Boomers: Have You Planned for Retirement?

Boomers Have You Planned For RetirementCompared to retirees of just a generation ago, older Americans are staying in the workforce longer, and they’re returning to the workforce post-retirement in higher numbers, too. The shift began slowly in the late 1990’s when the labor force started to see an influx of post-retirees looking for work, but accelerated, in part, due to the recession of 2007. The ever increasing cost of living, combined with the negative impact the recession had on investments and home values, meant that SSI/SSD simply wasn’t enough to cover the bills. That left many retirees with no choice but to go back to work.

Though many retirees who were financially pressured to return to work were already receiving monthly social security insurance benefits, some may not have been aware that there were ways they could have increased the amount they received prior to retirement. Had they known, some may not have had to return to work, could have returned to work for a shorter period of time, or could have returned to work but worked fewer hours. If you are planning for retirement, here are a few tips you can use to ensure you receive the maximum SSI benefits available to you so you can avoid returning to work, if possible.

  • Make it Count: Start by confirming that your earnings are being properly reported so you’ll know the taxes that you’re paying into the system are being credited to you. A paystub will give you information, but only by downloading your earnings statement from the Social Security website can you verify that the information on the paystub was correctly reported. 
  • Claim Delay: This isn’t an attractive option, and for some it may be impossible. But, if you are able to delay claiming social security benefits until the age of 70, your SSI benefits will increase by 8 percent for each year you delay the claim after you reach full retirement age. 
  • 35 Years: Since SSI benefits are calculated using the beneficiaries highest 35 years of wages earned, you’ll want to make sure that you work for at least 35 years. Otherwise, zeroes will be averaged in, and that will lower your benefit amount. 
  • Claim Twice: Married couples who have reached retirement age can claim spousal benefits and then switch to payments using their individual work record (once they reach 70). That way, the benefits will increase because of the delay in claiming benefits until after the age of 70. 

Post-retirement Benefits

For anyone who is currently planning their retirement, but is unsure how their SSI benefits might be impacted if they do decide to continue working, the rules are pretty straightforward. As long as you work until full retirement age, you can still receive the full benefit amount to which you are entitled, no matter how much money you earn post-retirement. However, if you claim SSI benefits prior to reaching full retirement age, your benefits could be reduced, depending on your earned income.

The Social Security Administration also reviews the earnings of SSI recipients annually. So, if a beneficiary worked during the previous year and those earnings reflect one of his highest years, the SSI benefits will be recalculated to reflect an increase.

Just as with SSI recipients, if you receive SSD benefits, you can also work, but there are income and time limits. Whether you live in Reno, Rochester, or Raleigh, SSD terms are the same and, like SSI rules, they apply to everyone.

 

With so many older Americans working past retirement age, and returning to work once they have retired, it’s important to know where you stand with Social Security benefits. Educating yourself about the ways to maximize your monthly SSI payment may not completely eliminate your need to work, but you may be able to work less and for a shorter period of time, so you can finally enjoy your retirement once and for all.

 

 

Legal Issues with Family Finances

Imagine the following scenario, you are the parents of three children, a boy age 17 and two girls, ages 9 and 12. You have been meaning to attend to certain legal and financial issues regarding your family such as establishing a last will and testament. You may feel secure if you and your spouse have life insurance through your employer that amounts to around $500,000 in death benefit when either of you die, and you named as beneficiary each of your children in equal amounts (per stirpes).

Here is a summary of the worst case scenario in the event that both you and your spouse predecease your children before they reach the age of majority (which is 18 in in the United States). Your assets will not automatically pass to your three children if they are under the age of majority at the time of both of your deaths. What is worse is because no individual was appointed guardian of the children, a court would appoint what is known as a guardian ad litem to represent the best interests of the children.

Issues Arising From the Death of a Parent with Minor Children
As you can see, failure to address the issue of a will while alive forces the hand of the state to take action and appoint an individual to look after your children. Questions will arise from this scenario about the financial status of the estate left behind by the demise of you and your spouse.

When the joint deaths occurred (and we will set aside for a moment the issue of who died first) and no will was left behind, you are said to have died intestate, or without a will or a set of written instructions that determine the disposition of your estate, guardianship of the children, and settlement of your affairs. This invokes the involvement of the probate court to fix these matters, a process which could take some time. Consider the size of your estate and how likely it may be to cause disputes among members of your surviving family (i.e. parents, siblings, grandparents, etc.).

