The Social Security Administration has finally gone online with earnings and benefits information for taxpayers, which is now available at www.ssa.gov/mystatement/.

To access your information, you’ll first need to register on the site, where you’ll be asked a series of security questions and answer multiple choice questions that make you aware how much the government really knows about you.

Once you register, you’ll be able to view your earnings history, which may be good for a laugh or two as you see what you earned your first few years of employment.  But there’s a serious side to checking this data as well.  If there are some earnings years missing from your record, you could get shortchanged on benefits – or worse, if inaccurate reporting has inflated your earnings, you could get stuck with a bill from Social Security.

The website also calculates your estimated benefits in three ways:  early retirement at 62, full retirement age and benefits if you wait until you turn 70.   You’ll be able to see clearly how waiting impacts your benefits – in most cases, taking early benefits can cost you up to one-third over your lifetime versus waiting until you reach full retirement age.

In determining the best time to take Social Security benefits, other factors carry weight as well, including your health (if you have a serious illness or a family history of short life expectancies, taking benefits early may be best), your marital status (delaying your benefits could boost your monthly income significantly and mean a larger survivor benefit for your spouse) and whether or not you plan to keep working and won’t need your benefits until much later.

An even better source of information could be a California estate planning attorney, who can help you with the big picture when it comes to retirement, not just one piece of the puzzle.

A report by Fidelity Investments released today projects that newly retired couples will need an estimated $240,000 to cover their health care costs throughout retirement, according to an Associated Press article.

The projections are based on a 65-year-old couple retiring in 2012 with Medicare coverage, with a life expectancy of 85 for the wife and 82 for the husband.  Fidelity recalculates the projections every year; this year’s projection of $240,000 is an increase of four percent, from $230,000 last year.  The company said that this year’s estimate could change significantly, depending on the upcoming Supreme Court decision on the 2010 health care law, which lowered the projections since it passed.

Fidelity also noted that for the long term, retirees’ cost savings from the 2010 health care law will not be enough to offset other factors that are driving health care expenses up, including new medical technologies, more diagnostic testing and greater use of health care services.

The Fidelity estimate does not include long-term care or dental costs.  Most people do not have significant enough assets to pay for long-term care for one or both spouses, but still have too much to qualify for Medicaid.   While you can “spend down” your assets five years before you anticipate needing Medicaid benefits to qualify, this goes against the grain for most people who have saved their whole lives.

California is one of several states that offers long-term care partnership programs that allow residents to purchase enough insurance to cover the assets you want to protect.  The California Partnership for Long-Term Care is an alliance between the State of California and a select group of private insurers that provides long-term health care policies that allow you to keep a dollar’s worth of assets for each dollar your partnership policy pays out for long-term care, thus enabling you to still maintain your ownership of your assets.  In effect, you purchase a partnership policy that is equal to the amount of asset protection you want.

A partnership policy also allows you to pass assets to a spouse, children or other family members because it exempts protected assets from Medi-Cal Estate Recovery.

You owe it to yourself and your family to consult with an Orange County estate planning attorney about partnership policies and planning for your health care needs during retirement.

A new study from Ameriprise Financial says that baby boomers are providing financial support for family members in spite of their own uncertain financial futures.

The Money Across Generations study found that boomers are getting squeezed from both ends — 93 percent have provided financial support to their adult children, and almost 60 percent have helped aging parents financially.  In addition, the study found that more than half have allowed their adult children to move back in with them rent-free.

Most boomers are failing to realize the impact all this financial support is having on their retirement goals, with only 10 percent reporting that helping parents has slowed down their retirement savings and 34 percent saying the same for helping adult children.

Ameriprise recommends that boomers ask themselves four questions before providing financial support to a family member:

1. Is this a want or a need? When it comes to living expenses, there is an important difference between a true need and a perceived need. If the expense isn’t a basic need, or if you’ve assisted with the same expense in the past, ask yourself if you are enabling irresponsible financial behavior.

2. Is this a loan or a gift? Consider whether your family member’s circumstances or past behavior indicate that they’ll actually be able to repay you. Also ask yourself whether you’ll be okay – financially and emotionally – if they don’t.

