Estate Planning

Retirement Planning and Saving

Many Americans are saving nothing or very little in their day to day lives for retirement. While the unemployment rate has previously been  low and wages are seeing an increase the American worker is not saving enough of their income which will inevitably lead to short falls of operational cash during an unexpected crisis and in their retirement years further down the road. (https://www.cnbc.com/2018/03/15/bankrate-65-percent-of-americans-save-little-or-nothing.html)

Bankrate maintains that half of all Americans will not be able to maintain their standard of living once they have stopped working. GoBankingRates corroborates these findings citing that over forty percent of Americans have less than $10,000 dollars saved for their retirement. These statistics point to a dismal retirement future for nearly half of all Americans.

This doesn’t have to be your future. It doesn’t matter how little you currently save. You don’t have to become the horror story of retiring and meeting financial ruin like so many do. What matters is that you change the trajectory of your retirement life by proactively examining how you are spending and saving. The sooner you begin the better your chances of success.

The first and most important strategy to implement is learning to live beneath your means. That translates into saving money: probably more than you currently do. Saving money is an underestimated survival skill. To save begin by tracking your spending habits for thirty days. Once you have the data create a realistic and doable budget. Fluid expenditures like groceries, eating out, clothing, gasoline and auto maintenance need to have a set monthly budget. Create a simple two columned sheet of paper with budgeted and actual expenditures to monitor your progress. Typical categories where you can reduce expenditures include; cable packages, phone plans, groceries, entertainment costs, gym memberships, clothing and dining out. Start asking yourself over and over “Is this a need or a want?” and if it is a need, how can you make the cost lower. The game is how much money you can save, not spend.

Consolidate your non essential debt and pay it off, completely. Make it a primary goal to get out of debt. Stop being a debt slave. In the credit card industry there is an insider term used for people who fully pay their credit cards off each month. Guess what it is? It is a deadbeat. Companies cannot make money off of you if you stop becoming a slave to debt. If you can’t afford it then find a way to live without it.

Double check your insurance rates on your car, homeowner, and health. Do not purchase flight insurance, extended warranties, and disease insurance. Check this site for fifteen insurance policies you don’t need. (https://www.investopedia.com/insurance/insurance-policies-you-dont-need/). Get rid of the policy all together or find wiggle room for reduced premiums or get a more competitive provider to save money.

Get rid of automatic payments attached to your banking accounts. Most people can eliminate expenditures they forgot they are even locked into. This also forces you to take control of your bill/payment cycles. Being involved in the day to day of bill payment keeps you far more aware of your financial situation and keeps your mind active.

Consider downsizing your home. If you are in a two story house it is inevitable that one day you will not be able to climb those stairs. A one story home or a first floor condo or apartment can help you purge your life of ‘stuff’ you no longer need. Some of those things can be sold and the proceeds can be saved. Any profit left over from downsizing immediately goes into savings or a financial investment vehicle to provide and protect your senior years.

These are some but not all of the ways it is possible to change your savings habits. Guidance from a trusted professional is key to the pathway of success because there will always be roadblocks and setbacks that you must make adjustments for.  Structuring a legal plan in connection with a retirement plan can provide added protection and allow you to enjoy retirement more thoroughly.

Contact our office today and schedule an appointment to discuss how we can help you with your planning. Please contact our Reno office by calling us at (775) 853-5700.

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Social Security Disability Income and Qualifications 101

Temporary or permanent disability can happen to anyone at any time. Do you understand the role social security can play? Some projections are estimating that Americans in their 20s today have an approximate 30 percent chance of experiencing a disability profound enough to cause them to miss three or more months of work before retiring. Despite the risks, most Americans do not carry short or long-term disability insurance. Close to half of all mortgage foreclosures are due to owners being struck with a disability, and fewer than 15 percent of people who purchase life insurance opt for disability insurance. The Social Security Administration (SSA) was tasked in 1956 to address disability and work income by creating a disability insurance program. Throughout its long history, additional rules have contributed to its complex regulations and eligibility requirements that make applying for disability benefits difficult.

