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>> Good evening.

I'm glad you're with us tonight here on PBS Fort Wayne, our show is LIFE Ahead.

I'm Sandy Thomson but the real stars are sitting over here and I'll introduce you to them in just a moment.

We're going to have a nice discussion tonight about reducing mistakes that you potentially might make in planning for retirement.

And I have some experts in the field that will give you some guidance.

And I also want to remind you if you have not watched before, this is really your show.

So if you have questions, give us a call.

You see the phone number down there on the bottom of the screen and you can just dial that number any time here in the next half hour and we'll direct your questions to our panel this evening.

OK, let's get ready to introduce and to meet our guests this evening.

First of all, you know her if you've watched LIFE Ahead before because she's been on many times and that's Janelle Sprinkel.

>> Nice to have you back always thank you for having me.

>> I love it.

Oh, good.

Janelle, by the way, is an attorney specializing in elder law and she has brought with her tonight Josh Millard.

Josh is a financial planner and he was just saying that he's just kind of really busy right now with things about estate planning and taxes and all kinds of issues like yeah, it's always crazy this time of year with with these kind of kinds of questions.

>> Is it why is it more or why is it busier this time of the year?

>> Josh just seems like people are kind of thinking about this stuff come spring and thinking about you know, people a lot of people are thinking well maybe I don't want to go to work now that the weather's nice, maybe won't it look like if I didn't have to go to work tomorrow?

And so that causes a lot of questions on can I retire or should I retire or what would it look like if I retired?

>> Those are some of the things I want to ask you because I think you all think about it.

>> It's like when can you retire?

How do you counsel clients when they come to you and say do I have enough money saved to retire yet?

>> Yeah, that's and that question can be a little bit more difficult than it seems like it should be because you think about everybody lives completely different when they're working.

Some people live on higher income or lower income or you know, do more things and and it's the same in retirement and it's really a relationship to how much money you're going to need to spend in retirement.

What does your budget look like and and your outgoing versus your income and how much income you're going to have and how much assets you have saved up to be able to provide that amount of income.

>> Is there a formula I mean would you like say you know, figure how much you spend a year now and then say OK, that's how much I'll need a year when I retire?

>> Yes and no because some expenses drop off when you retire like you stop panic attacks because you pay the federal income tax on for Medicare and Social Security on your working income.

Well, you don't need that anymore in retirement.

You also don't need to fund your 401k because you're going to start withdrawing out of your 401k right instead.

>> So a lot of times a good rule of thumb is about 70 to 80 percent of your current income in retirement just because some of those expenses drop off.

>> Yeah, well I heard people say professional people say we spend the first half of our life acquiring in the last half of our life getting rid of things.

So maybe by the time you retire you just don't have a need to spend a lot of money you aren't caught up with like in a new car or let's get a bigger house.

>> You know, you might begin to decline some of those areas.

>> Is that the case sometimes.

But then all people always have their dream list like I would like to do more traveling or we'd like to take the kids on vacation different things or I want to buy that RV or we'd like a vacation home and some expenses do fall off but some expenses pick up.

>> Yeah, depending on what your wish list is for when you retire.

OK Janelle how can an elder law attorney help with a retirement if I say I've decided I want to retire next year and I came to you what would you help me with or what what things do I need to bring to you to help you guide me?

>> So an elder law attorneys role in retirement is to make sure that you have the documents you need to protect you while you're living in as you age and then also to make sure that the assets that you've worked hard for and that you know, a financial planner has helped you save and and accrue are passed efficiently and with the best tax application to your heirs, OK. All right.

Now I know you always guide us to make sure we have the usual documents which are power of attorney.

>> You got it.

You know this you've heard this before this so yeah, the most important are the ones that protect you while you're living.

>> So those documents are your power of attorney.

Yeah.

And your health care power of appointment so that someone can help you with transaction or with medical decisions if you need them to.

And then the other one is of course your will or a trusters or somehow to to exercise your right to to put your funds wherever you want to after you pass away.

>> Speaking of funds and Josh, you know, if a lot of times different assets that you might have you name a beneficiary.

>> Yeah.

And here's my question.

A lot of people think that if they're a beneficiary that when somebody passes they get that money right away.

>> True or false and why?

Well, yeah, it varies a lot depending on what type of an asset it is.

So if you're a beneficiary in your will that time frame would look a lot different than if you're a beneficiary of an IRA or of a life insurance policy.

Those are much quicker but they still do take some time because what happens is if you are the beneficiary you call out to that company that has the asset and provide a death certificate.

They send you a packet of paper ,you tell them how you want it deposited or if it's an IRA do you want to roll it over or do you want to cash it out?