3. What are my motivations and expectations? Consider your own feelings and ask yourself if you’ll resent your decision – or your family member – in the future.  If your expectations aren’t met, will you be disappointed? If so, it may be better to say “no” than risk damaging your relationship.

4. Will this affect my own financial well-being? It’s crucial to take a look at your short- and long-term goals and ask yourself if you can really afford to help. It’s natural to want to provide support, but don’t let a struggling family member jeopardize your own financial security, especially if you’re approaching retirement. By prioritizing your own financial goals and stability, you may even have the ability to comfortably help family members in the future.

Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

The Social Security Trustees’ annual report released yesterday did not contain much good news for the those counting on Social Security benefits to live comfortably in retirement.  According to the report, the fund will be unable to pay full benefits beginning in 2033 – three years sooner than was projected in the same report last year.

For Medicare, the news was more dire: Medicare’s Hospital Insurance Trust Fund will have sufficient resources to maintain full benefits only until 2024, just a dozen years from now.

Social Security Administration Commissioner Michael Astrue was quick to point out that, “exhaustion is an actuarial term of art and it does not mean there will be no money left to pay any benefits. Come 2033, if Congress does nothing, there will be sufficient assets to pay 75% of the benefits.’’

Projections are based on economic assumptions and actuarial data, and are by no means cast in stone – however, what experts have gleaned from the report is that the funding shortfalls are real and measures need to be taken sooner rather than later to address them.

The bi-partisan solution from the Bowles-Simpson Commission in 2010 recommended that closing the gap could be achieved through increasing the amount of wages subject to Social Security tax, gradually increasing the age of full retirement for those born after 1960, cutting the annual cost of living increase to retirees by about 0.3 percentage points annually, and providing fewer benefits to the well-to-do.

While waiting for Congress to take action, the wise pre-retiree should take action by consulting with an estate planning attorney to develop a personal plan for a secure retirement, regardless of the presence – or absence – of Social Security benefits.

Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

New Book Helps You Plan for and Protect Your Assets

Orange County, California (March 29, 2012) – There are few things in life more certain than death and taxes and perhaps, in today’s society, Law suits.  However, the fact is few people actually plan for them. 

In the New Book The Ladder of Success: An Asset Protection Planning Primer, Attorney Jeffrey R. Matsen (“Top 100 Attorneys in U.S.” Worth Magazine) has provided a straightforward and elementary description of what Asset Protection really is and demonstrates how it can be effectively implemented by taking various steps, like rungs on a ladder, to truly climb the ladder of success.

“The one constant over the many years of my practice and among the hundreds of different clients I have served is the imbalance of, on the one hand, their profound concern regarding Asset Protection, and on the other, their lack of understanding as to how to implement it,” says Attorney Matsen. “I have dedicated my career to assisting these clients in planning the fortification of their resources to ensure their financial security in the face of taxes, liability and creditor attacks.” 

The Ladder of Success: An Asset Protection Planning Primer explains:

• Why Plan?  The Need for Asset Protection
• The Limitations
• The Operating Business Entity
• Basic Estate Planning
• Bankruptcy Considerations, Exemptions and Marital Planning
• Liability Protective Entities for Investment Assets
• Domestic Asset Protection Trusts and Modular Planning Utilizing LLCs
• The Offshore Asset Protection Trust and the Modular Planning that Accompanies It
• Advanced Estate Planning Techniques
• Special Issues and Strategies for Physicians and Dentists
• Climbing the Ladder and Putting It All Together

Chock full of authoritative information about estate planning and asset protection, The Ladder of Success: An Asset Protection Planning Primer is one book every conscientious person should own.  “Nobody understands the nuances and practicalities of this area better than Jeff Matsen.  His unique ability of making issues clear for clients and their advisors is a gift.  This book is required reading for any layperson or professional who wants to learn more about asset protection and more importantly, take action,” says Bill Deitch, Leading Estate Planning Attorney, Chicago.

“Jeff Matsen is an expert to the experts in the asset protection field.  Those seeking asset protection often share common characteristics—such as wealth, business ownership, real estate ownership, considerable income and estate tax exposures, as well professional practice ownership—and I recommend they read Jeff’s book to protect their families,” states Joseph J. Strazzeri, Fellow, Southern California Institute; Co-founder, Laureate Center for Wealth Advisors. 

