Many people are surprised to learn that their Social Security benefits can be subject to federal taxation. Whether your benefits are taxed depends on what is known as your “provisional income.” This is your adjusted gross income (not counting Social Security benefits) plus nontaxable interest and half of your Social Security benefits.

For people filing as individuals or heads of households with provisional incomes of less than $25,000, Social Security benefits are not taxed. For couples filing joint returns, the figure is $32,000. Unfortunately, individuals with provisional income of between $25,000 and $34,000, or couples filing jointly with provisional income of between $32,000 and $44,000, up to 50% of Social Security benefits may be taxable. In the case of individual filers with provisional incomes above $34,000 or joint filers whose provisional incomes exceed $44,000, up to 85% of Social Security benefits may be subject to taxation.

The information above concerns federal taxes. 13 states levy their own taxes on Social Security income, although they do so in varying degrees. These states are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, North Dakota, Vermont, Utah, and West Virginia. (Taxation of Social Security benefits is being phased out in West Virginia. Most residents won’t be taxed on their benefits as of the 2021 tax year.)

An article on kiplinger.com offers some strategies to avoid, or at least mitigate, taxes on Social Security benefits.

Withdraw money from your tax-free Roth IRAs

Tax-free withdrawals from a Roth IRA or Roth 401(k) are not included in your adjusted gross income. Rolling over money from your traditional IRA or 401(k) to a Roth IRA years before you start receiving Social Security benefits is an excellent way to avoid taxes later in retirement. Of course, you will have to pay income taxes when you make the conversion, but you can tap the account tax-free after that.

Purchase a Qualified Longevity Annuity Contract

You can invest up to $130,000 from your IRA or 401(k) in a deferred-income annuity called a Qualified Longevity Annuity Contract (QLAC). The money in your QLAC is ignored when figuring your required minimum distribution, so you can reduce the size of your distribution, lower your income and cut your tax bill.

Give your required minimum distribution to charity

If you are 70½ or older, you can give up to $100,000 per year to charity from your IRAs tax-free.

Your gift counts as the required minimum distribution but is not included in your adjusted gross

income.

Be careful with income investments

You can structure your portfolio to minimize the income it generates. This approach makes particular sense if your portfolio’s income is being reinvested.

Save money, use financial strategies, and get help from Washington Elder Law.

Your best option is attending two helpful workshops provided by the Edmonds Elder Law team, at Washington Elder Law. The workshops are online, and they are free. Advice is offered for seniors and their families. We answer your questions about how to refrain from paying taxes on your income. Find out how you can avoid the Washington State long-term care tax.

We tell you how to access the funds provided by the state of Washington. We prepare the documents you require to receive benefits. Then, we follow through with the documents to make sure your information is complete.

Benefits available in King County are over $9,000 a month if you know how to access them. We can access these benefits for most people. Find out how you can maximize your money and pass it down.

We teach families how to access Medicaid benefits to pay for medical and long-term care costs while preserving their wealth.

Washington Elder Law workshops include:

Medicaid – Medicaid planning helps pay for long-term care. It is a federally funded health insurance program based on income. Even if you make more than the exceeded amount, you still may qualify. We can help you understand possible exceptions and discover the aid you require.

Estate Planning – You want to protect the legacy that goes to your family. Without proper estate planning, money is often collected and distributed to the government. We teach you how to maximize the money you have. We make sure you have Power of Attorney to avoid losing control of guardianships. You’ll learn how to protect your assets from the government. We will even show you how to receive a higher quality of long-term care. All of these very important financial choices are available to you. Attend our free workshops to find out more.

Thanks to improvements in medical science and healthier lifestyles, Americans are living longer than ever before. Unfortunately, many of us will require long-term care at some point in our lives, and one in five of us will require long-term care for at least five years.

According to Genworth Financial, the median cost of long-term care nationwide ranged from $51,480 to $102,200 per year in 2019, depending on the type of care needed. (Care costs also vary widely based on where you live. To see the cost of care in your area, visit https://www.genworth.com/about-us/industry-expertise/cost-of-care.html.)

A current study reports that King County residents pay over $10,000 a month in long-term care expenses. 98% of the population are concerned about running out of money when a family member needs extending medical care or services.