So there are a lot of decisions to make on your end but then you provide the paperwork back to them and they send you a check so it takes a while but it's fairly efficiently is the more complicated a person's estate is, the longer it might take I mean to say they own some property that you're going to have to sell that RV Josh wants to buy you know, some things you want to get rid of .

>> So maybe there's a time period for that.

Oh, absolutely.

Yeah.

And it depends whether we're going through probate or not.

So a lot of people when they come to me that's another conversation we have is one of your goals.

Do you want to avoid probate in probate is just the process of going through the court to get the assets transferred so but then the court will set time limits as far as leaving your probate estate open for creditors and publishing in the newspaper.

So if you have a probate estate it will necessarily kind of extend the time frame.

>> Got it.

We have a question already from one of our viewers and thank you for guiding Larry here.

>> Larry called in.

>> He says I have inherited an IRA from a deceased parent.

Do I need to continue taking the minimum disbursements or what is the best method?

>> That's a legal question.

Yeah, and I can I can answer for it, Larry.

>> That's a great question.

So if your deceased loved one was taking our WMDs required minimum distributions before they passed, then yes, you are required to continue taking those WMDs.

There's also a provision that you have to take all of that all of the asset within ten years so you can take a little bit about each year.

You can take all of it in the first year, all of it in the tenth year.

But by the end of that tenth year you have to have all of it pulled out.

Those were some new IRA laws that went into effect a few years ago.

>> OK, all right.

Thanks.

Yeah.

One caveat to that is if that person deceased pre twenty 20 than the 10 year rule would not apply and you would be able to stretch that out longer than ten years joshes right.

>> So the new rules that came in came in in twenty twenty I guess I presumed Larry that that this is a recent death but Josh is absolutely absolutely right if it was before twenty twenty then instead of that ten year time frame you can actually stretch it for your entire life .

>> Oh all right good to know Larry.

Thank you so much for watching us here on LIFE Ahead and thanks for calling in with your question.

We'll wait for the rest of you to call here.

>> You still have plenty of time in this next half hour.

OK, let's go back to you.

Josh, we talked about how you know or or what helps you decide when you have enough money to retire.

What are some common mistakes that you found through your client work through the years that people make in this planning?

>> Probably the biggest mistake I see people make is not planning for the taxes.

So many people there the the lion's share of the money they've saved is in tax deferred accounts like your 401k or 403 traditional IRAs.

>> So you've chosen all these years to not pay the taxes and kick that can down the road and pay the taxes later.

Well, data's coming in.

You're eventually going to have to pay those taxes and not planning for that tax is probably the biggest mistake I see people make.

The other mistake people make is not planning for inflation.

>> Oh inflation always an issue.

Right?

So do you have to plan assuming we'll have an inflation?

>> Yeah.

Yeah you have to assume you have inflation because you think about you know a lot of people are going to be retired twenty plus years and you think about what things cost you 20 years ago versus what they cost now.

And unfortunately what we've seen lately is inflation even going faster than what we've seen twenty years ago.

So you have to plan for inflation.

A lot of times I hear folks say well you know, I want to do a whole bunch the first ten years of retirement and I want this big budget and I know later in retirement go home and do less.

So I need less income and retirement which is kind of true.

But you also have to understand 10, 20 years from now the less you're going to do is going to cost more because of inflation .

Right.

So you can't just say oh you know, I need less income and therefore I can plan on that but you have to account for inflation in there and then obviously the taxes is there a percentage or if you're thinking of counting in for inflation, how do you calculate that or do you make yeah, you really have to assume somewhere between three and four percent a year inflation.

>> Yeah.

And really because the last couple of years we've seen you know five, six, even seven percent inflation and now it's slowing back down.

But what you really have to plan for at least three percent inflation if not for each year of your retirement.

>> Yeah, and we don't know how long that retirement's going to be then because we don't know how long we're going to lose and then some things unfortunately inflation even faster which are the things that are going to affect us most as we get older health care inflation, more health care probably inflates at five six percent per year.

>> Right.

And then even what like actual care when when you get to the age that you need care from somebody that inflates even faster than that.

So some of those big expenses inflate even faster than what we anticipate say groceries and gas to inflate.

>> It's the hardest thing to make decisions about again because you don't know how long you're going to live after you retire so you have a hard time deciding when you have enough money.

>> We have another question.

>> This is from Betty.

Betty, are you on the line with us?

You're maybe no.

>> OK, all right.

Betty left your phone call with us here in the control room so I'll ask that of our panel this evening.

>> Betty says Do all wills have to go through probate?

>> Yeah, and and Betty, that's a great question because I know sometimes there's a misconception that if you have a will you're avoiding probate.

So but to answer your direct question, no, not every will has to go through probate.

It is dependent upon what your assets are and how much your assets are.

So in Indiana and sometimes this number changes but in twenty twenty five if your assets are over one hundred thousand dollars that is the the threshold of when we need to probate your estate.

