Earlier this month, the Wall Street Journal reported that a number of large law firms are facing increasing pressure on their bottom line to support unfunded retirement plans for retired partners. And with the Baby Boomer generation the largest retirement population in history, there is now more financial pressure on younger attorneys who are seeing their paychecks threatened by pension payouts as well as lower fees.
The article noted that partners at many of these firms are often entitled to 20-30 percent of their peak pay after retirement – which could mean payments of as much as $400,000 to $600,000 annually. Law firms remain loyal to their pension plans because they say it breeds firm loyalty by retaining top talent and gives partners a sense of security.
Some firms have moved to cut their pension plans by shrinking benefit amounts or lowering the caps to match a percentage of firm profits. Some firms have established funded plans to pay for future benefits and provide individual retirement plans owned by individual attorneys.
Preserving and protecting and increasing assets during one’s lifetime, as well as planning for the orderly disposition of assets at death in the most tax advantaged manner, is the twofold focus of asset protection planning.
Lawyers and doctors are among a select group of professionals whose estate plans need to include strong asset protection strategies to protect personal assets against professional liability.
Contact us today and let our Newport Beach law firm help you with all your financial planning needs.