Is Your Relative Hiding Their Alzheimer’s?
Actor and funnyman Gene Wilder recently died from complications from Alzheimer’s. It was revealed that he had hidden his condition from most people for over three years. Wilder reportedly wanted his fans to remember him for roles in films like Willy Wonka, Young Frankenstein and Blazing Saddles, and not this affliction. Sadly, this is all too common among Alzheimer’s sufferers.
Many Alzheimer’s suffers try to hide their symptoms fearing a loss of control over their own affairs and of losing their independence. This same fear and the inability to confront their impaired cognitive skills can lead to severe financial consequences for your parents and other relatives.
Discussing the issue
The best time to discuss dealing with the potential symptoms of Alzheimer’s with your parents or relatives is before they exhibit these symptoms such as loss of memory or confusion. Urge them to designate a family member or trusted friend to handle their financial affairs in the event that they cannot. As your parents or relatives age consider having periodic family meetings to discuss their finances. The elderly are common targets of financial fraud and abuse. Those with Alzheimer’s are easy targets.
We work with multiple generations of many families and we understand how difficult this issue is, and the need for financial conversations. We welcome including conversations with family members regarding your financial situation, at your discretion, of course. As independent financial advisors in Las Vegas we can offer a wide array of options for you and your family.
Retirement Savings ‘Tales’
Sometimes people make excuses why they think they don’t need retirement savings, or additional retirement savings options. This results in a ‘retirement savings tale’, and isn’t necessarily true regarding their own ideas that may be self- designed, or advice from someone else. Here are some common ‘tales’ about retirement saving:
Tale #1- My work retirement plan is enough. If this is the only thing you’re doing, are you saving the maximum allowable or only enough to receive your match from your employer? Secondly, a discussion on pretax and taxable retirement savings would be a benefit to you so you fully understand how this can affect you in retirement when you access these savings. Employer retirement savings is only one of many things you should be doing to prepare yourself for retirement.
Tale #2- I’m still young and can wait to start saving. The younger you are when you start, the more time you have to accumulate retirement savings and need to save less per month to reach your goals.
Tale #3- Paying off debt is more important than saving for retirement. If you are always accumulating debt you will delay retirement with this idea. At least start with participating in your company retirement plan at the amount required to receive a company match. Add another retirement savings vehicle, such as a Roth IRA with an amount that fits into your budget. As you pay off your debt, save that additional money left over each month for retirement.
Tale #4- Social Security will be enough retirement. This is based on inaccurate information. If you rely on only this you will have to continue working full time to make ends meet. Given the current Social Security Benefit Estimator, the age you become eligible to receive benefits may change, as well as the benefit amount. The estimator indicates a lower benefit paid at a later age for those born after the mid-1960’s.
Tale #5- I will be receiving an inheritance and don’t need to save more than I already am. If you think you may receive an inheritance, that’s great! Consider how much you know about the inheritance and all aspects of how it will be divided, if there will be a tax consequence (to you), and if there has been planning from the grantor that protects the estate so that you actually receive something. Factors involved could be long term care, debt of the grantor, how long the grantor lives and if it will deplete the estate.
If you’re retired or nearing retirement, you will be faced with the decision as to how to take money from your variable annuity. Different contracts have different rules. One option is annuitizing, with these common options:
Single Life Option. This is a payout for the life of the contract holder only. It offers the highest payout level, but payments stop at death. Nobody else will receive any further payments.
Joint-Life Option. This allows for your spouse to collect a portion of the annuitized payout if you die first. Also called the joint and survivor option the payout will be less than the single life option. Typical options are 50 percent, 75 percent or 100 percent. For example, with a payment of $2,000 per month, the 75 percent option would pay $1,500 to you surviving spouse.
Period Certain Option. Benefits are paid for your life with a certain or guaranteed period typically 10, 20 or 30 years where a beneficiary will receive the remaining payments if you die before the end of the period.
Taxes are due on the portion of the account that is due to gains on your initial investment and will be subject to taxes; the rest will not as it is considered a return of your basis or the amount invested. Other payment options are also available and will have varying tax treatments. Please contact us for help in determining the best option for you.
Don’t Forget Your RMD
As we head towards the end of the year, those of you who are age 70 ½ or older need to be sure that you’ve taken your required minimum distribution(RMD) from IRAs or other tax-deferred retirement accounts. This can also apply to some of you younger than 70 ½ if you were the beneficiary of an inherited IRA account. The penalties for not taking the full amount by the end of the year can be steep. The penalty is 50% of the untaken amount and you will still owe the income taxes that would normally be due.
For those who turned 70 ½ this year and are taking their first RMD you have the option to wait until April 1 of next year. Understand, however, that this will require you to take two distributions next year. This could result in a larger tax hit than you might be expecting so it pays to take a look at this before deciding. A couple of tips to consider this RMD season:
If you are charitably inclined and don’t need some or all of the money from your distribution, you can donate some or all of your distribution to a qualified charity. The limit on this is $100,000. The advantage is that this will reduce your taxable income while helping you accomplish your charitable objectives.
If you are still working and contribute to a 401(k) you do not have to take an RMD on the money in that 401(k) as long as you are not a 5% or greater owner of the business and your employer has made this election. Furthermore, if you have money in an IRA that was originally contributed on a pre-tax basis to the IRA, or rolled over from another retirement plan, you can roll this money into your current 401(k) if the employer allows for this. The benefit is that this money is not subject to the RMD until your leave that employer.
For those of you with an inherited IRA you will need to take an RMD if the original owner was taking RMDs when they died or if you are 70 ½ or older. The amount, however, is based on your age which can allow the account to be stretched for younger beneficiaries. It is important to take you RMD by the end of the year.