Long-term financial planning is important for all serious minded individuals.  If you want to be able to provide your children with opportunities for higher education and then subsequently have the resources that you need to retire in comfort you have to plan ahead intelligently.

If you just go forward groping in the dark step-by-step you may find yourself in a difficult position later on in your life.  Along the way you may not be able to provide for your children in the manner that you would like to.

The decisions that you make today are going to impact your future, and if you make them without any particular long-term strategy in mind you may be on a road to nowhere.

The above is true for people who are employees of a company and it is also true for small business owners.  In addition to having a business plan that leads to profitability, you should also consider how you’re going to exit the business.

Some people intend to leave their business to the next generation of the family while others intend to sell the business.  Some businesses are driven by the specific talents of the owner and won’t really have much value when the owner passes away.  Exactly how you go about things along the way is going to depend on your unique situation and your personal intentions.

If you are tired of going through life without a plan, right now would be a good time to sit down and discuss your future with an experienced, savvy Indianapolis financial planning attorney.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

To be perfectly fair it can take some time for the typical individual to mature and see the big picture from a financial perspective.  But in the end, excuses really aren’t going to pay your bills.

The truth of the matter is that most Americans who stick to a consistent career path have a comfortable retirement within their grasps.  Yet, many people will never be able to retire because they did not take advance planning seriously.

Some of those old sayings are still around because they have never stopped being true.  One of them states something to the effect of “Don’t put off until tomorrow what you can do today.”  This is quite relevant as we discuss the negative fallout that goes along with a failure to plan ahead for your elder years.

Some people tell themselves that they will always have time to begin planning at some future point in time.  These individuals often find out just how fast time can pass you by.  It can take some focused effort over multiple decades to accumulate the resources they need to retire in comfort and if you keep procrastinating you’re not going to have enough time to get where you need to be.

In a very real sense the difference between those who are living their retirement dreams and those who are still laboring away while they are in their late 60s and 70s is a simple matter of planning.  If this make sense to you, the logical first step is to seize the day, put the procrastination behind you and arrange for a consultation with a good Indianapolis financial planning lawyer.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Now that we are living in the information age there is a lot of data right there at your fingertips, and this ready access to information makes it a lot easier to plan for the future.  With this in mind we would like to highlight a very good resource that is offered by the Social Security Administration in the form of the Social Security Retirement Planner.

A lot of people have questions about Social Security, and though it is not a good idea to rely too heavily on Social Security to finance your retirement it is going to make a significant difference to the majority of Americans.  This resource can provide you with all the information you need about Social Security.

Using the Social Security Retirement planner you can find out when you will become eligible, what your life expectancy is given the age that you are at the present time, and approximately how much you can expect to get when you become eligible to receive Social Security.

Understanding what you can expect from Social Security is important when you are making preparations for your golden years.  But the truth of the matter is that your Social Security benefit alone is not going to be enough to provide you with a comfortable retirement.

If you’re like most people you are going to have to plan ahead intelligently to be able to accumulate the financial resources that you need, and the best way of doing this is with the assistance of a licensed, experienced, and savvy Indianapolis retirement planning attorney.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Social Security and retirement go hand-in-hand, but it may be a mistake to simply assume that your Social Security benefit is going to be enough to enable you to enjoy a comfortable retirement. You always hear retirement planning lawyers emphasize how important it is to set a course for the future and stick to it, but many people let it go in one ear and out the other.  But when you analyze the facts you recognize why they give this advice.

Social Security Administration statistics indicate that 64% of the people who are receiving Social Security benefits state that Social Security is their foundational source of income.  The SSA also tells us that the average monthly Social Security benefit is currently $1,072.  Clearly, these two statistics paint a rather grim picture.

The fact is that retirement is not a given, and if you do not have adequate financial resources you may well find yourself working until it becomes physically impossible for you to do so.  A recent AP-LifeGoesStrong.com poll conducted among baby boomers found that 67% of the poll respondents intended to continue working after they reach full retirement age as defined by the Social Security Administration.

35% of these people said they would be doing so because of financial need.  One out of every four of the baby boomers polled said that they would never be able to retire.  And, a similar percentage stated that they had no retirement savings at all to fall back on.

To make matters worse, we have a serious federal deficit problem and the politicians in Washington seem intent on cutting Social Security and Medicare.