Tim Voorhees, JD, MBA President, Family Office Services;  Principal, Matsen Voorhees, Orange County, CA. explains “Because of Jeff’s broad, multi-disciplinary experience, he knows how to integrate protection from lawsuits with protection from taxes. Jeff’s ability to combine creditor protection with tax planning helps clients accumulate more wealth and maximize upside potential.” 

“Jeff Matsen is one of the best estate planning and asset protection attorneys in the country.  His knowledge, wisdom and direct experience have truly made him one of the elite group of top experts in his field. If you are concerned about protecting your assets and want to leave a legacy for future generations, I highly recommend you read this book,” says Stephen Fairley, CEO of The Rainmaker Institute, LLC, The Nation’s Largest Law Firm Marketing Company. 

 Marc Selden, Nationally Recognized Estate Planning Attorney, New York City, states “Jeff is widely recognized in the legal community as an asset protection guru.  In this book, Jeff does a wonderful job of explaining the principles and strategies of complex asset protection planning in a very clear and easy-to-understand way.”

The Ladder of Success: An Asset Protection Planning Primer,  $19.95, Paperback 179 pages, ISBN 978-0-9852041-1-2, is published by Wealth Strategies Counsel, and is available by calling 714-384-6527 or by visiting www.matsenvoorhees.com/book .

ABOUT  JEFFREY R. MATSEN

JEFFREY R. MATSEN, JD, received his law degree with honors from the UCLA School of Law and served as a Military Judge with the rank of Captain in the US Marine Corps.  Matsen has been a Professor of Law in Business, Estate Planning and Advanced Taxation. He is a highly sought-after and respected speaker and educator and has published numerous legal articles.  Matsen is the founder of “Wealth Strategies Counsel,” the Estate Planning and Business Transactions Department of Matsen Voorhees and Bohm, Matsen, Kegel & Aguilera, LLP, in Orange County, California.  His practice areas include: Business and Estate Planning, Asset Protection, Probate and Trust administration and litigation, Real Estate and Offshore structures.  Matsen has been designated one of the Nation’s “Top 100 Attorneys” by Worth Magazine, A “Super Lawyer” by Los Angeles Magazine and he is listed in The Best Lawyers in America.  The Nationally Renowned Attorney Rating Service, AVVO, has rated Matsen a perfect “10/10 Superb.” Besides continuing to achieve the highest “AV rating,” he has been designated a “Preeminent Lawyer” by the prestigious attorney rating directory, Martindale Hubble.

A story yesterday in USA TODAY reported that as America’s largest demographic reaches the age when they need long-term care insurance, the market for that insurance is shrinking and the cost is growing.

Earlier this month, Prudential Financial – a top five provider –announced that they would exit the long-term care insurance market.  USA TODAY reports that with their exit, 10 of the top 20 long-term care insurance providers are out of the market.

As the marketplace shrinks, prices are rising.  Long-term care insurance premiums are now six to 17 percent higher than last year, according to the American Association for Long-Term Insurance.

Many people don’t like long-term care insurance since if you never use it, you lose the money you put into it.  This has led to a growing market for “hybrid” policies that require a large one-time payment, which can then either be used for long-term care or a life insurance benefit.  Although not everyone can afford to sink a big chunk of change into a hybrid policy, a New York Life Insurance spokesman said the sales of its hybrid Asset Preserver policy have risen steadily over the past three years.

In addition, Californians have access to a long-term care partnership program that allows residents to purchase enough insurance to cover the assets they want to protect.  The California Partnership for Long-Term Care is an alliance between the State of California and a select group of private insurers that provides long-term health care policies to allow you to keep a dollar’s worth of assets for each dollar your partnership policy pays out for long-term care, thus enabling you to still maintain your ownership of your assets.  In effect, you purchase a partnership policy that is equal to the amount of asset protection you want.

A partnership policy also allows you to pass assets to a spouse, children or other family members because it exempts protected assets from Medi-Cal Estate Recovery.

If you are concerned about long-term care costs, consult with an Orange County estate planning attorney about partnership policies and the asset protection these long-term care policies provide.

