s never too early to learn the value—and necessity—of saving for the future.

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Where you live is a defining aspect of your character throughout your life. Your “hometown” often plays a large part in the formation of your character; as adults we decorate our homes to reflect our interests, hobbies and loves; and the neighborhoods in which we choose to raise our children (city, farm, suburb) tell us a lot about our underlying values and where we feel safe and secure.

The idea that where you live is an important part of who you are doesn’t diminish as you get older—in fact, the longer you’ve lived in a place the more it seems to become a part of who you are, and vice-versa—so it’s no wonder that seniors are as choosy about where they live as any of the rest of us. What follows are some of the options for senior living arrangements. What you and your loved one will choose will depend on health, finances, community support, and of course—your family.

Most seniors would prefer to stay in the home they’ve known and loved. A senior or retirement community may look perfectly nice to a son or daughter; but mom or dad may see the retirement community as a first step toward losing their independence and being forgotten. Many senior citizens can stay in their homes for quite some time so long as they have the support of family and community and perhaps the help of an in-home caregiver.

Another option for housing is a senior or retirement community. These are often independent communities which provide age-segregated living opportunities for seniors who are still active. They usually provide social activities, regular transportation around town, and some personal care or nursing services. These communities can be the perfect solution for a still active senior who is unable to drive anymore, but be very cautious when choosing a community; with no regulation or governing body the non-social services they provide can be suspect.

A nursing home is the most drastic option for senior living, and is usually reserved for chronically ill people who need medical care and regulation in addition to help with the most basic of daily tasks. The decision to use a nursing home is a difficult and emotional one, and should not be put off to the last minute. Not only because nursing homes are expensive, and require as much advance financial planning as possible, but also because finding the right nursing facility for your loved one can take time.

Whatever housing option you are looking for, don’t be afraid to ask for professional help or advice. A Geriatric Care Manager, Elder Care Support Services, or an Estate Planning or Elder Law Attorney can help your family make and implement this tough decision.

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January of 2010 has brought with it a lot of change that is keeping financial and estate planners on their toes. In addition to the repeal of the estate tax (discussed in a previous post), we have been presented with new Roth IRA rollover rules that took effect January 1st, and which now allow anybody, regardless of income, to convert their traditional IRA to a Roth IRA. The question now is: Is it worth it?

The answer to that question will be different for everybody, because the amount that will be taxed upon conversion depends entirely on the kind of contributions you have made to your traditional IRA in the past. If you have made more non-deductible contributions than tax-deductible contributions to your traditional IRA you will almost definitely want to take advantage of the conversion opportunity. If you have made fewer non-deductible contributions you may be looking at a higher tax bill. However, the fact that the tax bill can be spread out over two years (but only if the conversion is made this year) should give even those who have made mainly tax-deductible contributions reason to consider the switch.

If you think you may want to make the switch, talk to your advisor. Your financial specialist can tell you the pros and cons of switching based on your personal IRA history. The nice part is that if you do decide to take advantage of the new rules, the decision doesn’t have to be permanent. Those who convert their traditional IRA to a Roth IRA in 2010 will have until October 15, 2011 to change their minds and switch the account back to a traditional IRA.

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One of the main concerns of anybody who is retired or nearing retirement is how to pay for medical expenses. Research shows that a healthy 65 year old couple can expect to pay somewhere around $305,000 in out of pocket medical expenses during the course of their retirement—and that’s a healthy couple! With expenses like this staring them in the face, it’s no wonder senior citizens are concerned about Medicare.

For those who don’t know, Medicare is a government administered insurance program providing health insurance coverage to people aged 65 and older, or to disabled persons who meet certain qualifications. The Medicare program has many parts which variably cover hospital insurance, medical insurance, and more recently, some prescription drug costs. The Medicare program has proven to be a valuable resource for senior citizens since it was signed into law in 1965, but the program is far from perfect or comprehensive. This, plus recent developments with the health care reform bill have many people asking questions about the future of health care insurance for retirees.

