1. NYSBA 2015 Annual Meeting Planning Ahead for Retirement: Putting Your Personal, Financial and Office Affairs in Order
Daniel A. Timins, Esq., CFP®
450 7th Avenue, Suite 1500
New York, NY 10123
(212)

2. Saving for Retirement & Preparing for Aging
I. Financial Affairs
Saving for Retirement & Preparing for Aging

3. Types of Retirement Plans
Qualified Plans
Defined Benefits Plans
(Future Benefit Known)
Traditional Pensions
412(i) Plans
Cash Balance Plan
Defined Contribution Plans
(Current Funding Known)
Money Purchase Plans
Tandem Plans
Target Benefit Plans
Profit Sharing Plans
(Employee Funded; Employer Funding is Optional)
401(k) Plans
Savings & Thrift Plans
Stock Option Plans
Stock Purchase Plans
403(b) Plans
(Employer $ is Qualified)
Non-Qualified Plans
Traditional IRAs
SEP IRAs
Simple IRAs
Pension Plans
(Employer Funded)

4. Defined Benefit Plans General Concept: Positive: Negatives:
We DO know how much we will receive one day
We do NOT know how much we need to contribute until the year of contribution
Positive:
Can contribute a large amount of pre-tax dollars
Lump sum transfers to IRAs permissible
Negatives:
Annual actuarial costs and initial set up costs
Payment amounts are required / inflexible
Most Appropriate For:
Aging practitioners at the height of their earning years
Stability of annual income is helpful for long-term planning

5. Defined Contribution Plans
General Concept:
We do NOT know how much we will have in the future
We DO know how much we have contributed any given year
Positive:
Minimal set up and recurring costs
Not “locked in” to any contribution amounts
Negatives:
Significantly smaller contribution levels and tax savings than Defined Benefit plans
Most Appropriate For:
Any person willing to save for retirement

6. Contribution Limits for 2015
Defined Benefit Plans: $210,000
Based on plan design, income, actuarial figures, etc.
401(k) / 403(b): $18,000
“Catch Up” for those 50 and older: $6,000
SEP IRA / Solo 401(k): $53,000
Amount is based on a percent of actual income
SIMPLE IRA: $12,500
Very inexpensive plan to start and maintain

7. IRA Limits for 2015 Traditional IRA: $5,500
“Catch Up” for those 50 and older: $6,500
 Deductible now, tax deferred growth; tax at time of withdrawal
IRA tax deduction phase out – ONLY if you are not covered by another plan:
Single: Full amount can be deducted
Couple where spouse has no plan at work: Full amount
Couple: $183,000 - $193,000

8. Roth IRA Limits for 2015 Roth IRAs: $5,500
“Catch Up” for those 50 and older: $6,500
 Taxable Now, tax deferred growth; no tax at time of withdrawal
Roth contribution availability phase out:
Individual: $116,000 - $131,000
Couple: $183,000 - $193,000

9. Defined Contribution Contributions
Can be made in one lump sum or on an on- going basis
Can be made as late as April 15th of the year following the actual deduction
Example: Can fund 2014 contribution as late as April 15, 2015
Can be made from Required Minimum Distributions (if you are over 70 ½ and still working)

10. Comment on Roth Conversions
You can convert pre-tax dollars to Roth IRAs
You pay taxes on all withdrawal amount
There are many arguments against converting
You are taking a certainty (paying taxes now) in the face of several uncertainties
How much will taxes be in the future?
Will RMD treatment change in the future?
Will you live long enough to see substantial RMD withdrawal amounts?

11. Social Security

12. Social Security

13. So…How Much Do I Need? What does Dan say?
Varies during different phases of retirement
Ages 70 – 80: 100%-140% of working discretionary income
Ages 80 – 85: 70% - 80%
Ages 85+: Marked decrease

14. Long Term Care Insurance
ACTIVITIES OF DAILY LIVING (“ADLs”)
Transferring (Ie. Walking)
Bathing
Dressing
Eating
Continence
Toileting

15. LTC Insurance to the Rescue!
Long Term Care Insurance = Private Pay
Pays for Home Care:
a certified caregiver comes to your home to assist you with your ADLs OR
Pays for Nursing Home Care
A need for more constant care
Trained staff on-site (such as nurses)

16. LTC is NOT… Medicare Medicaid Health Insurance Disability Insurance
Life Insurance

17. LTC: How the Benefit Works
Example: $250 per day for 5 years
$250 x 365 days x 5 years = $456,250
$456,250 is usually your guaranteed amount
This is your “Insurance Pool”
If you use it slower = lasts longer
If you use it faster = lasts less time

