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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Category Archives: Social Security

    Striking a Balance Between Funding Your Retirement and Your Child’s Education

    Many parents perceive a conflict between funding a child’s college education and building their own retirement nest egg. The conflict usually arises from the lack of financial resources to do both while funding daily living expenses, so parents become stuck between priorities and usually wind up doing nothing at all.

    One of the things Meier Law Firm can help you do is sort out your priorities in a way that supports your family for the long-term. With that in mind, here are some guidelines on striking a balance between saving for your retirement and your child’s education:

    Build an emergency fund first. This should be 3-6 months of living expenses that you have saved to fall back on in an emergency. If you don’t have it, you will likely be forced to raid your 401(k) or other retirement account, spending more for penalties and taxes to cover the cost of the emergency.

    Saving for college or retirement?Save for your retirement or build a business to fund your retirement second. It is difficult for many parents to accept that they may not be able to fully fund a child’s college education, but consider the alternative. You aren’t being “selfless” if you spend what you should have saved for retirement or to create a business to fund your retirement on a child’s education, and then run out of money right when your kids are having their own families and trying to save for their own retirement. Then you will be financially dependent on them – just what you (and they) don’t want. There’s a reason there are loans for education but not for retirement.

    Save for your kids’ college education last. Only after you have funded your emergency stash and your own retirement accounts (or built a business to fund your retirement) should you funnel cash to a child’s education fund. If you invest in a 529 college savings plan, the earnings grow tax-free. Also, other people in your child’s life — like grandparents and generous aunts and uncles — can contribute as much as $14,000 per year (annual gift tax exclusion) to a child’s 529 plan.

    If you would like to learn more about strategies for getting your financial future in balance, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for an Achieve Your Dreams Planning Session, but because this planning is so important, we’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call your Newport Beach trust and estate planning attorneys at Meier Law Firm today at 949.718.0420 and mention this article.

    Lowest Ever Social Security Increase for Newport Beach, California Families

    The increase is among the lowest since
    automatic annual adjustments were adopted in 1975. It reflects relatively low
    inflation over the past year.

    At a mere 1.7%, Social Security
    will see its lowest increase ever come 2013. What does this mean for seniors
    Seniors with Boat

    The COLA is the Cost
    Of Living Adjustment added to Social Security annually,
    based on inflation and increases in the Consumer Price Index (CPI.) For some
    seniors, planning for the new year means planning around the COLA and hoping
    for the best. Alternatively, a reduction or a weak increase in COLA may mean
    seniors will need to make up the difference out of savings. Nevertheless, the
    CPI is an imperfect indicator and a debated one as well.

    This matter was taken up
    recently by USA Today in an article
    titled “Social Security benefits to rise 1.7% in

    In conjunction with the small
    Social Security increase and the uncertainty of taxes for next year, you may
    want to brush up on what could happen in 2013. 
    A recent Forbes article titled
    Social Security Benefits To Rise 1.7%; Workers
    Face Up To $2425 Payroll Tax Hike
    may offer some knowledge on these very
    important changes. Seek appropriate counsel if you have further questions about
    your benefits.

    Contact your Newport Beach, California Estate Planning Attorneys at Meier Law Firm to discuss estate planning for your family.

    References: USA Today
    (October 16, 2012) “Social Security benefits to rise 1.7% in

    Forbes (October 16, 2012) “Social Security Benefits To Rise 1.7%;
    Workers Face Up To $2425 Payroll Tax Hike

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