10. Should I Consult With a Professional?

1. Your Retirement Vision
2. Estimate Your Retirement Expenses
3. Paying for Health and Long-term Care
4. Your Defined Benefit Pension
5. Social Security Benefits
6. Estimate How Long Your Resources Will Last
7. Drawing Income from Tax-Advantaged Accounts
8. Managing Taxes
9. Manage Your Investments
10. Should You Consult Professionals?

While you may be able to do some basic retirement and investment planning, you may find that there are many complex decisions to make. For public employees, there may also be questions related to retiring while still relatively young, beginning second careers, and having multiple retirement income sources. Instead of handling all these matters on your own, you may decide to seek the guidance of a professional. Each of us is unique and only a professional can sift through your specific circumstances to help you develop a plan that meets your particular needs.

Consulting With A Financial Planner

Although most of us can do our own retirement planning, there are times when we could benefit from the services of a professional financial planner. Some complex matters can be overwhelming, and you may not have the expertise to deal with them alone. An objective third-party perspective on difficult decisions can be helpful. And it can be reassuring to have a knowledgeable person on your side.

A financial planner can be an objective source to help you understand all the financial issues you face to successfully manage your retirement income.

When hiring a financial planner, seek one who has earned the Certified Financial Planner™ designation. This means he or she has passed a rigorous certification process that includes education, experience and ethical requirements.

Be aware that any investment salesperson can claim to be a "financial planner" and that not all financial planners are "certified." Only those financial professionals who have fulfilled the certification and renewal requirements of the Certified Financial Board of Standards can use the CFP® certification mark.

It is also important to find out how a planner is compensated. Those who are compensated by commissions or other payments from selling or recommending financial products may have a difficult time separating their need for a commission from their obligation to serve your best interests. This means that "free" financial services from a person selling or recommending products can be remarkably costly. Investment salespeople and brokers are obligated to recommend legally suitable investments; however, they are not fiduciaries who must always put your best interest ahead of their own.

ICMA-RC employs a team of salaried Certified Financial Planner™ professionals who specialize in the unique considerations of public sector employees. For more information about working with an ICMA-RC CFP®, please call toll free at 800-669-7400. In addition, the Financial Planning Association has a useful online guide to help you interview a financial planner, at www.fpanet.org/public/tools/tenquestionschecklist.cfm. Remember that while a financial planner is there to help, you are responsible for the final decisions and should always be in charge of your finances.

Consulting with an Estate Attorney

Retirement planning and estate planning are interrelated. Decisions you make during the time you transition to retirement can affect your estate. Many books and Web sites exist to help a person do his or her own estate planning. Some of these resources have value as aides in identifying and making critical decisions that cannot be delegated to an attorney or anyone else. But do-it-yourself estate planning is risky.

Implementing an estate plan involves legal details and documents such as wills, trusts, and powers of attorney. It brings up technical legal matters, such as alternate ways to title property, beneficiary designations, community property, and others. Since each state has its own probate law for settling estates, legal documents should be prepared by a qualified attorney in your own state after detailed consultation with you.

Even though it is a good idea to involve an attorney in your estate planning, it is essential for you to be prepared to answer key questions about your desires for your estate when you meet with your attorney. Many lawyers will have checklists or questionnaires you can use to help consider questions and hypothetical circumstances that may not have occurred to you, many of which may not be pleasant to contemplate. The Financial Planning Association has an estate planning summary checklist available online at: www.fpanet.org/public/tools/estate_planning_checklist.cfm.

Keep in mind the following about an estate plan:

It is not irrevocable. You can adjust and change your plan as your life changes.
If you move, be sure to have your plan reviewed. Each state has its own laws governing estate matters. Some states have estate taxes.
Laws change. It is a good idea to monitor how new or revised laws can affect your estate plan.

Your estate plan may include the following:

Preparing a will and/or setting up a trust to direct the distribution of your assets
Designating one or more persons to administer the terms of your will
Naming someone to act on your behalf if you are disabled and cannot supervise your own personal and financial affairs
Naming a person or persons to care for your minor children and other dependents, including managing their money
Calling for essential documents and records to be filed so they will be found upon your death
A living will to record your wishes for health care, including end-of-life care, if you are unable to make decisions yourself

Could your estate be subject to estate taxes? Although federal and state estate taxes are often the focus of much attention in financial plans for the wealthy, most estates do not trigger such taxation. The federal estate tax is scheduled to be repealed for one year, 2010, but then is scheduled to return. Federal and state estate tax laws will undoubtedly be changed, so be sure to monitor how these changing laws may impact your estate plans.

Because of the uncertain future of estate tax laws, if you have a gross estate that may be worth more than $1 million, you should consult with an attorney in your state. Many legal strategies are available to minimize the impact of estate taxes, including gifting and the use of various trusts.

Naming Beneficiaries

The remaining assets in a retirement account upon the death of the owner are not directed by the terms of a will or trust. Instead, the beneficiary named in the plan determines who gets any money left in IRAs, deferred compensation accounts, qualified retirement accounts, pension survivor benefits, and life insurance and health savings accounts. If you don’t name a beneficiary, federal or state law or the plan’s rules determine who receives the remaining assets at the time of your death.

Under federal law, an account owner’s spouse is the primary beneficiary of qualified retirement plans unless the spouse signs a document approving a different beneficiary. This rule also applies to IRA beneficiaries and in community property states (Arkansas, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin).

If the retirement account owner is not married and does not name a beneficiary, the estate is generally the default beneficiary.

Naming beneficiaries should get the same careful consideration that goes into preparing a will. Because choosing the right language is critical, you may want to consult with an estate attorney. Find out if your financial institution or plan administrator will accept your specific designation language. If not, you may want to consider moving your account to an administrator that will.

Congratulations!

The transition from work to retirement is one of the biggest changes you will ever make. You are making choices that will influence the rest of your life. This booklet is intended to help you consider these important decisions by considering 10 critical questions.

Getting ready can be complicated, fun, challenging, rewarding…and even a bit frightening! Thoughtful planning is vital. Decisions that you make as you move from your working years into your retirement years are among the most important of your life. Planning is what helps you get the most from your retirement benefits and savings so you will have the retirement you deserve.

It’s your retirement…you’ve earned it. Congratulations!

Resources

Where to go for more information

Your retirement plan should provide a basic road map for attaining your financial retirement goals. Here are some suggested additional resources:

As an ICMA-RC client, you can obtain a "benefits illustration" for your 457 plan, which considers special circumstances such as increasing your contributions by a certain percentage or dollar amount each year or using the catch-up provision. For more information, ask your local representative or call us toll free at 800-669-7400 and ask about a "benefits illustration."
By calling the toll free the number listed above, you may also obtain copies of the following brochures:
Making Sound Investment Decisions: A Retirement Investment Guide
Investing For Retirement Goals: A Summary of Your Deferred Compensation Retirement Plan
Present and Future Benefits: A Summary of Your Money Purchase Plan
Building Your Portfolio: A Guide to Asset Allocation
Vantagepoint Funds Prospectus
For general information on Social Security and Medicare and to request your Social Security statement, call toll free 800-772-1213 or visit www.ssa.gov.
ICMA-RC’s Web site at www.icmarc.org has several investing and retirement calculator tools and information to help you with your financial and retirement planning. You may also access the Internet sites for Social Security and Medicare information from this site.
You may want the help of a financial planner. ICMA-RC employs a team of salaried Certified Financial Planner™ professionals who may be able to help you with your retirement planning for a modest fee. Call toll free 800-669-7400 for information on this service.