Long-Term Care (LTC) Costs

Stay home ($500 – $18,000/month)
Assisted living ($2,500 – $5,500/month)
Nursing Home ($9000 – $14,000/month)

The median cost of in-home care provided by a home health aide was more than $52,000 in 2019, while care in a nursing home can easily top $100,000 per year. Worse, experts predict that the cost of nursing home care will more than double over the next twenty years. Tragically, many families exhaust their life savings within a few years of a family member entering a nursing home.

Ready for some good news? Through proper planning, you can protect your hard-earned assets against the cost of long-term care. You can also receive assistance from Medicaid and other sources to cover the cost of your care, even if you or a loved one is already in a nursing home.

Long Term Care Planning Options

Long-term care insurance

Many families consider purchasing long-term care insurance in advance to help pay for long-term care in the future. However, this type of insurance can be expensive. Typically, the younger you are when you apply for coverage, the cheaper your policy. Of course, the benefits of the lower premium must be factored against the amount of time a younger person will likely continue to pay premiums without requiring long-term care. Similarly, you can reduce the cost of your policy by choosing a longer waiting period. But a longer waiting period means you’ll need to pay the bills yourself before you receive any benefits. Most people interested in purchasing long-term care insurance should consider a 60-day or 90-day waiting period, which keeps premiums manageable but limits out-of-pocket costs. It is important to note that if you wait too long to apply for coverage or until you have developed medical problems, you may not be able to qualify for a policy at all.

Reverse mortgages

A reverse mortgage is a special type of home equity loan that allows you to receive cash against the value of your home without selling it. You can choose to receive a lump-sum payment, a monthly payment, or a line of credit. In the case of monthly payments, as long as you spend the payments you receive in the month that you receive them, the money is not taxable and does not count towards income or affect Social Security or Medicare benefits, nor does it count as income with respect to Medicaid eligibility. There are no restrictions on how you use the money, and you can continue to live in the home while retaining title and ownership of it. The amount of the loan does not become due until the last borrower, usually the last remaining spouse, dies, sells, or permanently moves out of the home. If your heirs want to keep the home, they can repay the reverse mortgage. They can also keep the difference if the home’s sale price is greater than the reverse mortgage loan balance when they repay the loan.

Life insurance

Some insurance companies have begun to offer life insurance policies that can help pay for long-term care services. The options include combination life/long-term care products, accelerated death benefits, life settlements, and viatical settlements. Combination products are relatively new, and the features change constantly as the products evolve.

Annuities

You may choose to enter into an annuity contract with an insurance company to help pay for long-term care services. In exchange for a single payment or a series of payments, the insurance company will send you an annuity, which is a series of regular payments over a specified and defined period of time. There are two types of annuities, Immediate Annuities and Deferred Long-term Care Annuities.

You can learn more about long-term care insurance, reverse mortgages, life insurance, and annuities by visiting the government’s long-term care website, http://longtermcare.gov. If you are thinking about using one or more of these options, please contact us first. They may not be the best approach in your particular situation.

Obtaining Assistance from Medicaid

It is estimated that in the United States 60 percent of nursing home residents rely on Medicaid to finance their nursing home care. Even so, many families do not try to obtain such assistance because they believe they have too many assets or too much income to qualify. Others simply give assets away in the hope of becoming eligible. While you are certainly free to give away anything you want, doing so improperly can make you ineligible to receive Medicaid assistance for months, even years.

Fortunately, it is possible to protect your assets and receive the assistance you need with proper planning. We can use a wide range of tools and strategies to structure your estate in such a way that you will meet the government’s asset and income requirements. These tools and strategies include exemption planning, strategic gifting, irrevocable trust development, and more.

What If You Are Already in a Nursing Home?

Perhaps you or a loved one is already in a nursing home or must enter one very soon, and you have been told that you own too many assets to qualify for assistance from Medicaid. Do not give up. This situation, known as a Medicaid crisis, is more common than you might think. The information provided to you by friends, nursing home intake staff, and even social workers may very well be outdated or simply inaccurate. You are not alone during this difficult time. We may still be able to protect your assets for yourself, your spouse, and your heirs while at the same time obtaining assistance from Medicaid to pay for your nursing home care.

Washington Elder Law helps you manage the high cost of long-term care.

Benefits available in King County are over $9,000 a month if you know how to access them. We can access these benefits for most people. Find out how you can maximize your money and pass it down.

We show you how to protect your money with two online workshops. The workshops are free, and best of all, you learn from home.

