Law Office of Paul Black - January 2019


Make Your Savings Last

When it comes to retirement and finances, there is enough material about saving to fill a library. You see commercials on TV showing one tiny domino gradually becoming a massive tower, you hear advice from coworkers and family members, and you read books and articles on the topic. Much less attention, however, is paid to how to spend those savings once you are actually retired, even though it is a significant part of the equation. After all, it does not matter how much you save if you blow it all in a year. Here are a few considerations to keep in mind as you begin chipping away at that nest egg. HOW MUCH TO SPEND The easiest way to budget for your retirement is with a level spending plan. In this system, you simply estimate how many years your retirement will last and divide

your savings by that number. It is better to make a generous estimate rather than a conservative one. A survey of financial planners conducted by the American Institute of Certified Public Accountants (AICPA) found that outliving savings is the No. 1 concern of those approaching retirement. Underestimating your life span is an easy way for this fear to come true. Of course, a level spending plan assumes that your financial needs will not change over the course of your retirement. If you are the type of person who regularly meets and exceeds your budgeting goals, you can probably make it work. If not, you may want to consider a plan that allocates more money with each passing year of retirement. In the event of increased medical costs or other later-life expenses, an escalating plan provides a financial safety net.

WHAT TO SPEND ON Some of your spending choices will come down to personal preference and interests, but you might be surprised to learn that one category of spending consistently proves more fulfilling than others. Professor Michael Finke of The American College surveyed nearly 1,500 retirees and found that spending money on leisure activities and experiences caused the lowest rate of regret. Finke calls this “social spending” and surmises that it is favored because it encourages older adults to get out into the world and enjoy their retirements. There is no perfect plan for how to spend your savings during retirement. But there is one very wrong way to go about it, and that is mindlessly. However you choose to spend your savings, make sure you have a plan.

Asked and Answered: A Legal Advice Column

Dear Paul,

Dear Waitin’,

do not give up. Rather, consult with an attorney who specializes in insurance coverage disputes. (I am happy to provide a referral to a great one). This attorney will evaluate all of the policy details, facts, and applicable law. If the attorney thinks you have a potential case, he or she will probably take it on a contingency fee basis and be paid a percentage of the

My father died in November, and we just found out that his life insurance policy ($100,000 payable to my mother) lapsed the month before he died (October) due to nonpayment. He paid his premium by check every month and simply did not pay the most recent monthly premium. My mother was counting on the insurance policy proceeds to pay for his funeral, pay off the mortgage on their house and other debts, and supplement her savings. Do we have any hope of collecting on this policy?

Georgia law (O.C.G.A. § 33-35-3) requires a grace period of at least 30 days for a policyholder to pay an overdue life insurance premium. If your father died before this grace period was over, you should contact the insurer and explain the situation to them. The insurer should honor the policy and pay. In contrast, if your father died after this 30-day grace period had already passed, the life insurance company’s position is going to be that you cannot reinstate a life insurance policy for a decedent (which is true), and that the insurer has no obligation to pay the policy proceeds (which may or may not be true). If you find yourself in this situation,

proceeds if the claim is paid. Even then, be prepared for a wait: Some companies will want to settle such claims quickly. Others will fight at every step such that it might be years before

your mother is able to recover any proceeds.

–Waitin’ in Clayton

2 | 404.410.6820

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