Focus on Finance: Affording Care with Bridge Loans in Florida

A Major Tax Shift Is ComingThere is a big change coming to estate taxes. If Congress does not act, the federal estate tax exemption will be reduced by nearly half on December thirty first, two thousand twenty-five. This means families could lose millions of dollars to federal estate taxes if they do not plan ahead. In this article, we will explain what the estate tax exemption is, what is changing, and how Pennsylvania families can protect their legacy.What Is the Estate Tax ExemptionThe federal estate tax exemption is the amount of money you can pass on to your heirs without paying estate tax. If your estate is below this amount, it is not subject to federal estate tax. If it is above the exemption amount, your estate could owe up to forty percent in taxes on the amount that goes over the limit.What Is Changing in Two Thousand Twenty-FiveUnder the two thousand seventeen Tax Cuts and Jobs Act, the exemption amount was temporarily increased. That law will expire at the end of two thousand twenty-five. If Congress does not pass a new law, the exemption will go back to earlier levels, adjusted for inflation.Here is what that looks like:Current exemption in two thousand twenty-four About thirteen point six million dollars per person About twenty-seven point two million dollars per married couple Starting in two thousand twenty-six About six point eight million dollars per person About thirteen point six million dollars per married couple This is a decrease of approximately six million dollars per person. Any estate over the new limit could face a tax rate of up to forty percent.Who Should Be ConcernedIf your estate includes real estate, investment accounts, life insurance, retirement accounts, or business ownership, you may be affected by this change. Even if you are under the current exemption, your estate could grow over the next few years and push you above the new lower threshold.Families who have worked hard to build generational wealth need to take this seriously. Without a plan, your heirs could be forced to sell assets or lose a large portion of their inheritance to the government.How to Reduce or Eliminate Estate TaxesThere are many legal strategies available to reduce or avoid estate taxes altogether. At Entrusted Legacy Law, we create personalized plans using tools such as: Irrevocable trusts Lifetime and annual gifting strategies Charitable giving Family limited partnerships Business succession planning Life insurance trusts Each plan is built around your specific goals and financial picture. With the right approach, families can preserve more of their wealth and pass it on to the people and causes they love most.Timing Matters Why You Should Act NowThis is a rare window of opportunity. Right now, the higher exemption is still available. Acting now allows you to use that higher amount and lock in significant tax savings for your estate. Waiting until two thousand twenty-six could mean missing out on millions in tax-free transfers. We encourage families to plan ahead, not wait for Congress to act.Your Family Deserves to Keep What You BuiltYou worked hard to build your legacy. Do not let estate taxes take it away. With proper planning, you can protect your loved ones, minimize taxes, and make sure your assets go exactly where you want them to go. Let us help you make that happen.Schedule Your Free Legacy Planning SessionNow is the time to act. Our experienced estate planning attorneys are here to guide you with a heart-centered, family-focused approach. We work with clients across Pittsburgh, Philadelphia, and Erie. Schedule your free consultation today: https://book.entrustedlegacy.law/#/introcall  

The decision to invest in a senior living community is not always an easy one to make. However, paying for the services available can be very beneficial, especially as you grow older. Retirement communities that offer a continuum of care support individuals through various stages of life and accommodate unique and ever-changing needs. Here, St. Barnabas looks at the benefits of senior living and why its a worthwhile expense.Continuum of CareStart by thinking ahead and figuring out what your investment might mean in the future. Aging adults with evolving needs benefit from retirement communities that provide multiple levels of assistance. If youre a young, active retiree who is looking forward to making the most of every day in retirement, you can find what you need in an independent living community. Independent living communities combine the convenience of secure, upkeep-free living centered on your needs with the independence that you typically enjoy at home.If you or a loved one needs greater support for daily activities, accommodations with living assistance may be more ideal. Attendants provide 24/7 assistance, allowing residents to live as independently as they can while receiving more hands-on care for chronic illnesses and other conditions. Services may include: Regular safety checks Physical transfer assistance Ostomy and catheter care Incontinence support As health needs change, more in-depth services may be needed and can easily be accessed in a community that offers a broad range of support. Retirees who need short-term or long-term rehabilitative care can find it through skilled nursing services. Skilled nursing services are available for individuals who are recovering after a stroke, an injury, joint replacement surgery, or another event that may require access to a team of medical professionals to help them on the road to recovery.Balancing the Comforts of Home with Community EngagementWhile researching retirement communities, making sure your prospects feel like home is important in determining if paying for senior living is a worthwhile expense. Comfortable accommodations and a variety of amenities can help make the transition from home life to a senior living community easier.  Whats more, programming and social activities that keep residents active and meaningfully engaged with their neighbors can help make retirement life feel fulfilling. Some of the amenities to look for while searching for a retirement community include: Nutritious and delicious meals Calendar of social activities and special events Scenic grounds with opportunities for outdoor recreation Exercise centers and fitness classes Easy access to shops, movie theaters, and more Learn More from St. BarnabasAt St. Barnabas, we understand that your needs may not be the same today as your needs tomorrow or 10 years down the road. We offer several senior living options that support varying levels of need, including comprehensive care services. St. Barnabas proudly supports residents in the greater Pittsburgh area, including Allegheny, Beaver, and Butler counties. To learn more about our senior living services and how they support a continuum of care, contact us today.

