Sitting in his cushiony, beige rock-and-swivel easy chair, my dad proudly proclaimed his plan for the future: “Alan, only 3,600 days until I retire.”
The year was 1979. His projected retirement date of June 27, 2000, lay more than 21 years in the future. Dad sat at the dining room table and used whatever math skills he possessed to arrive at that fantastical figure.
Such was the life and career goal of a New York City school teacher in the late 1970s. Of course, he was off in his calculations. During that 21-year span, there were two sabbaticals and 75 banked personal days that he had to use to prevent their forfeiture. He also worked beyond his original target date.
This was my formal introduction to retirement planning.
Elder law attorneys offer a unique perspective in their retirement advisement. Since retirement planning sits at the crossroads between estate and financial planning, our discussions with prospective retirees touch on retirement accounts, pensions, health and long-term care benefits, trusts, spousal benefits and beneficiaries. The wide array of possibilities can be liberating for clients, as they can be creative with their planning. We talk at length about adult children, grandchildren and how to protect a family’s legacy.
Coordination with a financial advisor is crucial. Retirement planning must ensure that a client has the necessary resources to live their best life. Proper budgeting and investing must take into account a client’s lifestyle, familial obligations and health trajectory.
New York has Jekyll-and-Hyde financial characteristics. High property taxes, a state income tax and state estate tax reside uneasily with a flexible Medicaid long-term care system containing vital spousal protections not found in many states. The technical rules of Medicaid may alter a retirement plan. Qualified retirement accounts such as 401Ks, traditional IRAs and 403Bs are Medicaid-protected accounts once they are in payout status (regular annual distributions are coming out of the account).
Roth IRAs, funded after tax dollars, are not Medicaid-protected accounts and would have to be liquidated and transferred for a retiree to obtain Medicaid, if total assets were more than $30,182 for 2023.
Retirement affords many clients an opportunity to purchase vacation properties out of state, however owning multiple properties raises estate planning issues. For example, let’s say you own a home in New York and a condo in Florida. It is likely that, without a trust in place, two separate probates in two separate states with two sets of lawyers would be necessary to deal with those properties.
The state with the primary residence would be the initial probate proceeding state and the other property’s state would host an ancillary probate.
One overlooked aspect of retirement planning is the client’s health insurance and drug benefit plan and its eventual transition into Medicare and supplemental insurance. Elder law attorneys are keenly aware of how the right health insurance can save tremendous money during a health crisis. By the time my father retired, I was out of law school and in the early stages of my elder law career. You could say, he was my first retiree client.
Alan D. Feller, Esq., is managing partner of The Feller Group, located at 625 Route 6, Mahopac. He can be reached at email@example.com.