Simultaneous Death or Death Caused by a Common Disaster
Now back to the issue of who dies first. Under what is known as the Uniform Simultaneous Death Act, insurance contracts have what is known as the common disaster clause. If you and your wife were involved in an accident that resulted in your deaths, the determination (in the absence of clear evidence to the contrary) would be that you predeceased your spouse, meaning the proceeds of the insurance would go to your estate, not hers. Regardless of the relationship you have with the children you are raising from another marriage or her children from another marriage, if she were the primary beneficiary the proceeds would pass to her at the time of death.

What Can Be Done?
There is a common myth that estate planning is something only for wealthy people and a will is not necessary if there are not a lot of assets to distribute. If you own a home, participate in a retirement savings account like a 401(k) plan, and have money in the bank, you need to protect those assets for your surviving children in the event that simultaneous deaths were to occur. The effort to plan for the protection of your children and their financial interests cannot take place if you and your spouse are no longer around to protect them.

This article was written by Robert Tritter, an aspiring lawyer who looks forward to helping you understand legal issues better. He recommends taking a look at the finance jobs with moneyjobs.com if you’re interested in a career in finance. Check out their website today and see how they can help you!

Advantages and Disadvantages of Going Bankrupt

bankrupt

Believe it or not, people who go bankrupt do enjoy some advantages. Bankruptcy, in fact, exists so that people who make a mistake financially don’t have their entire life ruined for the rest of their existence. It gives people an opportunity to get a fresh start, to do things right and, after the bankruptcy has gotten off of their credit report, to start rebuilding their credit without having to repair a tremendous amount of damage that they may have caused in their youth. There are disadvantages to going bankrupt, as well, and you want to take these into account if you’re considering filing for bankruptcy.

Collectors Go Away

If you are considering filing bankruptcy, it’s likely that your phone is ringing off the hook with collection agents trying to get money out of you. One of the advantages of filing for bankruptcy is that you get a stay order against those collectors. Until your bankruptcy is resolved, those collectors cannot bother you about the bills you have with them without contacting the court first.

While this may seem like a small benefit from the outside, it is a huge benefit. It allows you to get time to consider your situation, to put together your bankruptcy claim and to not be constantly stressed by people who are reminding you incessantly of debt about which you are already well aware.

Keep Your Home

There are accommodations that allow people to stay in their homes if they declare bankruptcy. This can allow you time to get back in the good graces of your mortgage holder and ensure that you don’t end up out on the street. For some families, this is absolutely the best move possible.

Disadvantages

There are basically two types of bankruptcy that individuals can file for: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, all of the existing debt that you have is liquidated, except for those debts that are guaranteed. Student loans, for instance, do not go away. In a Chapter 13 bankruptcy, you still pay off your debts, but you pay them off through the courts at a rate that is affordable for you.

The disadvantage to both of these types of bankruptcy is that they do stay on your credit report. It can make it much more difficult for you to get lending and, in some cases, to even get an apartment. Compared to having your wages garnished to pay back credit cards with ridiculous interest rates or other unsecured debts, however, bankruptcy may actually be preferable.

Talking to an attorney who handles bankruptcy law is the best way to determine whether or not it’s time for you to go ahead and file bankruptcy.

What is Balance Billing…Are you a Victim?

balance billingJanet, a professional accountant, was suffering from severe pain in her wrists, suspecting she had carpal tunnel syndrome from her years of repetitive computer tasks.  With the recommendation of a friend, Janet found a surgeon who worked at the hospital in her insurance network.  After she met with the recommended surgeon, she was more confident and happy with him than other surgeons she had talked to.  After her successful surgery, Janet was able to return back to work sooner than she’d expected.  Pleased with her progress and fast healing, Janet was happy that she didn’t wait any longer to have her debilitating condition fixed.  About a month after her surgery, Janet had received bills in the mail to cover some costs of her surgery.  Janet was confused as she made sure she chose the right hospital in her network so that the surgery would be covered, in full, by her insurance.  Upon further investigation, Janet realized that the surgeon who performed the surgery was not part of her insurance network even though he worked in a hospital that was in her network.  The bill that Janet received is called balance billing and it occurs when a health care provider (in this case, Janet’s surgeon) tries to collect money directly from a patient after getting partial reimbursement from an insurance company.  Janet knows that “balance billing” is illegal for Medicare recipients, but she’s not sure if it is legal for her private insurance company. 

How to Avoid a “Balance Billing” Nightmare

If you have recently become a victim of balance billing, there may not be a lot you can do other than refuse to pay the bill or seek legal advice.  The best way to avoid balance billing is to work out all of the details before you are billed for a medical procedure, exam, or hospital stay.

–          Choose within Your Network:  Sometimes in the event of an emergency, it is not possible to be treated by a health provider in your network, but if you are in charge of choosing a physician or surgeon (for example), you should make sure they are in your network.  Even if they work in a facility that is in your network, the individual doctor may not be in the network.  While you may want to go with a doctor that you have heard so many good things about, make sure he/she is in your network otherwise you may have to prepare to pay out of pocket.