To help answer these growing concerns about health care costs and the Medicare program, Time Magazine has published a special article about how to navigate the Medicare maze. One of the most valuable portions of this article is “When—and How—to Enroll in Medicare”, but the article discusses other important issues such as:

• Medicare’s Part A, B, D and More
• How Medigap Policies Can Help
• When to Buy Long-Term-Care Insurance

Still, the best way to assure that you are getting the right medical coverage for yourself or your spouse during your retirement is to talk to a professional. Federal and State sponsored health insurance programs offer necessary help and coverage—but they can be fraught with confusing procedures and enrollment difficulties. Your estate planning or elder law attorney will be able to help you with the process. Don’t wait until it’s too late.

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Whether you’re just starting out on your own at the age of 18, or a 65 year old thinking about retirement, or anything in between, financial planning is essential. When most people think about financial planning they think about saving and investing, but a financial plan encompasses much more than that; it includes planning for taxes, charitable giving, gifts to children and grandchildren… and it includes protecting your current assets and planning your estate.

If you’re just starting out on your own your goals may be simple: establish your long term plan, purchase a home, and start putting a little bit away each month toward retirement. If you’re older and more established in your career and finances, your goals are likely much more complex: college for your kids, long term care insurance for you and your spouse, helping to care for your elderly parents, and protecting your assets from estate taxes.

For those who are just beginning to think about your financial futures, this article by Wesley E. Watkis shares 6 basic steps to creating a financial plan, and is a good introduction to the world of planning, saving and investing. Watkis writes that the first step to financial planning is establishing goals; knowing what you want your money to do for you in the years ahead is essential before you map out your plan of attack.

Of course, if you’re a more established adult what you will need is personal guidance in turning those initial goals into an effective plan, and then help maintaining that plan and growing your wealth. For that you will most likely need to find a financial planner whose expertise and philosophy fits your family’s needs, but finding the perfect financial guide for your family is not always as easy as you would hope.

A large part of planning your finances includes planning your estate, and vice-versa; and our firm works closely with many excellent financial professionals. Please don’t hesitate to call our office where we can work with you to assess your needs, and put you in touch with a qualified financial professional who can help your family safely plan for the future.

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Planning for retirement often requires a fine-tuned equation including such variables as where you plan to live, how many years you’ve worked and how much social security you can expect, health care expectations, long-term care, and especially your life expectancy. Well, part of that equation is about to change, because according to U.S. News and World Report the life expectancy in the United States has increased 1.4 years since 1997.

It may seem like a small change, but the article reminds us that when planning for retirement “it’s also important to note that many people live far longer than average and life expectancy increases every year.” And time is the great equalizer, it seems. The expectancy gap between the lifespan of men and women is closing, as is the gap between Caucasians and African Americans.

What this means is that if you planned for your retirement based on an equation from 10 years ago, you may need to revisit your plan with your financial advisor. “Most financial advisers recommend budgeting for at least 20 years of retirement and preferably 30 years in case you do live into your 90s.” Planning this way means you may end up with a surplus, but “it’s better to leave something behind for your children than to use up your entire savings and have no income outside of Social Security.”

And if you do think you may have a surplus to pass on to your children and grandchildren, our firm can help you protect your retirement income right now, AND for future generations.

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Many of our clients come to our firm not just for an estate plan, but as part of a larger goal to get serious about their finances and protect their assets and family. An estate plan is a HUGE step toward that goal, but it is only one step. Other steps include being proactive about your taxes, reviewing your investment portfolio, and creating a solid retirement plan.

Our firm can give you the very best estate planning and asset protection, but the other steps may require the help of a financial advisor. Each client’s situation is different, of course; you may already have a financial advisor and have taken these other steps (many of our clients are at our office on the advice of their financial advisor, in fact), but if you haven’t, finding an advisor you are comfortable with can be a challenge.

