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When talking with your elder law and estate planning attorney about how to arrange your retirement assets and your estate to best benefit you and your family, you have certain goals. Those goals are set, and beset, with assumptions. With the world economy all but threatening to flatline, those assumptions might be worth revisiting.


There was virtually no inflation in the 1700s and 1800s, though there were many market crashes. During World War I, Western governments learned that they could pay less in real dollars by inflating the currency. Like a crash in the market, a spike in inflation can be devastating, particularly when we are older and likely to need our money more.

“In the long run,” meaning from 1972 to 2012, inflation averaged 3% per year. But between 1972 and 2012 there were two major spikes which do not figure in the calculation of “in the long run.”

During this same period U.S. real estate prices, adjusted for inflation, rose 60%. But we all know what happened in 2007-2008.


Social Security retirement benefits (which will be cut by 21% in 2033) are adjusted based on the Consumer Price Index-Urban. In calculating the Consumer Price Index, the Bureau of Labor Statistics does not include health care. Health care, housing and transportation are the three largest expenses during retirement.


Of the 3.4 million baby boomers born in 1946, 2.1 million are alive today, 70 years later. Do your genes, lifestyle and health history indicate that you should continue working or at least delay taking Social Security retirement benefits? Or do they suggest that you “quit while you’re ahead”?

Every year you delay between your “full retirement age” (66 to 67) to age 70, the maximum age at which you can take Social Security retirement benefits, your annual benefits increase by 8%. This can affect not only your level of comfort during retirement but also your spouse’s survivor’s benefits and Social Security Disability Income for a disabled adult child.

If you continue to work, you may also have health insurance and the opportunity to purchase hospital, catastrophe illness or long-term care insurance through your employer.

If your employer offers a pension (22% of Texans have one) or a 401(k) or similar plan (50% do), you can continue contributing before tax dollars.


You can only make money with what you have left after paying the cost of investing. For this reason many financial planners advise rolling over a 401(k) into an IRA. 401(k)s are governed by Department of Labor rules (the Employee Retirement Income Security Act, or “ERISA.” Inheritance of a 401(k) or IRA by someone other than your spouse could have very different tax consequences.

Tax consequences are different yet again if you roll your 401(k) or similar retirement plan over into a Roth IRA: tax is paid now, but not later.


While fewer retirees are moving across state boundaries, moving not once but twice during retirement is becoming more common. People move first to be able to do more of what they want be it community involvement, recreation or time with the grandchildren. People move next to make it easier to get their needs met. Some, wisely, do so before those needs arise. Others wait for an emergency, limiting their choices.

Texas Christian University professors Charles Lockhart and Jean Giles-Sims’ Aging Across the United States (University Park, Pennsylvania: The Pennsylvania State University Press, 2010) document these two moves across states and reveal the variation in available health and long-term care, and quality of Medicare as well as Medicaid. Since Texas ranks at or near the bottom in all of these categories, you may make your second move to be near a child in another state.

Check the “weather.” Know where you want to go. Then let your elder law and estate planning attorney help you get there.


Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.

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