Our workshops include:

Medicaid

Medicaid planning helps pay for long-term care. Learn how to access your benefits.

Teach you some easy Medicaid definitions
Help you learn about coverage and eligibility
Let you know the advantages of a Medicaid Trust
Offer ways to get help with your application
Let you know what Washington Elder Law offers

Estate Planning

You want to protect the legacy that goes to your family. Without proper estate planning, money is collected and distributed to the government. We teach you how to maximize the money you have. We make sure you have Power of Attorney to avoid losing control of guardianships. Learn how to protect your assets from the government.

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government

For more information and to register for workshops:

Medicaid Workshop

Estate Planning Workshop

Perhaps you have considered selling your current home, buying a smaller one, and using the difference to help fund your retirement. A recent article on Investopedia.com explores this approach and details the mistakes you must avoid. Here are some of the highlights.

Overestimating Your Current Home's Value

Many people overestimate how much their current home is actually worth because of what friends and neighbors say they received for the sale of their homes. To get a realistic sense of your home’s value, visit websites like Zillow.com and Realtor.com to learn the prices of recently sold properties in your area. Online “estimators” from banks like JP Morgan Chase and Bank of America will also provide useful information. Bear in mind that prices and estimates shown on these and other sites may not take into account the specific features sought by prospective buyers. Consulting local real estate agents or independent appraisers can address this problem. You should also ask these real estate professionals about inexpensive spruce-ups that will increase your home’s curb appeal and value. Most experts agree that the cost of major renovations will not be recouped unless your home is in extremely poor condition.

Underestimating the Cost of Your New Home

You can use the online tools and real estate professionals mentioned above to get a sense of what you’ll have to pay for the type of home you want to buy. If you plan to move to a new area, such as a place you’ve always enjoyed visiting, it’s important to spend a significant amount of time there. This will give you a feel for what it’s like to actually live in the area. Renting a property for a year or so before buying may be the wisest approach.

Ignoring the Tax Implications of Your Move

Most couples are currently able to exclude up to $500,000 in gains from the sale of their home, while singles can typically exclude up to $250,000. Your tax bracket and the length of time you’ve lived in your current home could impact whether taxes will be due upon its sale. You can find detailed information about this issue in IRS Publication 523.

You should also consider factors beyond income taxes on your home’s sale, particularly if you are moving to a different state. Lower property taxes in your desired destination could be offset by higher sales and income taxes. Similarly, pensions and withdrawals from retirement accounts could be taxed at a higher rate than where you live now. A particular state’s revenue or tax department website is a good source for this important information.

Ignoring Closing Costs

If you haven’t bought or sold a home in quite a while, you may have forgotten about all of the closing costs involved. Title insurance, recording fees, legal fees… the list of miscellaneous charges can seem endless. In addition, if you use a real estate agent, commissions can be as high as 6%, according to Realtor.com. In addition, don’t forget about the cost of moving your belongings to your new home.

The bottom line is this: Do your research and run the numbers carefully before downsizing. You may find ways to save a significant amount of money on your move, or perhaps you’ll realize that you should stay where you are for now.

What to do next…

Now that you or a loved one has chosen to retire, managing your/their finances is mandatory. We help you with retirement, Medicaid, and long-term care planning.

Washington Elder Law, PLLC, is dedicated to providing our clients peace of mind.

There are two easy steps that you need to plan your retirement finances. We will show you the way.

1.) An easy way to start is by downloading our complimentary guide—Understanding Medicaid.

Our FREE Report Reveals the Steps You Should be Taking Right Now to Protect Your Hard-Earned Savings and Provide the Best Possible Care for Your Loved Ones.

2.) Register for our free Medicaid online workshop. Our workshops teach you how to access your Medicaid benefits to pay for medical and long-term care costs.

Washington Elder Law provides the #1 Medicaid services in Snohomish and King Counties.

We create the documents that enable you to receive maximum benefits.
We show you how to decrease your income tax on inherited retirement accounts and other assets.
Provide families with peace of mind.
Design plans that protect you.
We follow through on all items required for families to receive benefits.

One of the first questions many clients ask is whether they need a Revocable Living Trust? It’s a great question, but it leads to another: What do you want your plan to accomplish? Let’s begin with a brief discussion of what trusts are and how they work. Then we’ll explore their benefits, which should give you a better idea of whether a trust is right for you and your family.