Because estate planning and financial planning go hand in hand, our firm has relationships with a number of top notch financial advisors, and we are happy to make the introductions. Having an estate planner and financial planner who are already acquainted can have many benefits. In addition to getting a referral from a source you already know and trust, you can be sure that any financial advisor we recommend has already been vetted, and all communication and collaboration between us for your benefit will be smooth and effortless. Don’t hesitate to call and take advantage of our experience.

If you still choose to search on your own, this article in The Wall Street Journal has suggestions on how to interview and choose the best financial advisor for your family. Either way, be aware of all the steps needed to reach your ultimate goal of financial security.

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If you have adult children then you know that it’s more than just credit limits and investment accounts that have been affected by the slow economy; companies also are tightening their belts, and people of all ages are finding it harder to get (or keep) jobs. As a result, more and more adult children have been moving back in with their parents.

Of course every parent wants to do what’s best for their child, but Ruth Mantell of the Wall Street Journal writes in her article that in this case, being tough may be what’s best. This isn’t to say that you should refuse if your out-of-work child comes to your door asking for help, but that parents or grandparents need to do what’s necessary to protect themselves before they welcome their adult children back home. “With job losses continuing to mount, older Americans’ wallets are being stretched by their own children,” Mantell writes, but having your adult children back in your home can actually be a good experience for all—if you know what to expect and take the right steps first.

In her article Mantell offers five useful tips to help keep the peace and keep your finances secure, including suggestions such as making sure everyone knows who is boss (you as the homeowner), asking for household contributions (even if all your children can afford is a token financial contribution or a contribution of manual labor), and especially preserving your retirement plans at all costs.

Although the practice has fallen out of style, multi-generational households used to be the norm. It may not be the ideal situation today, but with the right communication, and with everybody on the same page, temporarily sharing the house with your adult children can be an acceptable—and maybe even rewarding—experience.

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Many people come into our offices thinking that the estate plan we help them create will be quick, easy, and above all the end of the line. They hope that once this item is crossed off the to-do list they can breathe a sigh of relief and never think about it again. For some people this is exactly what happens, but others find that the creation of an estate plan serves as jumping off point for other important planning strategies: Retirement planning, investment planning, Medicaid planning and long-term care planning are all important issues every family will have to eventually consider.

Most of these issues are at least somewhat familiar, but long-term care still presents a number of questions for many people: What exactly is it? Will I need it? Who will provide it? And how will I pay for it? In an effort to shine some light on the still murky issue, the AARP has published an article that helps answer these questions in a clear and concise manner. The article also addresses issues such as the difference between public and private services, and when you may need to utilize one or the other.

Answering the difficult questions, however, is only the first step. “Using a combination of support—family and friends, community services, private funds, and government assistance, if necessary—provides a balanced approach to getting the help you need in the setting of your choice.” Once again, having a plan is essential to ensure that you retain control over your own finances and care far into the future.

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How often do you and your spouse talk about the financial aspect of your retirement? For that matter, how often do you talk about finances in general? New Research by Fidelity has found that an alarmingly high number of couples barely communicate about their finances at all. In fact, “only 15 percent of couples feel confident that both of them could assume responsibility for their joint finances if necessary”.

Retirement planning is one of the leading areas in which spouses have a failure to communicate, according to the research. After the recent market turmoil, people have new and greater concerns about their ability to retire comfortably, but they aren’t talking about it. And lack of communication means a lack of planning: “Although couples agree about their top financial concerns in retirement, they have not developed better planning habits. In fact, nearly 10 percent fewer couples report they had completed critical plans – be that a retirement plan, an estate plan, or a will — as compared to 2007.”

Although the temptation to bury your head in the sand may be strong, talking with your spouse—and then with a trusted professional—to create quality retirement and estate plans is essential, and will bring incredible comfort and security to you and the rest of your family. If talking about finances is not something that comes naturally to you and your spouse, a good way to get started is to make an appointment with a professional who can lead you through the process together.

Talking about money doesn’t have to be scary. Learning together and making plans for the future will not only strengthen your financial situation, it can also strengthen your relationship.

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