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7 Ways to Regain Control of Your Retirement

Retirement PlanningNo Comments

help button 150x150 7 Ways to Regain Control of Your RetirementIf you feel like you’ve lost control of your retirement before you even started it, you are not alone.  Here are 7 ways you can regain control of your retirement:

1.  Have a plan.  You need to know how much money you will need in retirement and then create a plan for saving or investing your way to that number.

2.  Have a Plan B.  Unfortunately, we are not always in control of our own destinies, especially when it comes to employment.  You need to consider different potential scenarios and create alternate plans for those.

3.  Know what you have.  Make a comprehensive list of all your assets – savings, investments, property, etc. – so you have a baseline for planning.

4.  Fully fund your retirement accounts.  Contribute the maximum each year to your retirement accounts.  If you’re over 50, take advantage of “catch-up” contributions that stretch the annual limits by $5,500 for 401(k)s and $1,000 for IRAs in 2014.

5.  Take calculated risks.  Being too cautious with investments after you retire could cost you.

6.  Don’t forget the fees.  Fees for managing your investments, including your 401(k), can take a chunk of change out of your nest egg over time.  Be sure you scrutinize these fees – which administrators are now bound by law to provide to you – and make any necessary changes if you find they are out of line.

7. Don’t count on home equity.  Although the housing marketing has improved significantly from the recession, financial experts caution homeowners against counting home equity into their net worth.  Instead, they say it should be viewed as insurance to shore up any shortfalls in retirement income projections.

To take control of your retirement, and the financial future of your family, contact our Orange County law firm.


Retirement Planning for Boomers: 5 Moves You Need to Make Now

Retirement PlanningNo Comments

retirement sign e1367526898975 Retirement Planning for Boomers: 5 Moves You Need to Make NowFor many baby boomers, retirement planning has been a bit of a roller coaster ride in the last few years.  First the recession slammed your nest egg, and then the bull market hopefully helped you fatten it up again.

But if you are nearing retirement, don’t rely on the vagaries of the stock market and the economy to determine your retirement lifestyle.  To get back on track with your retirement planning, you need to make these five moves now:

Make catch-up contributions.  If you are over 50, you are allowed to add an extra $5,500 to your 401(k) in 2014, in addition to the $17,500 limit.  For IRAs, you can add another $1,000 to the $5,500 annual limit.

Educate yourself on Social Security benefits.  You can check what your anticipated Social Security benefits will be online now using the Social Security Administration’s Retirement Estimator.  If you are married, you can optimize your benefits by having the highest wage earner delay taking benefits until full retirement age (66+) or, even better, at age 70.

Plan for retirement income.  Once you retire, you go from building your savings to managing it so it lasts through the rest of your life.  You may want to consider financial instruments like a fixed annuity to pay you income for life.

Spend less, save more.  Cut back as much as possible now and funnel those savings into your retirement savings.  You may also need to work longer than planned if you are still catching up.  If you are still working, increase your retirement plan contributions by one percent every year.

Get help.  Consult with an estate planning attorney and a financial advisor to review your investments and savings strategies to be sure you can meet your retirement goals.

If you need retirement planning expertise, contact our Orange County law firm.

7 Key Questions to Ask Your Aging Parents

Estate Planning, Retirement PlanningNo Comments

caregiver 150x150 7 Key Questions to Ask Your Aging ParentsMost of us spent the holidays with family members that we don’t see as often as we like or should, including aging parents.  Many Americans now live in different cities or towns from their parents, so can’t get real peace of mind by dropping in for a check on their health and happiness.

If you have not had a discussion with your aging parents about their finances, retirement and estate planning, consider beginning that important talk with these 7 key questions that you need the answers to:

1.  Have you made a will and, if so, has it been updated to reflect any changes since you made it?

2.  Do you have an estate plan in place?  Is a trust part of that plan?

3.  Have you created a written inventory of your assets and debts, a list of your bank and credit card accounts with passwords and other important financial data?  If so, where is that information being kept?

4.  Have you done any retirement planning?

5.  Have you reviewed your beneficiary designations for life insurance policies, retirement and investment accounts lately to be sure they are up to date?

6.  Is the executor of your estate fully informed on your last wishes?

7.  Have you executed an advance medical directive so your family is aware of your wishes for medical treatment in case you become incapacitated?  Do you have a Living Will that spells this out?

We can help you and your parents with estate planning and retirement planning strategies; contact our Newport Beach law office for more information.

Common Misunderstandings About IRAs

Retirement PlanningNo Comments

broken egg e1326911352154 Common Misunderstandings About IRAsEven the most savvy saver may fall victim to some of the common misconceptions about IRAs.  Arming yourself with the proper knowledge about how IRAs work will ensure you can protect and grow your retirement nest egg without incurring unnecessary taxes and expenses.

