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risk. But it must be a smart, calculated you’ll be looking at a reduced benefit of sophisticated. It is important to make an
risk, which means being broadly diversi- approximately 75% of the amount you’re assessment of the ability of each of your
fied. Most medical professionals have a eligible for. Full retirement age depends on children to manage the property, and then
high tax bracket, so investments need to your year of birth. You can also delay your decide whether to leave the bequest out-
be tax sensitive. Two strategies: (1) keep filing past full retirement age. For each year right or in trust.
turnover low and (2) keep tax-inefficient you delay your benefit, up until age 70,
investments in retirement accounts (NOT your benefit will grow 8% enabling you to Estate planning also allows you to make
in taxable accounts). receive a maximum of up to approximate- decisions that your loved ones carry out
ly 132% of your regular benefit amount. while following legal directives in your

One effective strategy that many overlook Delaying your filing will clearly leave you estate plan. An advance healthcare direc-
is converting tax-deferred funds to a Roth with more money on a monthly basis, but tive, also known as living will, is a legal
IRA or Roth 401(k). While the conversion you need to consider whether it will mean document in which a person specifies what
amount is taxable in the year it is convert- getting the most money on a lifetime ba- actions should be taken for their health if
ed, the upside is these Roth accounts let sis. If you don’t expect to live very long they are no longer able to make decisions
your retirement savings grow tax-free and because of health issues or your personal for themselves because of illness or inca-
are not taxable when withdrawn (as long family history, then it could make more fi- pacity. In a power of attorney (POA), the
as you’re 59½ or older and have owned a nancial sense for you to claim benefits at principal (you) names one or more agents
Roth for at least five years). It’s important full retirement age or even sooner in order (often an adult child) to act on your be-
not to let the upfront tax bill prevent you to receive the highest lifetime payout. half. You need a POA, because someone
from moving your retirement funds from needs to manage your assets, pay bills, and
accounts that are taxed to tax-free accounts To maximize Social Security benefits for make decisions if you become incapacitat-
no matter when you take them out. The you and your spouse, you need to know ed. The alternative is for your loved ones
point is to not be shortsighted at the ex- which of the separate claiming strategies to ask a court to declare you incompetent
pense of being hit with large tax payments for married couples is right for you. Max- and appoint someone to act on your behalf,
in retirement. imizing Social Security benefits isn’t easy known as guardianship in most states. One
as there are hundreds of rules governing of the primary goals of estate planning (in
Using Health Savings Accounts and Flexi- payments alone. addition to minimizing estate taxes) is giv-
ble Savings Accounts for medical expenses ing the surviving family members and ben-
are also strategies that should be explored Planning your estate is the final area every- eficiaries less stress and some privacy.
and utilized. one needs to think about for successful re-
tirement planning. Estate planning will en- Retirement can be a time of freedom, en-
Maximizing your Social Security income sure that your physical assets, investments, joyment, and security without significant
is another building block for retirement. cash, etc. are transferred to your beneficia- stress and distractions, but in order to
United Income, a financial-planning advi- ries with minimal legal and tax complica- achieve these things, retirement needs to
sory service, released an important study tions. To ensure that your estate does not go be planned for. Those who follow a specif-
in 2019 called, “The Retirement Solution through probate, you need to create a will ic financial plan can expect to have better
Hiding In Plain Sight.” Using government and consider the option of using a trust. average returns and long-term success in
data and proprietary software, it calculates You could look to establish a few trusts as retirement than those who do not.
how much money retirees have lost, and part of your estate plan: Disclaimer Trusts
are losing, by making mistakes about when (protects parents), Dynasty Trusts (protects
®

to start claiming Social Security benefits. kids), and IRA Trusts (protects kids). Es- David Rosenstrock, CFP
This study found that 96% of retirees are tate planning is also essential to protect is the Director and
leaving up to $111,000 behind per house- your estate from creditors and unnecessary Founder of Wharton
hold by claiming Social Security at the family feuds. Wealth Planning, LLC
suboptimal time. The majority of retirees (www.whartonwealth
choose to begin receiving Social Security Most of us understand why minor children planning.com). He earned
payouts within a few months after turn- and young adults shouldn’t inherit proper- his MBA from the Whar-
ing age 62 or immediately after they stop ty outright. Someone with more maturity ton Business School and B.S. in econom-
working, even though it is generally bene- and experience needs to manage the assets ics from Cornell University. He is also a
ficial to delay the benefits. and make spending decisions. That’s why Certified Financial Planner. David lives
for minors and young adults, inheritances in New York with his wife and their two
Because everyone has a different situation routinely are left in trusts at least until the very active children.
and there are many strategies available, minors are older. Too often, however, peo-
you should determine what’s best for you ple overlook the benefits of leaving assets
based on your age, life expectancy, income in trust for adult children instead of having
needs and other retirement assets. A few them inherit the property outright.
small mistakes can take a big hit on your
golden years. There are risks to leaving wealth outright,
even to grown children and there are ben-
The earliest age you can sign up for Social efits of using inheritance trusts to hold
Security is age 62, but if you file before bequests for them. Reaching a particular
full retirement age (as defined by the IRS), age doesn’t mean someone is financially

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