So anything under that we do not have to probate.

>> That was a great question.

OK yeah.

Thank you Betty so much for watching and for calling in this evening.

>> OK you know let's go back to another legal question.

>> Long term care a lot of people begin to consider as they age actually if I'm correct from guidance you guys have given this before the older you get the more it's going to cost.

>> Then if you bought a policy in younger years, do you have is there a standard or recommendation here?

>> So I think you're talking about the long term care insurance.

Yes, yes.

Yes and that is true and I think Josh can probably talk to the insurance part but but to answer your question really that's one of the things that we do talk to clients about as elder law attorney is figuring out the best way to structure your assets to pay for long term care course you can always private pay by just paying whatever the rate is of the facility or we can talk about private paying with some supplements like the long term care insurance or I think we you and I have talked about before veteran's benefits is another way to supplement that cost and then of course I know we've talked about this before Medicaid that is another way to that the apply for for a state benefit to help supplement the cost of that long term care.

So we have conversations what are your assets and how best to structure you for long term care?

And then Josh, I don't know if you wanted to weigh in on the insurance but that is another way to help pay for that.

>> All right, Josh, you get to weigh in on this.

Yeah, Long term care insurance is obviously something that that is a great way to pay for long term care expenses.

Unfortunately it's it's fairly expensive to buy and the other unfortunate part is it can be difficult to qualify for .

>> Oh really?

Yeah.

Because obviously the insurance company doesn't want unhealthy people because they want people the insurance company wants people that probably aren't going to go to the nursing home.

They want to weed out the the unhealthy people and bring in the healthy people so it can be hard to qualify for .

>> So the key with long term care insurance is to get it when you're a little bit younger maybe in your mid 50s is kind the sweet spot for that while you're still healthy and then you know, figure out ways to pay for it.

One of the other keys is, you know, fitting that into your retirement budget if you get policy that you have to pay for forever, that can be a big expense in your retirement budget.

So you can plan for that and do what's called a ten pay where you pay ten point ten pay.

>> OK, or you only pay for it for ten years and then it's paid in full and you don't have to pay the premiums for ever.

So if you do that say 55 and you retire at 65 then you don't have to fit that in your retirement budget.

>> OK, but you're still covered by that.

You're covered .

Yeah, it's fully paid for and you're covered and you don't have to worry about them raising the rates on you and you don't have to worry about paying that premium forever.

It's it's paid for you retire.

It's paid for you're done.

You're ready to move on, be retired.

>> Should we pay attention to commercials that we see a lot from insurance companies about everybody's covered .

>> There's no medical qualification.

>> What does that mean?

Well, what are they that's a lot of times you're thinking about like these final expense life insurance policies is what they're talking about there and that a lot of times that's what's called a graded life insurance policy which means that you pay the premium ,you have life insurance but you really don't have the full value of the life insurance until you've paid so many premiums.

Yeah, like two or three or five years with the premiums then you got the full death benefit .

But up until then they'll essentially if you were to pass they would give you all of your premiums back plus interest.

>> Oh that's how they can give you a guaranteed policy with no health questions.

OK, all right what what about Medicaid and both of you can jump in here on that.

How do you qualify for Medicaid and how does that help you as you move into your retirement period?

>> Janelle, let's start with you, sir.

Well, Medicaid is a state run benefits program that if you ever needed long term care the state would help pay for some of that cost.

>> So if you're like a nursing home or a home health care yes.

So there are Medicaid benefits that apply if you want to age in your home home health care there's Medicaid benefits if if assisted living facility is the best care plan for you and there's also Medicaid benefits in a nursing home situation.

So the benefits look different in each of those three.

But to kind of pick the middle one for an example assisted living facility maybe anywhere from thirty five hundred a month to eighty five hundred a month depending on your level of care if you are eligible for the Medicaid, if you apply and you're found eligible then Indiana caps your room wait rate depending on the year this year's rate is nine hundred and sixty seven dollars so it's a significantly less than you would have to pay if it was a private pay rate of thirty five to the cap the amount how much done on a nursing home how much your room and board would be per month they lower that to nine hundred and sixty seven dollars for twenty twenty five that's what you would pay per month if you were receiving a Medicaid and an assisted living facility.

So rather than paying the full private rate you would pay that reduced amount per month.

>> Does every nursing home or assisted living except that no not all of them do and you can call and ask and see if they have if they accept Medicaid and sometimes facilities will have so many beds within the facility that do accept Medicaid and some that are private pay pay only.

>> But you can find that out again a website that every facility has their own rules on that.

>> And so we have one in our firm that kind of lists all the firms and whether they accept or not.

