guide to
REAL ESTATE, BANKING & FINANCE Financing Your Future
Dodging Debt
4 Simple ways to save more for retirement
How young people can avoid the debt trap
Homeward Bound How to save up for your ďŹ rst home
A Blank Slate Media/ Litmor Publications Special Section May 17, 2019
36 REAL ESTATE, BANKING & FINANCE • Blank Slate Media Newspapers, Friday, May 17, 2019
Trusts: A genuine estate planning tool? BY ST E P H E N J . SILVERBERG, ESQ. The Law Office of Stephen J. Silverberg, Esq. The minute I celebrated my 60th birthday, my mailbox filled with invitations for workshops and dinners about Social Security, estate planning, elder law, and Medicaid planning. As a seasoned elder law attorney, I worry about people without the benefit of my legal knowledge: Are they frightened by these ads, which are often more about selling financial products than protecting seniors? Here are the top 10 things seniors need to know before creating a trust for the wrong reasons: 10. Unless your estate is worth more than $11.4 million ($22.8 million for a couple), don’t worry about heirs paying federal estate taxes. The New York state estate tax exemption is $5.74 million ($11.48 million for a couple). 9. If your estate is worth more than the current federal estate tax levels, you should find an attorney knowledgeable about tax planning for high net worth clients. 8. Under federal law, a living trust cannot protect you or your spouse from the costs of nursing care. Only trusts created by will can protect a surviving spouse. Medicaid planning and living trusts are incompatible. If anyone tells
you a living trust will give you Medicaid protection, call me and I’ll explain. 7. If you own your home jointly with your spouse, it has crucial creditor protections in place and is an exempt asset for Medicaid eligibility purposes. If you transfer it to a living trust, it loses both its creditor protection and Medicaid exempt status. Don’t put your house in a trust without first meeting with an experienced elder law attorney. 6. Trust-marketing companies want you to believe that probate is something to fear and to avoid. Real reasons to avoid probate include a childless person with relatives spread out across the
country, disinheriting a child, or a second marriage where there is no pre-nuptial agreement. In some states, the probate process is complex and micro-managed by the courts. For most people, especially those in Nassau or Suffolk Counties, probate is nothing to fear. Once the executor is appointed, there is no further court involvement. It is a process where a court decides that your will and estate plan comply with the law. That’s all. Medicaid and routine estate planning are not reasons to spend much money on avoiding probate. 5. Probate differs from estate administration, which you must do whether
you have a will or a trust. Assets must be valued, debts paid, and distributions made to your beneficiaries. The cost of preparing a living trust is usually higher than preparing a comparable will. 4. Hard sell seminars presented by professionals you do not know about complicated trusts you don’t understand are never a good idea. Ideally, families should work with an estate planning attorney who can help them plan for their futures and incapacity. 3. Many kinds of trusts serve a variety of purposes. There’s no such thing as a “one-size-fits-all” trust. An estate planning professional needs to first understand your entire situation before making a recommendation if you need a trust and what kind of trust you need. 2. Many attorneys will give you a free consultation to discuss your goals before you hire them to work on your estate plan. That gives you a chance to meet with them, see how they work, and make sure you are both suited for each other. 1. If a company solicits you with a hard sell, enjoy the dinner and walk away. Your estate plan, will, and legacy is too important to put at risk by a sales pitch. Stephen J. Silverberg, Esq. is a nationally known estate tax and elder law attorney. You can learn more about him at www.sjslawpc.com.
Herricks Teachers Receive Recognition
Amy Halpin
Herricks Teachers Receive Tenure Joe Welsch
Minea Afework, Andres Baracaldo, Josephine C. Bruno, Leigh T. Candalino, Lyndsey R. DeSarbo, Kara L. Faherty, Deirdre Kenny, Andrea Kosofsky, Christina Macri, Carol Manning, Lisa Ann Meyer, Emily Vlachos Onesto, Lindsey H. Quenqua, Jessica Ras, Tabassum Syed, Danielle T. Valentini
Special Education Parent Teacher Association (SEPTA) recognized teachers in Herricks for their encouragement, sensitivity and compassion toward students. 2019 SEPTA Honorees: Joseph Welsh, Physical Education Teacher, Middle School Lisa Parisi, Gemini Teacher, Denton Avenue Elementary School Michael Timms, Social Studies Teacher, High School Jean Karo, Speech/Language Teacher, Searingtown Elementary School Amy Halpin, Special Education Teacher, Center Street Elementary School
Herricks Teachers’ Association
Jean Karo
Lisa Parisi, left and Michael Timms, right
Blank Slate Media Newspapers, Friday, May 17, 2019 • REAL ESTATE, BANKING & PERSONAL FINANCE
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How to save up for your first home H
ome ownership is a dream for people across the globe. Many people save for years before buying their first homes, squirreling away every dollar they can with the hopes they can one day become homeowners. But thanks to factors beyond their control, even the most devoted savers can sometimes feel like their dream of home ownership may never come true. According to the Pew Research Center, American workers’ paychecks are larger than they were 40 years ago, but their purchasing power is essentially the same. Things aren’t much different in Canada, where analysis from Statistics Canada and
the Bank of Canada has shown that, since 2015, wage growth in Canada has been weaker than in the United States. Various challenges can make it difficult to buy a home. However, some simple strategies can help prospective home buyers build their savings as they move closer to the day when they can call themselves “homeowners.” Determine where your money is going. If you’re finding it hard to grow your savings, audit your monthly expenses to determine where your money is going. Using exclusively debit or credit cards can simplify this process, as all you need to do is log into your accounts
and see how your money was spent over a given period. If you routinely use cash to pay for items, even just to buy coffee on the way to work, keep a notepad handy so you can jot down each expense. Do this for a month and then examine how you spent your money. Chances are you will see various ways to save, and you can then redirect that money into your savings account. Become a more savvy grocery shopper. Another great way to save more money is to alter something
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you already do each month: grocery shopping. If you haven’t already, sign up for discount clubs at your local grocer. This is a largely effortless way for shoppers, especially those buying food for families, to save considerable amounts of money. Shopping sales at competing grocery stores also can save money. Dine in more often. The U.S. Department of Agriculture says that Americans spend, on average, 6 percent of their household budgets on food. However, the USDA
also notes that Americans spend 5 percent of their disposable income on dining out. If these figures mirror your spending habits, you can nearly cut your food spending in half by dining out less frequently. That might be a sacrifice for foodies, but it can get you that much closer to buying your own home. Saving enough money to purchase your first home is a worthy effort that can be made easier by employing a few budget-friendly strategies.