 

–          Verify the Person is in Your Network:  If you rely on the information that comes in your insurance packet, it may be incorrect or even outdated.  When choosing a medical professional, do not go by what you read or see in a book or on the internet.  Call the office and double check that he/she is part of your insurance network.  Failure to double check might leave you with an unexpected bill.

 

–          Don’t Fear Price Negotiation:  You may be forced to visit a specialist who is not in your network.  If this is the case, try to find out the bill for your procedure.  According to a patient advocate, Jane Cooper, after you find out how much your bill will be, check with your insurer to see how it matches with the out-of-network service pay.  A patient, who is prepared with this important information, may be able to negotiate successfully with a doctor.   If you are stuck with balance billing, try to negotiate a payment plan to keep your bill from heading to collections.  If you are able or need to, also consider talking with your insurance company to see if they will be willing to front some of the balance bill.

 

“Balance Billing” can be an unwelcome and financially frustrating surprise.  If you are recovering from an accident or a medical procedure, your focus should revolve around your healing not the overwhelming worry of how you’ll cover the bill.  The doctor’s may be in control of your health, don’t let them control your finances!

Protecting Your Assets During a Divorce

protect your assets divorceWhen John and Emily married 15 years ago, they both thought the marriage would last a lifetime.  After 10 years in a colonial-style home, 2 children and 3 dogs, their marriage looked picture perfect, especially with the white picket fence that surrounded Emily’s prize winning roses.  Last year, John lost some investments and started gambling to ease his stress.  His secret gambling made financial issues even worse.  Emily, unaware of their family’s financial distress, continued her duties as a homemaker and volunteering at her daughter’s school.  Had Emily known of the financial distress, she would have taken a job to help ease some of the debt, but because John was always in charge of finances, Emily had no idea of how bad their situation was.  One weekend, John had gone on a “business trip” (which ended up being an expensive trip to Las Vegas) and Emily was unable to withdraw funds from an ATM machine.  Shortly after John’s unsuccessful gambling trip, there marriage began to fall apart and divorce seemed to be the best option for their young children.  Because Emily has little control of their money, she doesn’t know how to proceed with protecting her assets during the divorce. Charles Ullman and Associates understands that during divorce, life has been turned upside down and can cause financial and emotionally challenging moments.  What can Emily do?

Avoid Losing Everything: Protect Your Assets

Often times, in a marriage, one spouse takes charge of finances. Unfortunately, in the event of divorce, the other spouse has no idea how to deal with their finances, leaving her/him at great risk for financial distress after a divorce.  Protecting your assets during divorce can make the whole process a little less stressful:

  • Familiarize Yourself with Financial Statements:  Financial statements, tax forms and other important financial paperwork can be overwhelming, hard to organize, and even harder to understand, but it’s helpful to know how your household’s income is being spent.  Even if you are not the “breadwinner”, you have the right to know where the money goes.  If you find something suspicious or something you don’t understand (and don’t feel comfortable confronting your soon-to-be ex), talk to a financial planner, lawyer or accountant.  Additionally, make sure you make copies of all the financial information and keep it in a safe place.  When you meet with your divorce lawyer, he/she will help you decide what information you will need for your settlement.  It’s better to be over prepared than not.

 

  • Establish Your Own Credit:  If you have a shared credit account with your spouse, it’s important to pay close attention to credit card statements, as one spouse may use a credit card more often than the other.  If your spouse has poor credit, it may affect you, even after the divorce.  If you are able, try to get your own credit card account before you divorce.  While may stay-at-home, non-income earning spouses find it difficult to establish credit, The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) made changes allowing non-working spouses set up their own line of credit, according to the Consumer Financial Protection Bureau.  Additionally, it may be wise (if you don’t already) to set up your own bank account.

 

  • Make Sure Your Name is One Everything You Own with Your Spouse:  Depending on what you purchased together, if it is a valuable asset, make sure that your signature (as proof of part ownership) is on all the proper documents.

Divorce can be a financially, emotionally, and mentally exhausting process.  While you should always have a good handle on your finances, even if you don’t make all the money, it is even more important during the separation or divorce process.  Don’t let your divorce leave you penniless and powerless; get your documents in order!

Injured On The Job? Workers Compensation Procedures

Most companies are required to maintain workers compensation coverage for their employees. Injuries, illnesses, or exposure to dangerous chemicals can make cause damage to an employee and lay the grounds for a workers’ compensation claim. The injuries covered under this policy can be minor or major. One are that is not covered under this general liability coverage is under the coming and going rule. This rule references any injuries that occurred on the commute to or from the work-site. Although these injuries would not be covered under a workers’ compensation claim, other injuries that occur while transporting goods, traveling, or running errands for your employer may be covered.