What is a Revocable Living Trust?

There are many different types of trusts and they can accomplish a wide range of goals. However, when most people think about trusts, the one they have in mind is a Revocable Living Trust.

A Revocable Living Trust is a legal document that allows the grantor (the person who creates the trust) to take personal assets and transfer them to the ownership of the trust. While the trust technically owns the assets, the grantor can continue to use them as he or she normally would.

When a Revocable Living Trust is established, the grantor names a trustee to manage the assets in the trust during the grantor’s lifetime. Most grantor’s name themselves as trustee, giving them complete control over the trust’s assets. Typically, a successor trustee is also named to take over management of the trust and distribute trust assets after the grantor passes away.

What are the benefits of a Revocable Living Trust?

One of the primary benefits of a Revocable Living Trust is that it enables assets held in the trust to avoid probate after the grantor’s death. This allows trust assets to be distributed to heirs quickly. The costs associated with probating the estate are also avoided. In addition, a Revocable Living Trust protects the privacy of the grantor (and beneficiaries) because the trust’s provisions are confidential. A Last Will and Testament, on the other hand, is a matter of public record. Anyone can access information about the decedent’s assets, creditors, debts, and more.

Another benefit of Revocable Living Trusts is they not only allow the grantor to control trust assets during life but also after he or she passes away. The grantor can stipulate when, how, and under what circumstances the successor trustee is authorized to distribute trust assets to beneficiaries. This is particularly important if the beneficiaries are not yet mature enough to manage an inheritance on their own, or in situations involving blended families. For example, the grantor could stipulate that children from a first marriage receive assets from the trust, not just the children from a more recent marriage.

Revocable Living Trusts can also be used to protect the grantor and the grantor’s family from a stressful and expensive guardianship proceeding if the grantor becomes incapacitated.

As we mentioned earlier, there are many different types of trusts. If one of your primary goals is to protect assets from long-term care costs, creditors, lawsuits, and other threats, an Irrevocable Trust or an Asset Protection Trust may be a much better option then a Revocable Living Trust. If you have a loved one with special needs, a Special Needs Trust can allow you to create a fund for goods and services not provided by Medicaid or Supplemental Security Income while protecting eligibility for these vital programs. A Charitable Trust allows the grantor to set aside money for both a charity and beneficiaries, realize certain tax advantages, and generate an income stream.

These are but a few examples of various trusts and what they can accomplish. If you’re still not sure whether you need a trust, we welcome the opportunity to explain your options in detail and, if appropriate in your particular circumstances, design and implement the trust that’s right for you and your family.

Washington Elder Law provides information about securing your legacy and providing your family with peace of mind.

Washington Elder Law is a caring and trustworthy team of Lynnwood/Edmonds Elder Law professionals who offer the tools to easily and understandably guide you through estate planning. The team is motivated to educate and give clients the tools needed to make the best choices to positively impact their future finances.

We teach you how to build a positive legacy for your loved ones in our Free Estate Planning Workshops. We also include Medicaid workshops to help you claim the benefits that you can use to plan your future financial goals. Registration information is available below.

After a completed workshop, vision meetings are available to you. Ask how you can prepare for your vision meeting.

Workshop Benefits

It is important to us that your current plan meets your goals. We can help you understand what it takes to protect you and your family. Our workshops allow you to maximize your plan and get the most out of your finances.

Included Estate Planning information

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government

Strong solutions to financial issues.
A structured family committee that keeps members informed
Access to benefits
We prepare and provide the proper documentation to secure your benefits.

We always follow through with your application for your benefits.

For more information see:

Join an Estate Planning Online Workshop scheduled every Tuesday at noon.

Join a MEDICAID Online Workshop every Wednesday at noon.

Free online estate planning workshops are available now!

Washington Elder Law makes it easier than ever to start estate planning for yourself or an elderly relative.

Workshops are important and practical ways to receive free information. Our free workshops offer a great deal of advice for seniors and their families.

Our online workshops create a different approach to estate planning that eases your concerns about estate planning. Sometimes, family members might be caught off guard or are shy about estate planning details. It may be because they don’t often have enough information. We are happy to share with you how to communicate with your family about their concerns in our workshops.

Estate Planning Workshops are Free

You can plan to join our virtual workshops by calling us. We will assist you with anything you need to know about participating in virtual online meetings. (206) 448-1011

You can also register for an online workshop here.