38 REAL ESTATE, BANKING & FINANCE • Blank Slate Media Newspapers, Friday, May 17, 2019
4 simple ways to save more for retirement I
t’s never too early to begin saving for retirement. While millions of people have no doubt heard or read those very words before, surveys indicate that few people are taking that lesson to heart. A 2018 survey from Bankrate.com found that 20 percent of Americans don’t save any of their annual income. Things aren’t necessarily rosier in Canada, where the financial institution CIBC reports that 32 percent of people nearing or on the cusp of retiring have nothing saved for retirement. Saving for retirement
can seem impossible in households where every dollar counts. But the following are four simple ways to save more for retirement without making dramatic lifestyle changes.
1. Turn raises into retirement savings. According to the WorldatWork 2018-2019 Salary Budget Survey: Top Level Results, salary budgets in the United States are projected to rise by an average of 3.2 percent in 2019, while those in Canada are expected to rise by 3 percent. Working professionals can save more
for retirement by converting some or all their raises into retirement savings. Pre-tax retirement accounts allow working professionals to put aside money before taxes are paid, so weekly paychecks will not be greatly affected if you choose to increase the percentage of your income you deposit into such accounts. Do this each time you receive a raise and your retirement savings will grow considerably.
2. Put bonuses to work. Professionals who receive bonuses can speak to their employer and request that their retirement contribution rates be increased when bonuses are issued. Many 401(k) retirement plans allow workers to contribute
as much as 80 percent of their paychecks. While that’s not sustainable for most people every pay period, increasing your contribution rate dramatically when your bonus is issued is a great way to save more for retirement. Contribution rates can then be returned to normal the following pay period.
3. Downsize your home. Empty nesters nearing retirement age may benefit by downsizing their homes. Doing so can reduce utility bills, property taxes and other expenses, and those savings can then be redirected into retirement accounts.
4. Reinvest tax returns. Working professionals accustomed to receiving tax returns can use that money to catch up on their retirement savings. Rather than spending tax returns or depositing them into traditional savings accounts, reinvest them into a retirement account. Speak with a financial planner to help you figure out how to accomplish this goal. Even if it requires opening a new account, the longterm benefits or reinvesting returns are substantial. Saving for retirement is important, and it’s never too late or too early to start setting aside more money for your golden years.
How young people can avoid the debt trap R
ites of passage come in many forms. Some are religious ceremonies marking an important stage in a person’s spiritual life, while others are less ceremonial but still impactful. For many young people who are old enough to vote but not necessarily old enough to live completely independent of their parents, digging oneself out of debt is an early financial rite of passage. But youth and debt need not go hand in hand, even though statistics suggest otherwise. According to the Federal Reserve, student loan debt reached historical highs in the first quarter of 2018, surpassing $1.5 trillion for the first time ever. That figure is even more staggering when compared to figures from a decade ago, when
total student loan was about $600 billion. And it’s not just student loan debt that’s jeopardizing young people’s financial futures. Consumer debt compiled through the use of credit cards has long been a thorn in the sides of young adults, many of whom apply for credit cards before they fully understand the concept of credit, only to learn the hard way that swiping credit cards comes at an oftentimes steep cost. But while the young people of yesteryear might have landed in debt by using credit cards for nonessentials like a night out with friends, a recent survey from the professional services firm PwC found that young adults currently between the ages of 25 and 34 are more likely to buy day-to-day essentials with credit. In fact, 20 percent admitted to doing to so in the past six months, compared with just 6 percent of adults age 55 and over. That could be due to
a number of factors beyond young adults’ control, including low and stagnant wages, but it also might be a byproduct of young adults not knowing how to avoid debt. If it’s the latter, then young adults can try to employ the following strategies to avoid falling into the debt trap. Explore your repayment options. According to Student Debt Relief, a private company that looks to educate and empower consumers about student loan debt, the average college graduate in the class of 2016 had $37,172 in debt. That’s nearly $10,000 more debt than the average graduate from the class of 2011. Young adults struggling to repay their student loans can explore various options, including federal student loan repayment plans, such as the Pay As You Earn plan and the Income- Based plan. Each plan is different, but young adults should know that they have many repayment options. Avoid consumer debt. Interest rates on credit cards can be high,
especially for young people without lengthy credit histories. As a result, it’s best to only use such cards for emergencies and not to pay for nights out with friends or a new pair of shoes. Consumer debt that’s not paid off in full each month also can adversely affect young adults’ credit ratings, which can hurt them when they get older and look to buy their own homes or other big-ticket items. Live at home. While many college graduates want to maintain their independence and live on their own after graduation, moving back in with mom and dad might be the most financially savvy move to make. Doing so allows young adults with jobs to begin building their nest eggs and can help them avoid having to use credit cards to meet their dayto-day needs. Debt ensnares many young adults. But there are ways for young people to avoid debt and pave the way for a bright financial future.