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Attorney Karp in South Florida Business Journal

South Florida Business Journal

The Business of Aging

Preparing for Retirement? Start young and plan well, advisers say

Premium content from South Florida Business Journal by Jeff Zbar

Date: Friday, March 9, 2012

When clients or prospects come to the offices of NFP-FDR Financial Group in Hollywood seeking retirement advice, advisers there might as well ask them to start by looking in the mirror.

Is the person staring back healthy? Has he begun starting retirement planning at a young age – say his 30s or 40s – or is there some urgency to begin amassing savings for tomorrow? Does she have children or grandchildren whom she’d like to help financially with living, college or long-term health or disability issues? Is he approaching or in his 60s, with a decision looming about Social Security distribution?

Retirement planning is not complicated. It might have urgency based on the individual’s age. But, given each person’s assets, determining asset allocation, distributions, when to tap into Social Security or whether to take out long-term care coverage requires planning. This should include the variety of vehicles and options to ensure the best protection.

It often starts with that look in the mirror, said Eric Mathes, a CPA and adviser with the firm. Starting young can help the savvy investor begin taking advantage of compound interest.

Instead, review your needs, plans, investment vehicles and assets. If in retirement, discuss distribution – and whether now is the right time. For example, some people want to tap into Social Security as early as possible. Some want to hold off on tapping their IRA as long as they can. Find a balance, Solodkin said.

By law, clients must tap the IRA by 70 1/2, he said. Yet, a healthy marrried couple that waits longer to significantly tap into Social Security can boost their annual distribution. If the couple needs at leaast some of the income, have the healthier spouse – or the one who makes or made the least – take it sooner, Mathes said. At the same time, defer the higher wage earner longer.

Future planning begins with a needs analysis, said Joseph Karp, an attorney with The Karp Law Firm and Karp Financial Services, which has offices in Palm Beach Gardens and Boynton Beach. Yet, without an honest assessment or professional guidance, many people underestimate their long-term needs, he said.

For example, people don’t want to deal with long-term care or disability insurance. They might incorrectly assume Medicare will pay for their care.

“You cannot count on Medicare to be there. Your retirement has to be properly analyzed. People think, ‘If I can live on my retirement, I will die soon enough that it won’t matter,’ ” Karp said. “Some people retire too young based upon their assets. Or, they might not do a good evaluation of what happens if one spouse dies, versus the other.”

Finally, get all your advisers on the same page. From your accountant and tax planner to the attorney who handled your affairs, financial advisers are increasingly asking seniors whether extended family are important to their investment, retirement tax and estate plans – and, if so, to bring them into the meetings, said Mindy Ferer, who leads the elder care practice at Hinshaw and Culbertson, a national law firm with local offices in Fort Lauderdale and Miami. Partner Steven W. Cutler agreed. Advisers must ask what’s important to the clinet, whom their loved ones are.

“Communication is key. You must collaborate, communicate and execute with advisors, accountants and attorneys,” Mathes said. “As boomers age, senior planning advice is more important than ever. Thirty years ago, with retirement distribution planning, people didn’t live as long. Now, they have to be prepared.”

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