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Planning for Peak Earning Years

Serving Clients in the Five Boroughs and New Jersey


Are you between age 40 and 55? If so, then research shows that you are in your peak earning years and that is a very good thing.

Chances are good that you have some expensive life events going on right now. Do you have children who are college-bound or already there? Do you have a wedding scheduled (or one or more down the road)? Are you about to be grandparents? Perhaps you are beginning to help aging parents with personal, health care and financial responsibilities.

I know you may be busy but nevertheless, this would be a good time to create (or revisit) your estate plan and make sure you and those people who depend on you, such as your adult child(ren),grandchild(ren) or parents have their legal house in order, as well.

Unfortunately, many married couples believe that they can make decisions (whether personal, health-related or financial) for each other should either spouse become unable to do so due to a serious injury or illness. This is not always true! Without proper advance planning to appoint your spouse as your decision-maker, if you are unable to do so, he or she will not have legal authority to make even fundamental financial or health care decisions for you (or affecting both of you). For example, medical privacy laws will deny your spouse/partner access to your medical records and the ability to consult with your physician(s), financial laws limit control over your finances, and IRS regulations will prohibit filing a “legal” joint income tax return, just to name a few.

Unless you legally appoint the decision-maker of your own selection in advance through proper estate planning, then a court may need to select one for you. While the judge will likely appoint your spouse, the court process to accomplish this is long and expensive and can be a burden to your family.

Did you know that without having a plan in place, your assets may be distributed after death based on broad state laws written for people who do not have their own estate plan? Of course, this very impersonal estate plan written by state lawmakers will likely not reflect your own unique circumstances and objectives for your heirs or your spouse and assets. In fact, depending on how your assets are titled and how your beneficiary designations are arranged, you may disinherit your spouse or other important heirs.

Fortunately, we can help you avoid this probate process and replace that impersonal state-written estate plan with one we design together for your unique circumstances and objectives. We can even assist you with coordinating the beneficiary designations on your life insurance policy(s) and retirement plans with your estate plan in order to avoid unpleasant and unintended consequences. In addition, you may need to review your retirement plan beneficiaries and revise the appointments, considering the value of this asset and the underlying tax concerns for the named beneficiaries.

When it comes to your children, great care should be given to protect any inheritance both for them and from them. For starters, wealth representing a lifetime of your hard work and thrift can be squandered very quickly. In addition to good old-fashioned spending, an inheritance can quickly vanish through poor judgment, divorces, lawsuits, bankruptcies and catastrophic illness.

Fortunately, with proper (and very careful) estate planning, you can both honor your vows to your spouse/partner and provide an inheritance that is protected for your spouse for your own children or family members.

Are your parents already in or considering a transition to some form of long-term care? If yes, you will soon learn how expensive the continuum of care can be? From in-home assistance to assisted living to skilled nursing, the expenses can destroy savings and investments created over a lifetime of hard work and thrift.  You and your parents may need guidance to preserve their assets for yourself, your children and your aging parents.

Your peak earning years are the perfect time to lock-in a long-term care insurance policy(s) while you are still able to physically and mentally qualify. Some versions of coverage only pay if you need long-term care assistance, but others can now do double-duty and turn into life insurance if you do not need such assistance. That is a popular alternative to traditional long-term care insurance.  Our firm can help your select the type of policy to meet your needs and your budget.

There is a 70% risk of needing long-term care once you reach age 65. Curiously, 70% of people think they will not be among those 70% needing care (i.e., denial) and 70% of people think Medicare will pay for it! You do not want to be in that 70% who are in denial, misinformed or both.

These “peak” years are the perfect time to analyze your retirement planning and make the necessary changes to make sure your later years are both comfortable and financially viable.

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