The statistics are impressive: over the next twenty years, more than ten thousand people in the United States will retire every day. According to the Employee Benefit Research Institute, many of them will be unprepared, financially, to leave the workforce. In fact, today almost half of American workers—forty-six percent—have saved less than $10,000 for retirement. According to a survey by Americans for Secure Retirement, eighty-eight percent of respondents said they were worried about “maintaining a comfortable standard of living in retirement.”
Murphy Desmond is a full-service, general practice law firm and has been assisting individuals and businesses with a variety of legal needs since its founding in 1931. As an attorney at the firm, Daniel J. Lipman focuses on business and real estate, estate planning, and probate.
From a financial-planning perspective, Lipman notes that most of his clients are currently in a “recession recovery” mindset, interested in preserving and stabilizing their economic growth over time.
“Our clients see a longer horizon for economic need,” Lipman explains. “We assist through plans of conservative lifetime giving, and we provide tax-advantaged opportunities for estate planning—where needed—to preserve the most assets for the family within the context of current laws.”
In terms of trends in life insurance, Lipman says he has observed a recent concern with universal life policies with low rates of return, which can erode the built-up cash surrender value of the policy. Additionally there has been an increase in the traditional use of term insurance to create estates for younger clients with families, while seniors are frequently cancelling costly policies, instead creating wealth through retirement and investment accounts. Long-term health insurance is a common purchase among young and middle-aged clients, if premiums are not prohibitively costly. “Most clients have the traditional concerns of, first, providing for their own economic needs so they will not burden their family or community,” says Lipman. “Secondarily, they want to provide an economic cushion for their children.”
Wilson Law Group, LLC is a boutique estate planning and business planning law firm located in Madison, with an additional branch office in Evansville. The firm is recognized as a national leader in estate planning and education, and their clients include young families, baby boomers, established professionals, farming families, and the elderly. One of the firm’s attorneys, Daniel Purtell, says, “We work with individuals and couples to protect and plan their legacy, whatever the size of their assets.”
According to Purtell, there are two primary trends that he and his colleagues are seeing in their practice. “One is a shift from away from the urgent need to do estate tax planning, to looking at capital gains taxation, and then overall legacy planning,” he says. Legacy planning includes avoidance of probate and conflict, comprehensive instructions during the disability of a client, asset protection, planning for a surviving spouse, children and grandchildren, and education for the next generation.
The second shift is the need to address long-term health care and its costs. Purtell explains: “We believe deeply that if one can qualify and afford it, that long-term care insurance is the best answer to the huge expenses of in-home or institutional care. But many people can’t afford good long-term care insurance coverage, can’t qualify for it, or just don’t want to pay for it. In that case, we work with clients to start the process of protecting assets from a catastrophic spend-down as they might seek to qualify for Medicaid or other public benefits to pay for their care.”
Speaking to his firm’s specialization and experience in estate planning, Purtell says, “What I try to explain to people on a daily basis is the fact that we are professionals who have spent the majority of our careers developing customized planning models. A client does not just get our plan, they receive their legacy with our counseling and expertise added to it.”
Beverly Bertram, of Bertram Financial, has been involved with financial planning since 1981, educating individuals, families, and businesses, and empowering them to maximize their wealth, their lifestyle, and their retirement income. In addition, she and her partner, daughter Michelle Bertram, advise clients on 401(k)/IRA rollovers, debt elimination, and tax strategies.
“As a family-run business, we bring family values into our client relationships,” Beverly says. “We view all of our clients as extended family and, as in any good family, we strive to work together to see you succeed.”
One of the trends that Bertram sees currently is a lack of financial readiness for retirement. She estimates that eighty-eight percent of all Americans are worried about maintaining a comfortable standard of living in retirement. “The old adage that people spend more time planning a two-week vacation than they do on their retirement planning seems to be true,” Bertram says. “Whether you’re retired or very close to it, whether you’ve accumulated a couple hundred thousand dollars or several million, planning for your retirement is more challenging today than ever.”
So how do you know if your assets will last your lifetime? A retirement income analysis is a great way to see if you will have a shortfall or surplus. For their clients, Bertram Financial offers in-depth assessments of assets, liabilities and risks that could affect the financial success of an individual’s “golden years.”
“A retirement income analysis is the easiest way for you to know with confidence if your plan is sustainable,” Bertram explains. “This is our mission and how we see our role as objective advisors.”
For J. Scott Harrod, Mortgage Banking Officer at Starion Financial, good financial planning means helping his clients grow their businesses, build strong foundations for the future, and navigate the financial web of new and evolving products.
“We know that today’s savvy financial consumers are demanding more from their banks, bankers, and the products they are being offered,” Harrod says. “Starion Financial is responding by simply building relationships, one consumer at a time.”