Financial retirement strategy can be difficult. Saving for retirement (accumulation) is only half the battle the real challenge begins when it's time to turn that savings into income that lasts (distribution). Ive found that many of those that do well during the accumulation phase have little idea what to do during the distribution phase. In Tom Hegnas great book, Pay Checks and Play Checks, he addresses this by looking at risks that every senior must think about and mitigate during the distribution phase of their financial retirement strategy. Have you thought through these risks and planned accordingly?Inflation riskYou may be in danger if this characterizes you: Im so scared of the stock market and losing money that Id rather just keep all my money somewhere safe like a savings account.             Inflation is a virtually guaranteed to eat away at the purchasing power of your retirement savings. That means that whatever money you currently have saved for retirement wont be able to buy nearly as much in 10 or 20 years as it can now. Inflation has surged in recent years, with some years nearing 67%, reminding us how quickly prices can rise and purchasing power can shrink. Lets look at some numbers and imagine you have $100,000 in a savings account that offers virtually no growth. If we estimate an annual inflation average of 3% for the next 20 years, your same $100,000 would have the equivalent purchasing power of $55,368 in todays dollars. In other words, letting $100,000 sit without growing for 20 years is like giving up nearly half your purchasing power thanks to inflation quietly eating away at it year after year.Application: You should consider investing your retirement savings in something that will at least outpace inflation (something that will earn 3-4% or more).Longevity riskYou may be in danger if this characterizes you: I have some money in my retirement savings, but I havent really thought through a plan for withdrawing it. I figure Ill just withdraw money as needed and I should be ok.             As people live longer, our retirement savings must last longer as well. With average life expectancy in the U.S. near 80 and normal retirement at age 65, some plan for their savings to last 15 years. However, since 80 is the average life expectancy, many will live beyond that. Statistics also say that if youre married, you have a better chance to live longer. If you have a husband and wife who are 65, there is a 50% chance that one of them will live to age 92. To be safe, it would be wise to at least plan for your retirement savings to last 25-30 years. To help accomplish that, many financial advisors suggest following the 4% rule. (Some adjust it to the 3% rule to be extra cautious). That is, that you should only withdraw 4% of your retirement savings in the first year of retirement and then adjust annually for inflation. That may seem extremely cautious, but the last thing you want to do is run out of your retirement savings at age 91. What options would you have then? Longevity is also a risk multiplier because the older you live, the greater the chances that you will face large health and financial risks that could devastate your retirement savings.Application: It may be wise to consider utilizing a vehicle like an income-focused annuity that is designed to stretch your retirement savings and provide lifetime income that will last as long as you do.Volatility riskYou may be in danger if this characterizes you: I know that I must risk my retirement savings if I want to see it grow. Therefore, I keep all my retirement savings in market-based products like mutual funds, stock, bonds, etc.             Relying completely on the long-term upward trend of the market makes sense for the 30-year-old still in the early years of the accumulation phase of financial retirement strategy. However, for the 65-year-old transitioning into the distribution phase of financial retirement strategy, more caution is advised. At that point, you have much less time to make up for large losses that come with market volatility. If you are wealthy, with hundreds of thousands of dollars in safe investments--by all means, risk larger portions of your retirement savings in market-based products with the hope of earning more. However, if you only have a few hundred thousand dollars (or less) in your retirement savings, you need to seriously consider volatility risk. And be careful when people speak of diversification being the magic bullet with your market-based retirement savings. Yes, diversification is good. But if all your diversification is in market-based vehicles and the entire market takes a dive, what happens then? Was that really true diversification? A simple rule of thumb you can use is the rule of 100. (Some call it an oversimplification, but it can be a good quick reference and starting point). Subtract your age from 100 to determine the percentage of your retirement savings allocated to volatile investments, with the remainder going into safe investment vehicles. For example, a 70-year-old would allocate 30% of her savings into risky, market-based investments while allocating the other 70% into safe retirement vehicles. What does your retirement savings allocation look like when using the rule of 100?Application: Its wise to consider protecting more of your retirement savings as you get older. The more money you have, the more money you can risk in volatile investments. However, if you only have a few hundred thousand dollars (or less) in your retirement savings, you may want to consider being more conservative when it comes to volatility risk.Order of return riskYou may be in danger if this characterizes you: Im ok having a large amount of my retirement savings at risk to market fluctuations when Im near retirement age. I can always reallocate to safer options later.             During the accumulation phase of financial retirement strategy, the focus is on average return from your investment over a period of years. However, once you begin the distribution phase, the rules change. Studies show that experiencing a large loss from a market downturn in the years immediately before and after retirement have a much larger negative impact on how long your savings last than experiencing a similar loss at the end of your retirement years. To illustrate this, lets look at an example. Imagine Person A and Person B both retire and begin taking distributions at age 65, live to age 90 and see their retirement savings grow at the exact same rate of return over those 25 years. However, Person A experiences a large loss from market downturns at the beginning of retirement while Person B experiences a large loss from market downturns at the end of retirement. The studies show that Person A is in much bigger trouble than his counterpart and will likely see his retirement savings depleted years earlier.  When will the next market crash happen? No one knows but its a risk that should be seriously considered.Application: What some refer to as the golden window or Retirement Red Zone is around 5 years before retirement and 5 years after retirement. Experiencing a large loss from a market downturn in those years could be devastating to your financial retirement strategy. Therefore, its wise to consider protecting a large portion of your retirement savings during those critical years. Retirement should mean freedom to do the things you want to do. When it comes to financial retirement strategy, these are just a few of the main risks that everyone must navigate in order to most experience that freedom. You worked hard to save and accumulate your retirement savings. Once retired, you must work hard to educate yourself and make wise decisions so that your retirement years can be as relaxing and enjoyable as possible. Find someone you trust, that you can talk with about your specific situation and mitigating these risks. Make sure theyre looking out for your needs and not just their own. I wish you the best and heres to a great retirement!