What Are the Disability Benefits and Eligibility?

The disability benefits are in the form of monthly payments to provide a safety net for qualified individuals who have become too disabled to work. The benefits are paid through the Social Security Disability Insurance (SSDI) or the Supplemental Security Income (SSI) Programs. Both of the programs are intended for disabled workers, but they have different benefits and qualifying requirements as well as different funding sources.

To become eligible for the SSDI program, you will have worked a required number of years in a job where you paid into the social security taxes (FICA, Federal Insurance Contributions Act). You have to have accrued a certain number of work credits. You can earn up to 4 work credits per year. Workers that do not have the required number of work years and who also have low income and minimal assets can apply for SSI. In both programs, you are not eligible to be engaged in a substantial gainful activity (SGA), earning a certain amount of income from some other work.

The number of work credits required as a qualification for SSDI benefits depends on the age at which you became disabled. Generally, it is possible to qualify if you have earned at least 20 credits in the ten years before being disabled and if you have earned credits that total 40 or more. If you do not have enough work credits to qualify, there is a chance you can become qualified based on a spouse or parent’s work record. There are many regulations governing eligibility for SSDI, and each individual has a varied work history. To understand how to qualify and how much you should be able to receive, it is best to contact a legal professional for help.

Maintaining Disability Qualifications and Benefits

Once you qualify from a work history perspective for SSDI, then you must prove you meet medical eligibility requirements. SSDI benefits are available to those workers who have a severe, long-term, or total disability. A severe disability is a condition that interferes with general work-related actions. Long-term disability means you are unable to perform “substantial gainful activity” (SGA) for a minimum of one year. Total disability is a person’s inability to work in their own or any other occupation for which they are suited by training, experience, or education due to a sickness or injury.

SSI medical qualifications are similar to medical terms used in SSDI qualifications; however, these individuals must also have limited resources and a low income. The benefits from the SSI program are funded through general tax revenue and not dependent on your work history or having paid into the social security taxes known as FICA.

For either program, it can be challenging to qualify for the SSA’s definition of disabled. To be considered disabled by the SSA, your condition has to last a year or be expected to last a year. Or your condition should be expected to result in your death. Your condition must also significantly limit your abilities to do necessary work activities like walking, sitting, standing, or retaining and remembering information. Additionally, your condition must be listed in the SSA’s “Listing of Impairments” (Blue Book) or have medical equivalency to listed conditions. Finally, your condition must prevent you from doing any work for which you qualify before your disability.  

The Approval Process for Social Security Disability

Becoming approved for benefits is a lengthy and often frustrating process as many people are denied on their first application. A myriad of forms, doctors’ recommendations, personal medical history, work, and tax documentation all contribute to becoming accepted into either program. You can apply online or at your local social security office. It is best to contact the office to schedule an appointment to submit your application for benefits. Regarding financial qualification, be prepared with your work history and current earnings, household assets and income, your bank, and financial institution information. Also required is your current and past employers and up to five jobs you have held in the past 15 years, any other benefits you may be receiving, your status of citizenship, and, if applicable, any paperwork from a military discharge.  Pay stubs, proof of citizenship, W-2s or 1099s, information about your disability, and detailed medical records are all pertinent data to bring.

An initial application that is denied has multiple stages of appeal. You can enter a request for reconsideration or even go up as high as an appeal to a federal court. If your condition has made you very sick and you are experiencing a severe medical condition, there is a streamlined process known as the SSA’s Compassionate Allowance List. This list primarily includes adult brain disorders, certain cancers, and several rare disorders that affect children. If and when you are approved for disability income through SSDI or SSI, there is a waiting period. Benefits will not be made available to you until you have been disabled for a full five months, and, likely, you will not be approved for six months to a year, including the likelihood for at least one level of appeal. Be prepared from the outset for a lengthy process and improve your chances for approval with a well thought out, legally reviewed application for disability income. If you have questions or would like to discuss your situation with us, please do not hesitate to contact our Reno office by calling us at (775) 853-5700.