An Introduction to Washington Elder Law

Let us start from the beginning and tell you a bit about ourselves. We want you to meet Brian Isaacson. Brian is a member of the American Academy of Attorney – CPAs. The Academy of Attorney- CPAs is an American organization that “has a mission to promote and support the work of attorneys nationwide as they pursue justice for their clients.” You can find out more about them here.

As soon as you log on to your estate planning workshop, Brian guides you step-by-step through an amazing process that answers questions about how to start estate planning and how to access financial help for long-term care in Washington.

How To Protect “Your Stuff” in Three Easy Steps

We understand that you want to keep your stuff. What we mean by that is that you want to limit the amount of money that goes to things such as long-term care, probate, attorney fees, or pending lawsuits. In the event that you can not sustain decision-making or self-care, we know that your priority is to take care of your children and those you love.

The Washington Elder Law approach to estate planning and asset protection focuses on actual studies based on how people spend their money on important and necessary expenses.

The studies focus on the amount spent on medical assistance, long-term care, and other essential senior and family needs. Most families worry about running out of money if a family member needs long-term care.

Long-Term Care (LTC) Costs

Stay home ($500 – $18,000/month)
Assisted living ($2,500 – $5,500/month)
Nursing Home ($9000 – $14,000/month)

Knowing the problem yields the solution

The solution is knowing how to access available financial resources, which we provide in our workshop.

Benefits available in King County are over $9,000 a month if you know how to access them. For a lot of people, we can help you receive these benefits.

Find out how you can maximize your money and pass it down.

Our workshop goal is:

To teach families how to access Medicaid benefits to pay for medical and long-term care costs while preserving their wealth.

Brian Isaacson Tweet

Solutions are assured with our three step approach.

The Three Steps to Plan and Protect Your Estate

Know the rules
Asset protection
Know your options

Workshop Benefits:

Included estate planning information

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality of long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government
Strong solutions to financial issues.
A structured family committee that keeps members informed
Access to benefits

Estate Planning workshops are every Tuesday at noon. REGISTER HERE.

At Washington Elder Law, PLLC, we are dedicated to providing our clients peace of mind. Please call us (206) 448-1011 for more information regarding workshops, Estate, tax, and long-term planning.

Do-It-Yourself (DIY) projects are typically acceptable such as repairing a minor item in your home. You just Google whatever needs repairs, and there is a video or blog to tell you how to do it.

Sometimes the instructional video explains things right. Most often, important details are left out, and the project turns out wrong.

People believe they save money by using unreliable, non-lawyer owned websites. Cheap and easy is okay for certain situations, but making sure your loved ones are safe when you die is not one of them.

There is a high probability that it costs more to plan your living will online because you are trying to do a lawyer’s work with someone that is not a lawyer. The websites that advertise FREE will and testaments attach hidden fees, charge for required additional documents, and do not accurately finish legal filing or file wrong.

The only way to plan your trust carefully with a reasonable cost is to ask for guidance from a reputable estate planning attorney.

Problems with Do-It-Yourself Planning

With online Do-It-Yourself estate planning, there is no guidance or guarantee that your estate plans carry out your specific goals and wishes.
Estate Do-It-Yourself programs provide generic forms that do not cover specific concerns for the individual.
Families of the bereaved often end up paying out-of-pocket to take care of unattended business.
Some estate planning websites are scams. There is no one there to help you; just a website recording your personal information.
A professional attorney can soothe family bitterness or offer solutions when problems arise over a will. The Do-It-Yourself website might not even exist after the person died.

The American Bar Association (™) devised a task force team for an online Do-It-Yourself Estate Planning investigation. The task force found many inadequacies and drawbacks, including:

Not even a lawyer with experience in the field will use an online program for essential estate planning tasks. (Lawyers use other lawyers for personal business.)
Popular online “Legal” websites have had multiple lawsuits filed against them.
Emotional mistakes made while drafting an online document can confuse or damage family relationships. An older person might forget to include a niece, nephew or be unaware of newer family arrangements, which affect the family after they depart.
There is seldom a witness to a person doing online paperwork. If something is ambiguous later, and after the person dies, no one can explain the situation.

The Point of Wills and Estate Planning is for specific intentions and to protect your family.

Online forms are generic and do not cover specific concerns of the individual. A person plans a will and testament to pinpoint precisely where they want their money to go.