One way Starion Financial does this is by offering cutting-edge products that allow their customers to finance up to ninety-five percent of the value of their homes with no monthly private mortgage insurance payments. Harrod recommends this product for clients whose financial plans include either purchasing a new property or refinancing existing properties. “This one little change may have a significant impact on the consumer’s monthly cash flow,” he says.
Another important element of financial planning is planned giving—supporting the ongoing work of non-profit organizations by naming them as beneficiaries in wills or life insurance policies. Specifically, when considering leaving a legacy gift, donors may choose to contribute to an endowment—an investment fund that gives organizations like the YMCA of Dane County a steady income for the future.
Senior Director of Mission Advancement Sharon Baldwin explains: “As the nation’s leading nonprofit for youth development, healthy living, and social responsibility, our Y must ensure that it can have a meaningful and enduring impact on our community. Rapid changes to a local economy make it even more important to plan for the future stability of our Y through an endowment.” Earnings from this fund would support existing program areas; provide flexibility in developing new programs; fund improvements to keep buildings maintained; and provide a safety net in times of crisis or economic uncertainty.
“Every day—as we work side by side with our neighbors to make sure that everyone, regardless of age, income, or background, has the opportunity to learn, grow, and thrive—we are developing individuals who care deeply about the work of the Y,” Baldwin says. She hopes some of those individuals will become donors who can share their good fortune by contributing to an endowment. “It’s a gift that will keep generating funds year after year to help shape and ensure their Y’s future,” she says.
Physicians Plus Insurance Corp. is a regional, managed-care organization that serves individuals, small employers and large employers across southcentral Wisconsin. According to Director of Communications and Community Relations Scott Shoemaker, the company has the area’s broadest network of providers, including Meriter and (beginning in 2015) all the providers and facilities of UW Health, including UW Hospital and Clinics and American Family Children’s Hospital, and many independent practices. This network allows Physicians Plus to offer members greater provider choice, Shoemaker notes. Additionally, for employers, the organization focuses on delivering true insurance solutions using data-sharing, coordinated medical management, superior customer service, and stable, market-based pricing.
“Health care reform continues to significantly impact our industry. Rather than simply responding to PPACA-dictated changes, we have tried to stay ahead of the curve through creative benefit design and working closely with our customers to anticipate changes that will impact their business, their employees and their bottom line. We will continue this approach as the marketplace and industry continue to evolve,” Shoemaker explains.
Even with these challenges, Shoemaker says he believes this is an exciting time to be in the industry and at Physicians Plus. “Our sights are set squarely on growth, and we’re in the process of developing and executing multiple strategies that will help us save employers money and deliver an even better experience for our members,” he says.
Responding to a trend in insurance coverage availability, Momentum Insurance Plans, Inc., a locally owned dental insurer, was founded by the dentists of Dental Health Associates. “Momentum’s purpose is to provide high-quality dental insurance to our friends and neighbors,” explains Dr. Gregory Sobczak. “Our clients include individuals, families and businesses in the greater Dane County area.”
Sobczak says smaller networks can provide important benefits. “In general,” he says, “insurers are offering smaller networks in order to better control costs to consumers. We believe that offering a select network of high-quality, credentialed providers ensures a better experience for our members, both in the cost and quality of care.”
Sobczak says that as the costs of health benefits have increased, many companies are cutting back on programs that they’ve historically provided to employees, including dental coverage. But dental coverage remains the second most popular employee benefit, behind health insurance. To continue to offer this option, businesses are searching for voluntary plans and self-funding of their dental plans. “Momentum has been responsive to these needs, offering flexible plans and rates suitable for employers of all sizes,” Sobczak says. “Additionally we have individual plans available for employees and their families who don’t have access to company-sponsored dental care.”
Localism is another strength. “What really makes us different is that we are based right here in Dane County,” Sobczak explains. “When you need to get a question answered, you are talking to someone in our Fitchburg office, just down the road. That allows us to provide a level of service you just don’t see these days.”
John Sickels, Director of Insurance for River Valley Insurance, believes that protecting customers when they need help is the most important part of his job. “We ensure that they have full coverage if something were to happen to them, their family, and or business,” he explains.
As part of that pledge, his company offers a wide variety of products including personal, auto, home, business, whole and term life insurance. River Valley Insurance also offers business products including group benefits, long-term care, property and worker’s compensation.
Sickels notes that he is currently seeing a higher demand for a relatively new type of insurance—cyber liability for business owners. “As an agency we have done research on the changes and problems surrounding cyber liability,” he says. “We also are finding that businesses are not fully protected. This could mean they are not fully covered if something were to happen to them or the items they are insuring.”
Sickels notes that River Valley Insurance has multiple agents in all of its offices who are now licensed in life insurance, as well as in property and casualty insurance. He says, “It is important for us to help our customers in every aspect of their lives. Being licensed in life insurance gives us an opportunity as an agency to give more advice to our customers.”