Certain unique challenges go along with entering different stages of life. Fortunately, there are resources available to help us address these matters.

If you have worked throughout your life and contributed into the programs, you will be eligible for Social Security and Medicare. The age of eligibility for your full Social Security benefit is between 66 and 67 if you are not already receiving your benefit. The exact date of your eligibility will depend on the year of your birth.

Medicare is a bit different. As the laws currently stand, everyone who has paid into the program sufficiently becomes eligible to receive Medicare benefits at the age of 65.

It is important to note that a high percentage of senior citizens will someday need long-term care. Medicare does not pay for long-term care, which is something you should know because it is very expensive. However, many senior citizents rely on another government program, Medicaid, to pay for long-term care.

Though Medicaid is intended to provide a safety net for people with severe economic limitations, it is possible to qualify for Medicaid to pay for long-term care while still preserving assets if you go about it properly.

Given the intricacies of these programs, it is a good idea to talk with a professional as you are planning for the latter portion of your life. Should you be interested in doing so, simply take a moment to arrange for a consultation with a Northern Kentucky elder law attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

RMDs are an important concept when it comes not only to retirement planning but to estate planning as well.  RMD stands for required minimum distribution — the IRS requires you to take out a portion of your retirement account each year and pay tax on it. If you don’t take it out, you get hit with a penalty.

When do you have to take an RMD?

It depends on the retirement account and plan – many types of plans, such as a 401K, require that distributions begin April 1 following the year that you turn 70 1/2, and you must continue for every year after that.

How much do you have to take?

The amount is based on the previous year’s balance in your retirement plan and on IRS tables that factor in your age, your beneficiary’s age, and your relationship with your beneficiary.   The tables are helpful, but there are also online calculators that can be used to compute the amount.

How do RMDs impact estate planning?

RMDs impact how much of your retirement account will be passed along to your named beneficiaries.  For example:  A Roth IRA does not require RMDs during the account holder’s lifetime, but are subject to RMDs after the death of the owner.

An estate planning attorney can work with you to ensure that all of your estate planning and retirement planning tools work together to meet your specific needs.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.