If you read the handwriting on the wall, you’re going to have to plan in advance to be able to enjoy a comfortable retirement.  To take the first step toward making your retirement vision a reality get in touch with an experienced retirement planning attorney to arrange for an initial consultation.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Accumulating 3,000 base hits during a major league baseball career is a rare accomplishment indeed.  Going into the 2011 season only 27 ballplayers have been able to enter the 3,000 hit club.  With this in mind, all eyes in the baseball world have been on Derek Jeter this year as he has zeroed in on 3,000 career hits.

On Saturday, July 9th Jeter laid into a third inning David Price pitch and drove it into the left-field bleachers at Yankee Stadium for his 3,000th base knock.  He became just the fourth player who played most of his career as a shortstop to achieve the feat.  The others were Honus Wagner, Cal Ripken Jr., and Robin Yount.

As luck would have it a fan seated in the left-field bleachers, 23-year-old Christian Lopez, wound up with the historic baseball.  Experts estimate that the ball was worth $250,000, but of course the actual worth would depend on what someone was willing to pay for it.  There are those who say that the ball would have sold for $1 million or more.  But we will never know, because although Lopez was the legal owner of the baseball and all of its potential value, he gave it away to the Yankees, asking nothing in return.

Jeter certainly doesn’t play for free, and Yankee tickets are mighty expensive, so there are those who would say that Lopez’ charity was misdirected, but that is another matter.  What we would like to look at here today is the fact that the Yankees gave Lopez valuable season tickets for the rest of this year along with some relatively trivial memorabilia to say thanks for the ball. Estimates place the value of these items at about $120,000.  This may be construed as income by the IRS, and CNN is reporting that the tax liability that Lopez may face as a result of this income could be as much as $14,000.  This money would have to be paid out of his pocket.

Without judging the actions of Mr. Lopez, from a financial perspective it is always going to be wise to consult with a financial planning attorney before agreeing to a transfer of assets that could have significant tax implications.  This situation serves as a poignant reminder.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Believe it or not, a significant portion of the people in America seem to think that retirement is an entitlement that just drops into your lap.  To gain a proper understanding of the matter it is useful to look at the concept of retirement in a very basic, stripped-down manner.

The word “retirement” describes the act of ending your working career.  It doesn’t imply any automatic influx of income that allows you to do so in financial comfort.  If you plan on retiring when you’re in your mid-60s, you’re going to have to pay your way for perhaps two decades or more.  If you can do this without earning a paycheck, that’s fantastic and making sure that this is possible is what retirement planning is all about.  But there are no guarantees.

Why do people get the idea that retirement is a given?  Most of them feel as though Social Security will provide them with the income that they need to enjoy a comfortable retirement. Depending on your lifestyle and your expenses, this is probably a mistake.  Last year the average monthly Social Security payout was all of  $1,072.  And of course the future of the program is in question due to the impetus toward reducing the federal budget deficit.

What can you do to become prepared for retirement? To devise a comprehensive plan for the future the wise course of action would be to arrange for a consultation with an experienced retirement planning attorney.  But for starters, you would do well to participate in the 401(k) plan that is probably offered as part of your benefits package at work.  These are retirement savings accounts that you contribute into with before-tax earnings, so in addition to building a nest egg you also gain a tax advantage.  Plus, many employers will match your contribution into the account, and this is an excellent opportunity to pad your retirement savings without dipping into your own pocket.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Planning for your retirement can be a lot of fun as you anticipate an extended period of time that will be yours and yours alone. Most of us have many things on our “to do” list and it is exciting to have the opportunity to do some traveling and otherwise do things that we never had the time to do while we were engaged in our careers.  However, when you’re making plans for the future, it is important to remember the time that will follow your active retirement years.

Many people are not aware of the fact that it is actually likely that you will someday need some form of long-term care.  Statistics that are provided by the United States Department of Health and Human Services indicate that seven out of every 10 people who reach the age of 65 will eventually need long-term care.  The costs associated with long-term care are considerable, with the national average charge for a year in a private room in a nursing home exceeding $80,000. If you were to spend two or three years in a nursing home at the end of your life it could certainly have an impact on your estate.

One possible solution that works for some people who are planning for long-term care expenses would be to take out a federally insured reverse mortgage called a home equity conversion mortgage (HECM).  With these loans you are receiving payments in return for equity in your home, and the only requirements are that you must be at least 62 years of age and have significant equity in the house or own it outright.  When you die or move, the loan becomes due.