But you can also find that by by calling if there's a couple of facilities that you're interested in and call them and ask them directly do people judge sometimes not or are not aware of benefits they might have with Medicaid or as I mentioned earlier, VA benefits which can be wonderful in a lot of things you can get but are there people that don't claim those?

>> Yeah, unfortunately like a lot of government benefits it's they're difficult to understand.

Yeah.

And people don't know if they qualify.

The VA benefits are kind of strict as to what years of service you would be in to qualify for that.

The Medicaid benefits have a lot of financial rules to them of what assets you're allowed to have and still qualify and what assets you're not allowed to have.

And and there's lots of things that can actually be done with planning is you can, you know, move things around in order to qualify for Medicaid.

And that's really what what Janelle specializes in is is working with folks and helping helping with that.

>> OK, all right.

Let's talk a little bit about Beneficiary's again.

We touched on it earlier.

>> Say you have a lot of different assets in your your estate planning that you have acquired or you put money into.

>> Can you have different beneficiaries for each one or do you have to use the same people?

>> Oh sure you can and you can have different beneficiaries on each and every one.

And so when we're talking about your estate plan we're kind of looking at your goals as a whole and so sometimes it's better a lot more people will match their beneficiaries to their will or to their trust and you don't necessarily have to do that.

So sometimes if I'm speaking with someone and they have charitable intent, I say well you know, it might be a really great idea.

Instead of having a gift through your will, you could use your IRA beneficiary to give your charitable donation because a charity doesn't have to pay income tax on that.

So anyone else if it's a traditional IRA when they pull that money out as a beneficiary they have to pay income tax on it just like someone would during their life which Josh mentioned.

>> Some people don't think about you all.

You're exactly right.

Yes.

Yes.

Exactly what Josh was talking about.

So that's just an example.

So in a situation where you would have a charitable intent ,you might have your IRA beneficiary, certain percentage of it going to your favorite charity and have the rest of it going to your family or I have some people who set aside an account just for their grandkids and so that account has all the beneficiaries of the grandkids and they feel good about doing it that way.

So there's a lot of ways that we can structure your beneficiaries to obtain your estate goals but it really is something you want to think about as a big picture and not just as an individual asset because you can get yourself kind of in trouble if you're estate plan doesn't sync with those beneficiary forms.

>> OK, let's say your will and your beneficiary is do not correspond which takes precedence.

>> That is a great question.

Yes.

So a beneficiary asset actually goes around your will goes around probate so whatever amount is in that asset it goes to beneficiaries.

So sometimes when people are are trying to avoid probate they have directed all of their assets through beneficiaries forgetting that there will over here is not going to be funded.

So that gift to X, Y and Z may not happen because you've beneficiary to all around that another reason why you really want to think of your estate plan as a whole and think through how exactly you want what your end goals are, what happens if you know that money's all gone to beneficiaries one day?

>> Yeah well your well doesn't get funded so those those individuals don't get the the wishes that you wanted them to have.

>> Yeah well that's just the way it is.

Yeah.

Yeah.

Another reason why you need to be thinking about these things financial advisors Josh how do they counsel people that you know if clients come to you and say OK I haven't thought about it before but I'm getting close to thinking about retirement, how do you counsel them what they need to do first second whatever?

>> Well, first you got to figure out a what have you saved?

Yeah.

Where is it at?

You know, what's the tax consequences of it be?

What's your income needs in retirement and then figure out how you're going to supply those companies because you know pretty much everybody's going to get Social Security and for most Americans that's going to cover about 40 percent of their income needs.

So they've got to figure out how are they going to fund the other 60 percent?

Is it going to be do they have another pension?

Do they have to figure out how to take withdrawals out of their savings for retirement, how to create that income?

And that's the biggest key for most people trying to get retired is how do they fund their monthly budget out of the money that they've saved?

>> OK, all right.

Good advice.

We just have about a minute left to go.

Janelle, I'd like for you to give to our viewers your thoughts of the most important things they need to do to avoid mistakes here in their planning for retirement.

>> And I guess I want to just continue with the last question that you ask because I was thinking about how how beneficiary forms interact with retirement and really when you're working with a financial planner and you've set a great plan for your retirement, sometimes assets have been consolidated or we've rolled over a work for one K into an IRA and your assets have changed.

So that's really once you have everything set up and all of your big mistakes taken care of and and worked out, then that is a great time to come see your attorney because there are a lot of those beneficiaries that have changed.

You want to make sure those are all updated.

So it really takes a good team of someone looking at your finances and someone looking at your estate plan and working together to get the best package and plan for you where you've you you've just done what our intent is here on PBS and that is to give people information and education to help you with your decisions and choices you have to make in your LIFE Ahead.

Thank you, Janelle.

Thank you.

Josh, thank you for being here.

Thank you for having us.

And we'll be back again here next week at seven thirty on Wednesday night.

See you then