For those who turned 70 ½ during 2011, March 30 is the deadline for taking the mandatory required minimum withdrawal from their IRAs and all employer-sponsored retirement plans, including 401(k)s.  RMD rules do not apply to Roth IRAs if the owner is still living.  The deadline has historically been April 1, but since that date falls on a weekend this year, the deadline is now this coming Friday.

The required minimum withdrawal (RMD) is calculated by an IRS table based on age, life expectancy and account balance.  Here is the table:

If you are married to someone who is younger than you by 10 years or more, then you can use your joint life expectancy to figure your RMD.

This is the last time anyone who turns 70 ½ in the prior year has an extra three months to take their RMD; in 2012 – and beyond – you must take the RMD by Dec. 31 of the same year you turned 70 ½.  If you fail to do so, you could face a heavy penalty of up to half of the amount you should have withdrawn.

For those who didn’t want or need the extra taxable income, an IRA charitable rollover was a common estate planning strategy.  However, Congress did not extend the IRA charitable rollover into 2012, so unless it reinstates the rule retroactively for 2012, this strategy can no longer be used to remove taxable income in 2012.

Our Newport Beach estate planning and asset protection law firm has been helping California families protect and grow their assets for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

A recent Forbes article noted that couples with significant age gaps – 10 years or more – need to understand and employ different retirement planning strategies that may benefit them specifically because of their age difference.  These include:

Taking advantage of qualified retirement plans – if you have a 401(k), IRA or other qualified retirement plan, you will be required to take minimum distributions at age 70 ½.  Those with spouses who are younger by 10 years or more can take a smaller distribution, which reduces their taxable income.

Deferring Social Security benefits – couples with significant age gaps should defer Social Security for the older spouse as long as possible, which will allow the younger spouse to collect spousal or survivor benefits longer and provide larger payments.

Maximizing pensions – the older spouse elects the single life pension option and the couple uses the extra income to fund a life insurance policy on the older spouse that the younger spouse will use later to fund his or her retirement.

Our Newport Beach estate planning and asset protection law firm has been helping California families protect and grow their assets for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

According to 2010 U.S. Census figures, unmarried couples comprise 12 percent of U. S. couples, a 25 percent increase in just one decade.  When it comes to retirement benefits, couples that are not married can use estate planning to ensure partners receive benefits and avoid taxes as follows:

Beneficiary Designations.  Listing your partner as beneficiary on the formal beneficiary designation forms for retirement accounts will ensure that partner receives those benefits.  Beneficiary forms must be kept up to date, as they take precedence over a will in determining who will receive retirement assets.  The same holds true for life insurance policies.

Rollovers and Distributions.  Unfortunately, many companies do not allow an unmarried partner to roll over a deceased partner’s retirement plan assets into an IRA.  Instead, they may require the surviving partner to take a lump sum distribution of the entire amount, which can carry a heavy tax burden.  When you leave your company, consider rolling over your retirement account into an IRA and name your partner as beneficiary.

Inherited Roth IRA.  The Pension Protection Act of 2006 made it possible for unmarried participants to roll over inherited retirement plan assets into an inherited Roth IRA, if the employer plan allows it.  A direct transfer is necessary in order for the partner beneficiary to take advantage of the Roth IRA, either via direct rollover or trustee-to-trustee transfer.  The beneficiary will have to pay taxes on the distribution upfront as well.

Our California asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and retirement planning for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

Although 2012 is a Leap Year, when it comes to retirement there are ways to ease into it rather than taking one giant leap.  In fact, due to the economic downturn of the last few years, a majority of Baby Boomers are finding it necessary to stage their retirement plan in order to compensate for lost investments or income.

Here are some ways to ease yourself into retirement:

Revise your work schedule.  Does your employer offer a phased retirement schedule for older workers?  Your employer’s human resources manager can explain what might be available to you.

Restructure your pay.  Since less hours usually means less pay, you should consult with your California estate planning attorney to see how a salary cut could impact the retirement lifestyle you want.

Review pensions.  Make sure that reducing your work schedule will not adversely impact your pension.

Check health insurance.  If you work part-time, will you still be covered by your employer’s health insurance policy?  This could be a problem if you do not qualify for Medicare yet.

Review Social Security options.  Some of your Social Security benefits can be withheld if you still work and earn too much.

Contact our California asset protection and estate planning law firm for the individual attention you need in creating an estate plan for your retirement.