18. LTC Problems Very few lapsed policies!
Lapsed policies were built into premium prices
Insurance companies losing money!!!
Insurance Company “Fixes” – for new AND existing policies:
Premiums raised
Coverage Terms decreased

19. II. Personal Affairs Living Documents Post-Mortem Documents
Power of Attorney
Health Care Proxy
Post-Mortem Documents
Last Will and Testament
Beneficiary Designation Forms
Trusts (optional)

20. Power of Attorney
Designate a person(s) to manage your financial affairs.
Business partner  business finances
Family member  personal finances
States specific areas of your finances you are giving control over (can be all areas).
Can allow “Gifting” to others
Beware. This is a blank check. The person you designate could take all your money. They could go to jail, but the money may have disappeared before they are caught.

21. Health Care Proxy A document regarding health care decisions
Names an “Agent”
Gives authority to make health decisions
Grants access to medical records
States Organ Donation desires
Places limitations on treatment

22. Living Will States your desires when:
1. You are in a terminal condition; or
2. You are permanently unconscious; or
3. You are conscious but have irreversible brain damage and will never regain the ability to make decisions and express your wishes.
These conditions are sometimes referred to as a “vegetative state."

23. Methods to Transfer Your Property
“Operation of Law” Transfers
“Testamentary Substitutes”
Probate / Administration
Anything with a “Beneficiary Designation” Because we know who it goes to at death
Jointly Owned Property
Some Business Agreements
Retirement Plans
Life Insurance
Transfer on Death [“TOD”] accounts
Trusts
This is what transfers through your WILL
Because we don’t automatically know who it goes to
This includes all property not listed under “Operation of Law”
(I.e. everything else)
2 Legal Procedures:
If there is a valid Will = “Probate”
If NO Will = “Administration”

24. Non-Testamentary Transfers “Testamentary Substitutes”
This property does not require a Last Will and “Testament” for it to be transferred (so we call it “Non-Testamentary”)
Your Business Partnership (sometimes)
Joint Property
Life Insurance
Retirement Plans
Transfer on Death [“TOD”] accounts
Trusts

25. So When Do I “Need” a Will or Trust?
Estate tax planning (if you have substantial assets)
Medicaid Planning (if you are worried about age-related illnesses)
Beneficiaries are spendthrifts / substance issues
Second marriages with children from another union (sometimes)
Substantial assets in one person’s name that are not Testamentary Substitutes

26. Trusts vs. Wills Wills Trusts Positives Typically cost less to draft
You should have one anyway
No Probate costs for assets transferred by Trust(s)
Private document
Fast distribution of funds / Continuity of control
May provide tax savings / government program access
Negatives
Eventual Probate Costs
All information is public
Longer time to access and distribute funds
You may need a “Testamentary Trust” anyway
More legal fees up front
Time / effort required to transfer assets into Trust

27. III. Office Affairs
Preparing Your Practice for Incapacity, Transfer or Death

28. Determine Your Successor / Value Your Practice
Identify a Protégé
Same practice area(s)
Same values / morals
Enable their success! Introductions, referrals, office equipment, client files, etc.
Valuation: How much?
Your client list and contacts have a value
Transactional practices with recurring clientele may have a greater value

29. Power of Attorney (Work)
Consider having a POA for your office affairs while working
A protégé or trusted colleague is more appropriate than a spouse, or an associate / employee
Include appropriate terms in the Modifications Section of the Statutory POA
Access to office, client files, client contact information
Do NOT include gifting abilities under Statutory Gift Rider of POA
Agent can still gift to you; from there your personal POA should handle gifting

30. Power of Attorney (Continued)
Have “The Talk” with your Attorney-in-Fact as to your desires
The POA requires that the Attorney-in-Fact honor the instructions and desires of the Principal

31. Power of Attorney (Continued)
Technology Consultant
Have your business passwords on file with your technology consultant
Provide written instructions as to who your agent is and to what they should have access
Provide a list of other pertinent contacts
technology consultant, banker, insurance agent, book keeper, accountant
Provide location of client files

32. Your Passing and Your Practice
Your responsibility over client files continues after your passing
Your Executor / Administrator will have to handle your firm’s affairs (if it is not transferred prior to your passing)
Your Executor needs to make an application to the Court to access your Attorney Escrow Account