Planned Life Changes in Lincoln, NE – 2018
While you won’t always be able to plan for everything in life, or have everything go according to plan, but nonetheless, in some instances at least having one is pretty important.
Take retirement for example. People have started to plan earlier and earlier, even in their 20s. And it takes quite a bit of money when all is said and done to live comfortably from retirement age to death, which in many cases could be more than 20 years. Living expenses, health care, traveling and bucket list items, and simply being able to do what you please and enjoy life during your golden years…it all adds up, and can quickly deplete your funds if you’re not careful.
“Retirement is a major life-changing event,” says Kevin Rademacher with SP Group, P.C. “It can be a scary or exciting time depending on how well you have planned and understand your options. Our clients are often concerned about how their income and taxes will look once they stop working. We can get a good idea by asking the right questions and reviewing their past and current income. Then we can run projections and provide examples of how their personal income and taxes will look in retirement.
Especially for a business owner, retirement planning can help ease the workload as we try to plan most efficiently for the future. Setting up the proper retirement plan can help reduce taxes and attract talent to your business.
We also help individuals who are closer to retirement by thinking about ways to reduce their taxes. Individuals with required minimum distributions or appreciated stock can use strategies involving charitable giving to lower their taxes. The new tax bill has changed how charitable giving has affected individual tax returns. By gifting the right amount through required minimum distributions or appreciated stock, you can take advantage of the new laws.
Business owners and individuals alike need to plan well in advance for retiring in the future. That being said, no matter how close you are to retirement, there is always a suitable plan that can be established. It’s important to utilize the correct retirement plan and determine the amount of savings needed to help plan for financial freedom in the future while managing taxes owed.”
He concludes, “Most people only think about retirement planning when a significant life event happens. It is important to routinely review your plans and try to understand all the changes that are happening with the new tax bill and potential future changes to the tax code. Find a trusted advisor or accountant who can help answer your questions and make sure you are working on building for your future. A good plan can help create a positive and exciting outlook for retirement.”
Speaking of business owners retiring, an exit strategy is also something you’ll want to plan for well in advance for the best outcome. We’ll be talking more about that in our Buying & Selling a Business feature story in the August issue, but in short, Jethro Hopkins with No Coast Business Advisors emphasizes its importance by stating, “Having an exit plan is essential. When you’re ready to retire is not the time to be scrambling to put this together either. You want to have everything in order at least 3-5 years prior to when you want to get out of the business.”
He further advises to consider the following: “In the event of your untimely passing, will your significant other, child(ren) or another family member take over, and are they prepared to do so? In the event of a partner’s passing, are you comfortable entering a partnership by default with their spouse, children, parents, or someone else who you may have never met, who may not even live here, or who might not be as invested, or knowledgeable at all for that matter, in the operation and success of your business? Everything that would happen in the event of the sale of the business, dissolution of partnership, death, etc. should be well documented, written into your operating agreement or articles of incorporation. Plan your exit, and your partner’s exit if applicable, as early on as possible – and specifically for partnerships, while you are on good terms.”
Moving on to other matters related to aging, planning for the later years of retirement will also involve future living and care arrangements, for yourself as the retiree or your parents, as well as estate planning.
As far as preparing for care, the results of the Office of Personnel Management’s 2017 Worklife Survey indicated that 17% of the DHS Workforce currently has eldercare responsibilities. And those 17% desire more support and resources for caregiving and finically planning for their aging loved ones. This figure is expected to double in the next 5 years. Employees who are also family caregivers have a departure rate of 40% from the workforce (who either voluntarily left their roles or were let go). The stress and time involved in caregiving can be overwhelming. “Families that plan ahead and allow home care to help result in more support, stress-reduction, better family dynamics, and more affordable options regarding long-term care,” says Andrew Carlson with Home Care Partners of Nebraska. “Caregiving provides seniors support in independent residences, assisted living, long-term care, hospice, or respite care. At Home Care Partners of Nebraska, we are dedicated to providing in-home personal services that improve quality of life and create peace of mind. As a family caregiver, you’re pulled in lots of directions, and Home Care Partners can help you find balance.”
He adds, “If you have any questions we encourage you to contact us, and you can even submit your own questions in advance on our website: www.homecarepartnersofnebraska.com. Many have asked for our insight and guidance regarding their Long-Term Care Policy. We are happy to review your policy with you at no cost, since there are a variety of policies available and each has different requirements. In the meantime, the following are tips that will help you understand your current policy:
Get a current statement of benefits. What you bought your policy for years ago may have a 3-5% escalation, so it is helpful to know what it is worth in 2018.
Is there an elimination period? Some have 90-120 days that you have to wait before they will pay out.
How many and which Activities of Daily Living do you need to be getting help with? (There are six basic ADLs: eating, bathing, getting dressed, toileting, transferring and continence.)
Home Care Partners can help you understand your benefits and if you can use your LTC as a payer source for your home care.”
Christine Vanderford with Vanderford Law further advises, “Most of us understand the importance of planning for the future. We save for retirement. We buy life insurance. We create college savings accounts for our children. While some things are easier or more enjoyable to plan for than others, it’s important to thoroughly cover all of the bases regardless. Seeking the assistance of professionals is the best and most cost-effective way in the long run when it comes to planning with respect to life changes.
What should the family do to better plan for the future? Seniors and their loved ones need to prepare a caregiving plan (including their estate plan) and regularly re-evaluate these plans. No one looks forward to implementing their caregiving plan; however, when a crisis occurs, it is much easier to take action with both blueprints in place.
All persons who have children under 19, married and/or single, who have assets collectively valued over $50,000, should seek the counsel of an attorney to prepare a last will and testament to provide direction as to who would be guardians over your minor children, and whether the assets would be held for your children’s care, or otherwise distributed to family, friends, and charitable interests. Additionally, any person over the age of 19 should have their own advanced health care directive, assigning who would be making health care decisions for you if you were incapacitated, as well as what your wishes are if you were to be in an irreversible persistent vegetative state. Very commonly people think their spouses automatically speak for them as their power of attorney. But not true, and especially if there are assets only in your name, or when it comes to gaining access to restricted/confidential medical information and your medical records, often needed to make competent decisions regarding your health care and rehabilitation. If you have not already begun, it is time to start thinking about what you will need from Medicare and Medicaid too. It is not a matter of if you will need it; it’s more a matter of when you will need it. Consider meeting with your estate planning attorney as well as your financial advisor to discuss the best plan for your long-term needs, and protection of your assets
A good estate planning attorney should make the estate plan process fairly smooth and painless, but it will likely require more than one conversation with your loved one and family members. It tends to be a process that takes place over a period of time, which is why it is never too early to start talking! The end goal is both a caregiving and estate plan that ensures all the wishes and needs of your loved one will be represented and respected.”
On a final note (no pun intended), if you’re in the market for life insurance for yourself, your spouse or your children, it’s never too early or even too late to purchase a policy. Kerry Butzke with Aflac advises, “We actually just came out with a new life insurance policy and rates. It’s not required to have any health screenings done, just provide answers to simple questions. Also, we have a guaranteed issue life insurance policy for businesses to offer to their employees employer-paid or with a percentage of participants in the group. Consider when planning that it is important to have life insurance from birth, but another essential time would be when buying a home.”
The future is full of uncertainty for us all, but planning can do a great deal of good in circumstances such as the ones we’ve covered. Do yourself a favor – seize the day and consult with the professionals to get your affairs in order.