Here are some of the most common misunderstandings about IRAs and the straight scoop:

You need multiple IRA accounts.  Having multiple IRA accounts can merely complicate and confuse your financial picture.  You can contribute to the same IRA every year.

You can wait to fill out the beneficiary form.  The future of your retirement assets depend on how you fill out your beneficiary form, so don’t wait.  It’s simple and takes just a few minutes, yet its importance cannot be diminished as it governs how your IRA will eventually be taxed and passed on to heirs.

401(k)s are better than IRAs.  While the benefit of a workplace retirement plan can be great, the reality is that each employer treats their plans differently and your 401(k) plan may not offer as much flexibility as an IRA and may be more expensive in terms of administration fees.

You must take your required minimum distribution in cash.  If you own a traditional IRA, you will be required to take an annual minimum distribution when you reach the age of 70 1/2.  You can take it as cash, but you don’t have to – you can use in-kind security transfers, which don’t require you to incur a transaction cost or trade to rebalance your portfolio.

Rollovers are always best.  If you leave your employer, chances are you believe you should move your 401(k) into a rollover IRA.  This can be a good idea, but not always.  If a large portion of your 401(k) is in company stock that has appreciated, you lose the opportunity for a net unrealized appreciation tax break.

You can get a loan from your IRA.  Unlike 401(k)s, IRAs do not allow you to take out a loan against your account.  If you want to move money into another tax-advantaged account, you need to do a trustee-to-trustee transfer so you don’t incur a big tax bill.

Proper retirement planning can be a complicated process, but we can help.  Contact our Costa Mesa law firm for assistance.

5 Steps to Get Ready for Retirement

Retirement PlanningNo Comments

retirement new life sign e1388784629918 5 Steps to Get Ready for Retirement1. Start planning. When planning for retirement, boomers need to take a long view; many will live 25 or more years in retirement. You need to figure out how much you need and then what you have to do to get there.

2. Decide on what retirement means to you. Everyone’s retirement is different; some of us will work either full time or part time, and some of us just want to lie on the beach. You need to envision your retirement lifestyle, including what you will do, where you will live, how much you will travel and plan accordingly.

3. Manage debt. Carrying high interest debt into retirement is a sure way to deplete your savings. Reduce as much debt as possible prior to retirement, including credit card debt, mortgage debt and any student loan debt you may be carrying.

4. Get help. The help of a financial advisor and an estate planning attorney can be invaluable in planning for retirement. Having the right team that can give you financial and estate planning strategies to help you fund your retirement can save you plenty in the long run.

5. Expect the unexpected. Having an emergency fund of at least six months’ living expenses can provide the cushion you may need for unexpected events that could severely impact your finances. You also need to have the proper estate planning documents in place – a will, durable power of attorney, health care directive, etc. – so you and your family are fully protected.

If you need some help with retirement planning in 2014, contact our Newport Beach law firm.

3 Considerations for an Overseas Retirement

Retirement PlanningNo Comments

retirement sign e1367526898975 3 Considerations for an Overseas RetirementRetiring overseas has become increasingly popular as Americans try to stretch their retirement dollars as far as possible while still enjoying an active lifestyle.  In fact, it has been estimated that over a half million American retirees are currently enjoying the expatriate lifestyle in countries all over the world.

However, before you decide on an expat existence, you should discuss your plans with an estate planning attorney so you understand all the financial implications of your decision, including:

Taxes – the IRS allows Americans living overseas to exclude up to $97,600 of income earned abroad by using the Foreign Earned Income Exclusion (FEIE).  However, to qualify, you must have lived outside the U.S. for no less than 330 days in a 12-month period.  If you do not qualify for FEIE, you will still need to file and pay U.S. income taxes.

IRA Contributions – generally, once you move out of the country, you will not be allowed to contribute to an IRA since to do so, you must be earning taxable income.  If you apply for and claim a FIFE, you would not have taxable income so would be precluded from making contributions to an IRA or, in fact, most retirement accounts.

Social Security Benefits – living overseas will not stop you from receiving your Social Security benefits, but depending on what country you choose, it could be a hassle.  The government cannot send funds to some countries; in others, it may take up to four weeks for your check to clear.  Most expats get around this by keeping a U.S. bank account and accessing their funds via an ATM card.

If you’re planning to retire in 2014, contact our Newport Beach law firm for more information on retirement planning.

Steps That Baby Boomers Need To Take Now For Retirement Planning

Retirement PlanningNo Comments

retirement sign e1367526898975 Steps That Baby Boomers Need To Take Now For Retirement Planning1. Prioritize your own needs. Boomer parents are finding it increasingly difficult to put themselves first, ahead of their children’s financial and educational needs. However, there are other financial resources available for college educations, but not for retirement. Interest rates are at historic lows, and your children can take advantage of these without counting on you to bankrupt your retirement.