The risks of Do-It-Yourself Estate planning is incomprehensible. You are throwing away money by trying to save money. If any mistakes occur concerning your assets, property, or anything else, innocent people like those you leave behind will get hurt.

The worst part is there will be no one to fight for you or your family because there was no documentation provided, giving anyone permission to speak on your behalf.

Do-It-Yourself Documents tend to:

Not include information for all circumstances.
Not ask the appropriate questions that provide the right information.
Not advise on all of the person’s information, including other money aside from general accounts.
Not ask about family relationships and not concerned with them.
Not provide the information needed and does cost more than advertised.

A Do-It-Yourself example with painful implications:

A woman suffering from a life-threatening illness filed her own will online. Due to complications and not feeling well, she filed hastily, forgetting which money was in several accounts. She hadn’t remembered that years before her illness, she had left a beneficiary she no longer spoke to $50,000. Her wishes were that all of her money in her financial accounts go to a specific charity and a few select people. When she died, those close to her ended up paying to release the funds to a stranger and a person she didn’t want to receive the money.

Protecting Your Legacy. Planning Your Future.

Washington Elder Law is available to help you plan your estate with ease. We welcome you to join our webinar for an easy three-step process to estate planning. Preparing your will and trust can be comfortable with the right guidance.

Our mission is to:

Identify if your current plan meets your goals.
Understand what it takes to protect you and your stuff
Show you how to get what’s missing.
Let you know what Washington Elder Law offers.

Please call us so we can help you plan your future. (206) 367-1521

One of the most heartfelt problems Covid-19 has caused is separation from family members. Unfortunately, the elderly have felt the strain of being on quarantine more than anyone. Seniors, cut off from the care of family, friends, and daily resources, are dealing with extended isolation.

The problem with leaving seniors alone is that they have routines and regimens to keep them healthy. Loneliness and psychological effects can be harmful.

“As the pandemic continues, it will be critical to pay attention to how well we as a society support the social and emotional needs of older adults.” -John Piette, Ph.D., University of Michigan’s Institute of Healthcare Policy & Innovation.

An article from the scientific research journal PLOS ONE states, “Amongst the most robust consensus related to the COVID-19 disease is that the elderly are by far the most vulnerable population group.” The journal also describes that the social distancing recommendations for the elderly were hard because people must leave their homes to stay happy and active.

People in assisted living communities struggled deeply with not seeing and spending time with their families. However, strict policies enforced keep seniors safe and alive. The CDC Guidance for Older Adults reports that 78% of Covid deaths in May-Aug 2020 were seniors 65 and older.

You can ease the burden for yourself and your elderly family members with a few simple steps and a whole lot of love.

Here are a few tips to show you care for your elderly family members during quarantine:

1.) Be sure to make frequent contact with your loved ones if they are alone or in an assisted living facility. It makes them feel so much better, and you will also experience relief. We recommend these ideas and remedies that will help someone feel better fast.

If you absolutely can not visit with a loved one, have a staff member set up a Zoom meeting between yourself and your family member.
Care packages are a great way to lift a person’s spirits if alone or without family.
Send flowers, puzzles, books, games, cards, and anything to let them know you are thinking about them. It also keeps their minds engaged.
Window visits have become very popular and guarantee a smile.
Make a movie of yourself and your family and send it to them.

2.) Be sure wills, estate planning, healthcare plans, and power of attorney are intact. Estate planning for yourself or a loved one is the best way to avoid stress when approaching financial matters that revolve around illness or death.

Washington Elder Law provides an easy 3 step process that will teach you about wills, trusts, power of attorney, healthcare directives, and beneficiary designations.
You can call anytime if you have any questions regarding estate planning, Medicaid, or tax law. (206) 448- 1011

3.) You and your favorite senior are welcome to join us for our FREE webinars! We have three classes that you can watch at home or anywhere that has Internet access. Classes include:

Washington Elder Law strives to be the very best team of Medicaid planning & tax professionals. We are dedicated to providing peace of mind for our clients. Call for more information. (206) 448-1011 or 📧email: info@washingtonelderlaw.net

Kelli Click Contributor Investing I write about IRAs, alternative investments and retirement planning.

Late last year, new legislation was signed into law that will usher in some of the most sweeping changes to retirement plans in decades. The Setting Every Community Up for Retirement (or SECURE) Act was originally passed by the House of Representatives last spring. It failed to pass the Senate then, but the legislation was included in the year-end spending bill that was passed on December 20, 2019.