First Steps: File A Claim

The first step when you have been injured on the job is to file a workers compensation claim. Your supervisor or boss will provide you with the proper claim form to complete. If your employer contests the claim, a court hearing will be scheduled. It’s very important that you file your claim form as soon as possible after the injury. Some of the more long-term injuries from the incident may not appear until a few weeks or months after the initial accident, which is why it’s so important to have an attorney representing her interest in court. If you need an attorney, the time is now to contact Salvi Law.

What Happens Next?

After you have filed a claim, the insurance company will select a doctor to perform an independent medical examination. Preparing for this exam is incredibly important, since the doctor will send a report to the insurance company that is used to generate an offer for your compensation. Write notes about the appointment after it is over, and come prepared with your own list of questions for the doctor. Do not underestimate the severity of your symptoms during this appointment.

What Happens If My Claim Is Approved?

In general, the monetary payment under an approved workers compensation claim will represent up to 66% of your typical income, but what sets workers compensation apart is that these monies are tax-free. Since there are no taxes on these funds, it’s likely that your payment will be similar to your former income. All medical expenses will also be covered under a workers’ compensation claim, so long as those medical expenses are related to the workplace injury.

Should I Accept a Settlement?

If a worker has been on long-term disability for some time, one common tactic for companies is to offer that individual a settlement. In the short term, these settlements can be appealing. Over the long run, however, the settlement may not be in your best interest. For example, if your medical costs increase or you incur other complications as a result of your initial injury, the settlement may not be enough to provide for your future medical expenses. Especially when you are not represented by a lawyer, the company will usually undervalue the settlement offer. You can reject the settlement, and it’s recommended that you have a conversation with an attorney about your best options.

Talking finance – and inheritance: post from family lawyers

Guest post regarding finance and inheritance from family lawyers.

Financial conversations are important, but not easy. New research reveals not only the peace of mind created when parents and children discuss inheritance, care needs and retirement planning, but also the struggle to have the conversation in the first place.

According to an Intra- Family Generational Finance Study from Fidelity Investments, the fault lies on both sides. It reveals that while more than nine in 10 (94%) US adult children and their parents agree it is important to have frank conversations about wills and estate planning, care needs or covering retirement expenses, there are significant barriers to even starting these discussions within families.

Why people don’t talk

The top barrier, noted by 30% of parents, is they don’t want their adult children to overly rely on a potential inheritance. And for adult children, 40% say that the top barrier is that they feel it is none of their business to ask their parents about these topics.

The timing of these discussions is also a barrier, reveals the study. In fact, only one in three (34%) parents and their children agree on the best time. Parents are more likely to cite when they near or enter retirement (37%) as the right time, while children indicate that they’d like to have a conversation before their parents retire or have health issues (37%).

Financial miscommunication

Highlighting a vast disconnect between parents and children, the study reveals that 97% of parents and children disagree on whether a child will take care of his or her parents if they become ill.

Major miscommunication also exists when discussing inheritance and estate planning. In fact, children are underestimating the value of their parent’s estate by more than $100,000, on average. Additionally, neither side is effectively communicating about retirement readiness. As a result, one-quarter (24%) of children believe they will have to help their parents financially in retirement, while nearly all (97%) of parents say they will not need help.

The impact of the disconnect

The lack of discussion is having a big impact on families, according to Kathleen A. Murphy, president of Personal Investing at Fidelity Investments.

“Given the economic pressures facing families today, it’s troubling that detailed conversations are not happening, especially among those in the sandwich generation who may be grappling with competing financial priorities ranging from planning for their own retirement and paying for a child’s college education to dealing with eldercare, estate planning and retirement challenges with their parents,” she said.

“Whether it’s a parent facing a shortfall in retirement income or an adult child weighing the tax implications of an inheritance, too often discussing these issues is considered taboo within families, but real emotional and financial consequences emerge when such conversations don’t happen or lack sufficient depth,” she warned.

Benefits of talking about the future

According to Fidelity, conversations about estate planning have an overwhelmingly positive impact. The study found that the peace of mind of parents jumps from 61% to 91% when comparing those parents who have not had detailed conversations with their adult children versus those who have.

On top of this, parents who have had detailed conversations with their adult children feel significantly more at ease about their children’s financial future – 68% compared to only 30% among those who have not had detailed conversations.

This guest post is courtesy of Gibson Kerr Family Law Solicitors in Edinburgh: http://www.gibsonkerr.co.uk/. Contact Fiona Rasmusen and their other solicitors for expert family law and estate planning advice.