2. Plan to retire now. Early retirement planning provides you with some wiggle room if your financial picture changes dramatically prior to your actual retirement.

3. Ramp up your savings rate. Most of us have not saved what we should have in our early working years. Now that you are older and the children are gone, you may have the opportunity to catch up. Those over the age of 50 are allowed to make catch-up contributions to IRAs and 401(k)s.

4. Review your investments. Review your portfolio to be sure your investments are allocated properly as you near retirement and that fees associated with those investments are reasonable.

5. Look into long-term care insurance. It has been estimated that we will spend $240,000 during our retirement years on healthcare and medical expenses. If you can’t afford these on your own, you will want to consider purchasing long-term care insurance.

6. Create a comprehensive estate plan. A comprehensive estate plan will help you and your heirs protect assets and save time and money in costly probate proceedings. As you age, you will also want the protection of a durable power of attorney and an advance health care directive to ensure your financial and healthcare wishes are followed. Only a comprehensive estate plan can provide you and your family with these protections.

Contact our Newport Beach law firm to learn more about planning your retirement.

How to Keep Your Kids From Ruining Your Retirement

Retirement PlanningNo Comments

boomerang 150x150 How to Keep Your Kids From Ruining Your RetirementThey call it the “boomer boomerang” – adult children of retiring baby boomers who continue to rely on their parents for their financial needs.  Unfortunately, continuing to support grown children can have a significant detrimental effect on boomers’ savings and retirement plans.

To avoid having your adult children jeopardize your financial future, financial planners recommend the following:

No blank checks.  While you may be able to help your children out here and there, don’t make it a blank check.  Be sure you can pay your own bills before you cover theirs.

Establish limits.  Let your children know exactly how much you can comfortably provide, and set a time limit on when the support will stop.

No guilt.  Parents often feel guilty when they have to say no, but you must be honest with your adult children about how you are putting your own retirement at risk.

Reassess goals.  Reassess your own financial goals and develop a new financial plan to stick to them, even if that means cutting off the support at some time.

Make them accountable.  Make your children accountable for their finances; unless you do, they are liable to make the same mistakes over and over.

Of course, the best way to avoid having adult children depend upon you for financial help is to educate them when they’re young about the importance of saving and budgeting as well as self-reliance when it comes to paying their own way in life.

Contact our Costa Mesa law firm today for asset protection and estate planning strategies to meet your unique needs.

Should You Convert to a Roth IRA Before 2014?

Retirement PlanningNo Comments

ira e1346184593476 Should You Convert to a Roth IRA Before 2014?According to a recent Fidelity Investments report, Roth IRA conversions were up 12% in October over the same time last year.  Fidelity said the trend marks the growing awareness by investors about the benefits of converting from a traditional IRA to a Roth IRA.

So what are some of the benefits of a Roth IRA conversion?  Here are six:

  1. No income tax liability on the growth of the converted assets
  2. Reduction in required minimum distribution rate that kicks in at age 70 ½
  3. Opportunity to pay income tax on the conversion at a reduced rate
  4. Ability to take withdrawals without penalty as long as you are 59 ½ and meet the five-year and/or beneficiary Roth IRA rules
  5. Potential reduction in Social Security benefit taxation amounts
  6. Increase in potential future income tax planning opportunities

You should discuss the advantages and opportunities that a Roth IRA conversion offers with your retirement planning attorney.  Contact our Costa Mesa law firm for help.

How to Maximize the Value of Your Retirement Savings Before Year-End

Retirement PlanningNo Comments

golden eggs 150x150 How to Maximize the Value of Your Retirement Savings Before Year EndAssuming you would like to maximize the value of your retirement savings accounts – IRAs and 401(k)s – there are certain tasks you need to take care of before the end of 2013 and some that can wait until it’s time to file 2013 taxes in April:


December 31:  Max out your 401(k) contribution for the year — $17,500 for those under the age of 50 and $23,000 for those over 50.  If you are over the age of 70 ½, you must also take your required minimum distribution (RMD) by Dec. 31.  By year’s end, you should receive an annual statement outlining the fees you paid and comparing them to a benchmark – review that statement to ascertain whether or not you should alter your investment lineup.


December 31:  Those over the age of 70 ½ are required to take their required minimum distribution (RMD) by Dec. 31 – the penalty for failing to do so can be up to 50 percent of what should have been withdrawn.

April 15:  You can make 2013 IRA contributions up until April 15, 2014, but be sure to instruct your financial institution to record your contributions as 2013, not 2014, contributions.  The maximum contribution limit is $5,500 for those under the age of 50 and $6,500 for those 50+.

Contribution limits for IRAs and 401(k)s will remain the same in 2014 for workers under the age of 50.  Catch-up contributions for those over the age of 50 will also stay the same, at $5,500 for 401(k)s and $1,000 for IRAs.

For more retirement planning insights, contact our Newport Beach law firm.

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