The SECURE Act became effective on January 1, 2020, and it will inevitably affect many retirement savers, for better or worse. Here are a few of the most significant provisions that you should be aware of:

Elimination of the “stretch IRA”—Stretch IRA is a term that was used to describe a technique in which a beneficiary would extend distributions from an inherited IRA over his or her lifetime. This could enable young beneficiaries to extend the payout period from an inherited IRA over decades, spreading out the payment of income taxes over a long period of time.

Today In: Money The SECURE Act effectively eliminated stretch IRAs as an estate planning tool. Effective for deaths occurring after December 31, 2019, funds from inherited IRAs must now be fully withdrawn by beneficiaries within 10 years of the account owner’s death. The old rules still apply for deaths that occurred before this year for the original beneficiary, but once he or she dies, the new rules will apply to successor beneficiaries.

The Act includes exemptions for certain kinds of beneficiaries, including surviving spouses, minor children, the chronically ill and disabled, and beneficiaries who are not more than 10 years younger than the account owner. Note that grandchildren are not included among these exemptions.

Elimination of age limit for making Traditional IRA contributions—Previously, individuals were not allowed to continue making contributions to Traditional IRAs once they reached age 70½. But the SECURE Act removes this age limit, effective this year. This could be beneficial for the growing number of people who are working past age 70 since they can now continue making IRA contributions indefinitely, thus enhancing their long-term retirement financial security.

Raising of the age for RMDs—Distributions must begin from traditional IRAs when savers reach a certain age. The SECURE Act raised the age for these required minimum distributions (or RMDs) from 70½ to 72. This will enable individuals between these ages to keep money in their IRAs longer and put off paying income taxes on withdrawals if they don’t need funds yet to pay for living expenses.

However, the new rule does not apply to those already older than 70 ½ or turned 70 ½ in 2019 (born on or before June 30, 1949). Those individuals must continue or begin taking RMDs under the old rule.

Expanded plan eligibility for part-time workers—Also starting next year, part-timers who have worked more than 500 hours a year for three consecutive years must be allowed to participate in their employer’s 401(k). Part-timers who worked 1,000 hours or more during the past year also must be granted access to the plan.

New employer protections for offering annuities—Due to liability concerns, many employers have been hesitant to offer annuity contracts as an investment option for plan participants. The SECURE Act provides a safe harbor for plan sponsors that will protect them from liability when selecting an insurer. As a result, more businesses may start offering these popular options in their investment menu.

Lower barriers for offering multiple employer plan, or MEPs—Many small businesses that would like to offer a retirement plan are discouraged by excessive compliance burdens and high administrative costs. One simpler and more cost-effective solution is a multiple employer plan in which small firms join together to offer a plan, sharing a plan administrator and lowering costs and administrative duties.

However, a rule requiring that businesses joining together to form a MEP have a common connection or similarity — such as being in the same industry — has made the formation of MEPs more difficult. Starting next year, these rules will be relaxed so that it’s easier for unrelated businesses to form a MEP. This could increase access to a retirement plan for employees who work at small firms.

The SECURE Act could have wide-ranging effects on the retirement planning landscape in the United States.

Thousands of Americans are at risk of going broke in retirement, and it’s only going to get worse.

These days, overwhelming student loan debt and the uncertain future of Social Security’s solvency garner most of the attention, but there’s another equally severe financial crisis looming on the horizon for millions of Americans. Thousands of people retire every day, and many don’t have the savings they need to last the rest of their lives.

When that well runs dry, they’ll need to lean on their family members to support them or seek government assistance to cover their basic living expenses. It’s a fate thousands of Americans are already experiencing, and based on data from the latest Northwestern Mutual Planning & Progress survey, tens of thousands more are set to join them in the coming decades.

The statistics say it all

While respondents in Northwestern Mutual’s 2019 survey reported better money management skills than those surveyed 10 years ago, the outlook for many of their futures remains grim. The survey found:

22% of Americans have less than $5,000 saved for retirement.
15% have no retirement savings at all.
56% don’t know how much money they need to retire comfortably.
41% are taking no steps to prevent themselves from running out of retirement savings, though many see this as a possibility.

