Planning for Life

One Instance Not to Name Your Trust as Beneficiary of Your IRA

Posted by Harry S. Margolis on November 9, 2021

By Harry S. Margolis

Trusts-beneficiary-estate-planning-margolis-and-bloomThere are a lot of good reasons to name your trust as beneficiary or your retirement plan, whether a 401(k), 403(b), or IRA. Trusts provide for management of the IRA beneficiaries who are young, disabled, or for other reasons shouldn't be managing the asset themselves. People in a second marriage or relationship may want their spouse or partner to benefit from the funds, but not be able to deplete them entirely. And trusts provide creditor and protection.

However, the trust may not protect your retirement funds from your own creditors.

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Topics: Retirement Planning, creditor protection, IRA

Work Longer, Live Longer

Posted by Harry S. Margolis on September 22, 2021

By Harry S. Margolis

Retirement-margolis-bloom-d'agostino-estate planning

We've talked before about the financial benefits of working longer. They're pretty straightforward: the longer you work, the more money you can set aside for retirement and the fewer years you'll be drawing down your retirement income.

By way of example, for someone who can expect to live to age 85, if she retires at age 65 she'll be living off of her retirement savings for 20 years; if she retires at age 70, she'll have five more years to sock away money and will be drawing down her savings for just 15 years. (Of perhaps of even more importance, especially if she lives to 95 instead of 85, is the substantial increase in her Social Security benefit if she begins receiving it at age 70 instead of 65.)

Now comes a study that suggests that continued work can also enhance longevity. This has always been hard to establish because of the link between health and work. People who are healthier are both likely to work longer and live longer. It's impossible in the real world to do a standard research study of randomly assigning people to two groups, one group that retires early and one that retires late, and then study their health outcomes.

Real World Social Science Experiment

But sometimes the real world offers opportunities for researchers that they can't create on their own. This recently happened in the Netherlands which from 2009 to 2013 offered a tax credit to encourage citizens between the ages of 62 and 65 to keep working. This made it possible for social scientists to compare the work rates of people and longevity of Dutch men in this age cohort both before the tax incentive was offered and afterwards.

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Topics: Retirement Planning

Why Postponing Retirement Can Enhance Your Life

Posted by Harry S. Margolis on January 8, 2021

By Harry S. Margolis

There are many benefits to postponing retirement, including more retirement income and savings, and maintaining purpose and human contact in your life. It can also reduce the need to save, and thus the need to earn as much money. This can limit financial stress and open up opportunities for more meaningful work or to work less and spend more time doing whatever you choose, whether that's recreation, travel, or time with grandchildren.

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Topics: baby boomers, Retirement Planning

Can You Put a Retirement Plan in a Special Needs Trust?

Posted by Harry S. Margolis on December 19, 2020

By Harry S. Margolis

It's not unusual for parents of children with special needs, or individuals who have become disabled as adults, to have retirement plans as a significant portion of their assets. In such cases, the question arises as to whether they can put a retirement plan into a special needs trust. The answer, as with many legal questions, is "it depends." Also, the answer has changed significantly since passage of the SECURE Act at the end of 2019.

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Topics: special needs planning, Retirement Planning, Special Needs Trust

Why You Might Want a SECURE SNT

Posted by Harry S. Margolis on August 15, 2020

By Harry S. Margolis


As we've discussed before (here), the SECURE Act, passed at the end of 2019, changed a number of rules regarding inherited IRAs, making it more difficult to "stretch" them for most beneficiaries. However, an exception to the new rules could upend the advice we've often given clients doing special needs planning.

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Topics: special needs planning, Retirement Planning, Special Needs Trust

SECURE Act Complicated Things, CARES Act Further Changes IRA Withdrawal Rules

Posted by Harry S. Margolis on May 26, 2020

By Harry S. Margolis


As we explained in this post, the SECURE Act passed by Congress at the end of 2019 changed many of the longstanding rules around IRA withdrawals, eliminating the so-called "stretch" IRA for many beneficiaries and delaying required withdrawals to age 72 for those born after June 30, 1949.

New Rules Apply with passage of the CARES Act

As we've just begun getting used to these new rules, as part of the CARES Act (Coronavirus Aid, Relief and Economic Security Act), Congress made some other changes applicable only for this year. These include:

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Topics: Retirement Planning, Retirement Benefits, Required Minimum Distributions, IRA

3 Implications of the SECURE Act

Posted by Harry S. Margolis on January 14, 2020

By Harry S. Margolis


We reported on the SECURE Act when it was enacted at the end of 2019. (You can read about the rules it changed here.) Since then, we and other attorneys have been parsing it and learning a lot more about how its changes work and how they may affect clients. Here's some of our new learning:

1.  Estates in Progress May Want to Disclaim

Except for eligible beneficiaries (spouses, minor children, and disabled or chronically ill individuals), those inheriting IRAs from decedents dying this year and in the future will have to withdraw and pay taxes on the inherited accounts within 10 years from the year of the original owners death. Those who inherited IRAs from people dying before this year can continue to "stretch" out the distributions through their own lifetimes.

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Topics: Retirement Planning, Special Needs Trust, Retirement Benefits, SECURE Act

What the SECURE Act is All About

Posted by Harry S. Margolis on December 24, 2019

By Harry S. Margolis


At the end of 2019, Congress passed new rules governing retirement accounts known as the SECURE Act, an acronym standing for Setting Every Community Up for Retirement Enhancement. A big part of the bill encourages small employers to band together to offer retirement plans, which is the reason for the title. But here's what may affect you and your family:

  1. Later Required Beginning Age. For those who have not already reached age 70 1/2 by the end of 2019 (meaning they were born after June 30, 1949), they can delay taking their required minimum distributions until the April 1st of the year they reach 72, rather than 70 1/2. If you were born after June 30, 1949, you can still choose to withdraw without penalty, other than paying taxes on the amount withdrawn, any time after age 59 1/2, you just don't have to do so quite as early.
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Topics: Retirement Planning, Retirement Benefits

Not Enough Retirement Savings? You're Not Alone & It's Not Your Fault

Posted by Harry S. Margolis on August 20, 2019

By Harry S. Margolis


In her podcast series, Reset Retirement, New School of Social Research economics professor Teresa Ghilarducci interviews Baby Boomers and others about their retirement situations, which are mostly dire, and experts about why this is the case.

Very few workers today, other than public employees, have pension plans. Instead, except for Social Security, we are all dependent on our own savings. The result is that very few Baby Boomers have enough saved for retirement, with only 15 percent having more than $500,000 in savings according to the following chart:

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Topics: Retirement Planning

Risking Old Age in America

Posted by Harry S. Margolis on October 17, 2017

By Harry S. Margolis

Over 30 years ago, my father wrote a book titled Risking Old Age In America, which described the plight of seniors in the United States who faced severe income gaps, limited assistance for care at home, and deplorable nursing homes. A lot has changed since then, but many of the same challenges persist or have gotten worse.Risking-Old-Age-in-America-book-elder-law-attorney-Wellesley-MA

With the advent of the assisted living industry, there's an alternative to nursing homes. Home care services have expanded as has government assistance to pay for home care. Nursing homes have improved, and seniors enter them later in life when they need more care, meaning fewer are institutionalized for year after year.

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Topics: Retirement Planning

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