You could use the funds that you received from the reverse mortgage to pay for long-term care insurance. Should you be forced to move from the home because you needed such care, the costs would be paid by your insurance coverage.  You could then sell the home and use the proceeds from the sale to pay off the HECM.  Of course you keep the remainder that’s left over after paying off the debt.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

It is easy to give advice about making sure that you start your retirement planning efforts early so that you are fully prepared when the time comes, and clearly this is the best course of action. But there is an ideal reality, and there is the real world where many people find themselves residing.  Not everyone is positioned perfectly when their retirement years come into focus, and while it is true that this is sometimes due to a lack of planning there are also forces at work that are out of the control of the individual.  You don’t have to look too far back into the past see one of these circumstances in the form of the 2008 Wall Street debacle that played havoc with many retirement plans.

So what do you do if you find yourself in need of income when you are retired?  If you own your home outright or have significant equity in it one option that is available to you is a reverse mortgage.  With a reverse mortgage, rather than you paying the bank, the bank pays you, and in return it gains equity in your home.  Because you’re not required to make any payments you can’t default, and your credit score and your income are not relevant to the lender.  The only requirements other than having sufficient equity are that you must be at least 62 years of age and live in the home in question as your primary place of residence.

Home Equity Conversion Mortgages are backed by the federal government so you can rest assured that this type of reverse mortgage is totally legitimate.  The term of the loan ends upon your death or when you choose to move out of the residence of your own volition.  At that time you or your heirs can sell the house to pay off the loan and pocket the remainder.  It should be mentioned that you do not have to sell the home; you are only required to pay off the loan and you can do so using any source of funding you choose.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Retirement planning software can help by generating quick overviews of where we’re headed financially, but unless you know the major shortcomings of these programs, you’re likely to miss some important information that could make or break your retirement plan.

First, many retirement planning programs use return rates that are unrealistic, whether through user setting or a program default. A 2009 study of popular retirement planning software condenses the 5 primary shortcomings of these programs.

1. Most retirement planning calculators with default rate settings, calculate their findings based on a rate of return that is too high. Clearly, making decisions based on inaccurate data is not the right way to go, whether for long term planning or even quick overviews.
2. Many of the retirement planning software packages reviewed in the same study were found to not accurately account for taxes and inflation, not to mention administrative and investment fees, causing such programs to overestimate net returns.
3. Too many of the programs underestimate life expectancy. One program specified that retirement would last 30 years, and another that retirement would last until the subject was 95. The Society of Actuaries recommends using a calculator that considers gender, age and health risks to determine your life expectancy, which 50% of us live to exceed.
4. Social Security benefits are not figured in with many retirement planning applications. Without specific data such as wage fluctuations over time, it is difficult to estimate Social Security benefits, but many planning programs do not account for any benefits. Go to http://ssa.gov where you can get a benefit estimate.
5. Home equity treatment is an area where retirement planning software varies greatly. If you are counting on your home investment to help cover retirement expenses, be sure to choose a program that allows you to specify whether you are willing to sell or borrow against your home to meet retirement expenses.

Retirement planning software can be a convenient way to crunch some numbers, so long as you have control over the pieces of data that matter in your situation, and that the rates are set accurately. Better yet, contact us for professional advice. With years of experience helping others plan for their retirement, we’ve got the know-how to account for every contingency. Contact us today!

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

When a parent falls seriously ill or dies, there are enough emotions riding high without throwing in financial worries that accompany these situations. But money troubles too often come part and parcel with aging parent issues.

A frequent concern of adult children is whether they are going to be responsible for their parents’ debts after they die. The answer is probably not, but there could be a couple of situations in which you are.

The elderly, living on a fixed income, may use up all of their savings and then run up credit cards to make ends meet. Your parent falls ill or dies, and the credit card or loan companies start calling. Are you responsible to pay it off?

No, you are not, not even for medical bills your parents may rack up in the last months of their lives. The only times you are responsible is if you are a co-signor on a loan (co-signors are equally responsible for the debt) or if you are joint account holder (not just an authorized user) and your income and credit history were used to obtain the loan or credit card. Having power of attorney for your parents does not make you liable for their debt, but if you abused your power of attorney or conservatorship for your parents, you would have to pay to pay money back.

The fact that you are not responsible for the debts will not stop bill collectors from calling you. If they continue to call, explain the situation to them and write a letter asking them to stop. You can also file a complaint with the Attorney General in your state.

Keep this in mind: Although you are not responsible for your parents’ debts, their estate is liable, which could affect your inheritance. After funeral expenses are paid, creditors will be paid out of the remaining estate, with secured creditors taking top priority. You are not responsible to make up the difference if there is not enough money in the estate to pay all the creditors.

Contact a financial planner or estate planning attorney for more information on financial planning or probate issues.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.