The percentage of Americans with less than $5,000 in retirement savings actually decreased compared to last year, but 22% is still an alarming number of people without adequate savings.

The study focused on baby boomers and Generation X – the two generations next in line for retirement – and the results showed both groups have work to do. Of the 10,000 baby boomers turning 65 every day, 17% have less than $5,000 in retirement savings, and 20% have less than $5,000 in personal savings outside of a retirement account.

Retirees have been hearing a steady drumbeat of warnings about the threat of high long-term health care expenses. Many articles about long-term care discuss strategies from the perspective of retirees who eventually might need care near the end of their lives. These articles encourage retirees to take responsible steps to pay and arrange for care, so they won’t be a burden on their families or society.

And indeed, that’s a necessary and noble goal.

Turn the issue on its head, however, and consider the caregiver’s perspective: You could be doing everything right regarding your own finances — and then have your plans derailed by the needs of a family member, such as a parent or sibling, who didn’t plan ahead.

A recent study by the Transamerica Institute found that care-giving is risky business for those who step in to help an aging parent or relative. Here are some telling statistics from the study about the potential strains on caregivers:

Fifty-two percent are working full or part time. Of these working caregivers, more than three-fourths report making some type of an adjustment to their employment — using sick time or vacation days, working fewer hours or quitting their jobs or retiring. More than one-fourth of working caregivers’ employers have reacted negatively to the workers’ caregiving responsibilities.
Caregivers spend a median of $150 per month to cover expenses for the recipient. Almost half of all caregivers (43 percent) say they’re “just getting by” with their finances.
More than half (56 percent) say their own health is taking a back seat to the health of their recipient.

Caregivers also report being unprepared for their roles. Almost half (49 percent) of caregivers perform medical- or nursing-related tasks, but only about half of these caregivers learned how to carry out these tasks from hospital or doctor staff.

“Many caregivers are in need of formal training to perform their caregiving duties, especially those involved in medical- or nursing-related tasks,” said Hector De La Torre, executive director of Transamerica Center for Health Studies. “Without adequate training, they are putting both the care recipient and themselves in harm’s way.”

A recent study by Merrill Lynch and Age Wave confirms the challenges caregivers face, finding that 20 million Americans became unpaid caregivers during 2016. Of them, 30 percent cut back on their living expenses, 24 percent had trouble paying their bills, 21 percent dipped into their savings and 18 percent couldn’t contribute to other expenses or savings.

As if these strains aren’t enough, two recent lawsuits show that responsibility for paying for long-term care can spread beyond the individuals who need care or their spouses. One ruling determined that a man was responsible to pay for his mother’s outstanding debt to a nursing home. Another ruled that all siblings could be responsible to pay for a parent’s care.

And speaking of costs, Genworth recently released its “2017 Annual Cost of Care Survey,” which shows that long-term care costs continue to rise. The survey reports the following median nationwide rates:

Home health aide services: $21.50/hour
Homemaker services: $21/hour
Adult day health care services: $70/day
Assisted living facilities: $3,750/month
Semi-private room nursing home care: $7,148/month
Private room nursing home care: $8,121/month

While all of this might seem depressing, that’s no reason to ignore your better judgement and not plan ahead. As you’re preparing for retirement, you’ll want to incorporate strategies to cover the cost of long-term care for yourself and spouse, if you’re married. This can include buying long-term care insurance and setting aside assets or holding home equity in reserve to pay for care.

In addition, noted Cynthia Hutchins, director of Financial Gerontology for Merrill Lynch Wealth Management, “Make sure to review and update relevant legal documents, including a will, an advance medical directive, a durable power of attorney (which designates someone to make legal and financial decisions) and a health care proxy (transferring legal authority for medical decisions).”

If you’re a potential caregiver, you’ll want to factor the financial stresses into your own retirement planning. You’ll also want to learn about all the resources available should you need help. For example, your local Area Agency on Aging or senior citizen center can help you navigate the various community and government resources.

For most people, taking care of older relatives and friends is simply the right thing to do, regardless of the serious challenges. The Merrill Lynch/Age Wave survey provides confirmation: 65 percent of caregivers say it has brought meaning and purpose into their life, and 77 percent say they would gladly take on being a caregiver again. An overwhelming number — more than 90 percent — said they were grateful to provide care.

@2017 Steve Vernon

Source: https://www.cbsnews.com/news/long-term-health-care-costs-retirees-caregivers/