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As a CPA and financial advisor serving Washington State and local government employees, I've seen how proper estate planning protects the benefits earned through years of public service. The Foundation: Essential Estate Documents for Washington State Employees 1. Last Will and Testament: Your Core Protection Washington's status as a community property state significantly impacts your estate planning [1]. Your will must specifically address: - Distribution of pension benefits - Deferred Compensation Program (DCP) accounts - Other retirement and investment accounts - Real property and personal belongings Critical Note: Beneficiary designations override your will—this is where professional guidance becomes invaluable. 2. Powers of Attorney: Your Financial Safety Net Washington State has specific requirements, including: - Financial Power of Attorney (protects your pension and DCP accounts) - Healthcare Power of Attorney (especially crucial given Washington's Death with Dignity Act) [3] 3. Healthcare Directives Washington recognizes both: - Living Wills (Healthcare Directives) - Mental Health Advance Directives (unique to Washington State) [2] 4. HIPAA Authorization This authorization is essential for allowing your designated representatives to access medical information. How a Financial Advisor Strengthens Your Estate Plan: - Coordinates with your estate planning attorney to ensure proper handling of state benefits - Holds you accountable to get these documents completed - Reviews and updates beneficiary designations across all accounts regularly - Identifies gaps in your estate plan that could affect your family - Ensures your estate plan aligns with your broader financial strategy - Provides expertise on pension and DCP distribution options - Creates a comprehensive inventory of assets for your estate planning attorney - Helps you understand the tax implications of various estate planning strategies - Reviews your estate plan annually to maintain consistency with life changes Beyond the Basics: Strategic Planning Tools Consider these powerful options: - Community Property Agreements: These agreements can simplify property transfers between spouses and potentially reduce probate costs by automatically transferring community property to the surviving spouse upon death. - Revocable Living Trusts: These trusts help your estate avoid probate, maintain privacy, and provide flexibility in managing assets during your lifetime. Unlike a will, these trusts keep your estate details private and can reduce administration costs. - Special Needs Trusts: These specialized trusts allow you to provide for a disabled dependent without jeopardizing their eligibility for government benefits. They can be funded with life insurance, pension survivor benefits, or other assets. - Educational Trusts: These trusts set aside specific assets for educational expenses, allowing you to create a lasting legacy for children or grandchildren while maintaining control over how and when the funds are used for education. Each of these tools can be valuable additions to your basic estate plan, depending on your specific circumstances. Essential Review Points Review your estate plan when: - Your employment status changes - You receive promotions or salary increases affecting benefits - State laws regarding public employee benefits change - Family circumstances shift - You acquire new assets or debt Your Action Plan 1. Review current employee benefits and available resources 2. Check all beneficiary designations on state retirement accounts 3. Ensure your documents comply with Washington State laws 4. Partner with a financial advisor familiar with state benefits 5. Store documents securely and inform designated representatives Remember: While online templates exist, Washington State employees have complex benefits packages that warrant professional guidance. Working with both a financial advisor and an attorney ensures your estate plan fully protects your state benefits and aligns with your broader financial goals. You've dedicated your career to public service. Let's ensure your legacy receives the same level of care you've shown our community. Sources: [1] https://app.leg.wa.gov/rcw/default.aspx?cite=26.16.030 [2] https://app.leg.wa.gov/rcw/default.aspx?cite=71.32 [3] https://app.leg.wa.gov/rcw/default.aspx?cite=70.245&full=true -Seth Deal
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Don’t get me wrong, I care about your financial plan. But what is more important to me is that you have a plan for finding purpose when you retire. You can be financially secure and looking forward to your retirement, but if you don’t know what you’re retiring to, you will feel lost. Above all things, I care more about my clients having purpose and living a fulfilled life after their careers have ended. Understanding the Initial Challenges The transition from a structured government career to retirement often brings unexpected emotional hurdles. Many retirees experience a temporary sense of disorientation, loss of identity, and uncertainty about their new role in life [4]. This "Retirement Syndrome" affects approximately one in three retirees, causing feelings of disconnection and concerns about how to spend their newfound time meaningfully [3]. Redefining Your Identity Self-Assessment Take time to reflect on your values, skills, and interests beyond your government role. Consider what truly energizes you and brings you joy [2]. This period of introspection helps create a foundation for your next chapter. Transferable Skills Your years in public service have equipped you with valuable skills that can be redirected toward new pursuits. Leadership abilities, problem-solving skills, and organizational expertise remain valuable assets in retirement [1]. Creating Structure and Purpose Establish a Daily Routine While freedom from schedules might seem appealing, maintaining some structure helps prevent feeling adrift. Create a flexible routine that balances activities, social connections, and personal growth [7]. Set New Goals Develop clear objectives for your retirement years. These might include: - Learning new skills - Contributing to community projects - Pursuing long-delayed interests - Maintaining physical and mental wellness Pathways to Purpose Mentoring and Consulting Consider sharing your government expertise by mentoring younger professionals or consulting part-time. Your experience is invaluable to others [5]. Volunteer Opportunities Many retirees find fulfillment in giving back to their communities. Local organizations often need volunteers with government experience for: - Board positions - Grant writing - Program development - Administrative support [5] Maintaining Professional Connections Stay Connected Join retirement associations and maintain relationships with former colleagues. These connections can lead to meaningful opportunities and provide ongoing social support [1]. Professional Development Consider taking courses or attending workshops to stay current with developments in your field of expertise. Many retirees find satisfaction in continuing their professional education even after retirement [9]. Exploring New Interests Creative Pursuits Retirement offers time to explore creative interests you may have postponed during your career. Consider: - Writing memoirs or blogs - Learning photography - Taking up painting or crafts - Learning a musical instrument [6] Physical Activities Maintaining physical health is crucial for a fulfilling retirement. Consider activities like: - Golf or pickleball leagues - Hiking - Walking groups - Yoga or tai chi classes - Community garden participation [9] Finding Balance Remember that transitioning to retirement is a process, not an event. It's normal to take time to adjust and discover what works best for you. The key is remaining open to new experiences while honoring the valuable contributions you've made during your government career. Looking Forward Your government career was just one chapter in your life story. Now you can write the next one. Focus on activities that align with your values and bring personal satisfaction. Whether through volunteering, mentoring, learning, or creating, your skills and experience can continue to make a meaningful impact in new and fulfilling ways [8]. The most successful retirees often combine multiple activities to create a rich, purposeful life. By staying active, engaged, and connected to your community, you can build a retirement that's as rewarding as your years of public service. Sources [1]https://stwserve.com/planning-for-life-after-retirement-transitioning-from-a-federal-career-to-private-or-volunteer-work/ [2] https://valnelson.com/career-transitions/finding-your-purpose-in-retirement/ [3] https://sixtyandme.com/meaning-and-purpose-in-retirement/ [4] https://greatergoodhealth.com/patients/how-to-find-purpose-in-retirement/ [5] https://www.harmonyhomehealth.com/meaningful-activities-for-older-adults-that-promote-purpose-and-value/ [6] https://bluemoonseniorcounseling.com/hobbies-for-seniors-finding-passion-in-retirement/ [7] https://www.marinerwealthadvisors.com/insights/5-tips-for-planning-a-purpose-based-retirement/ [8] https://safemoney.com/blog/retirement-emotions-finding-purpose-confidence-security/ [9] https://www.actsretirement.org/resources-advice/retirement-life/what-to-do-in-retirement/ -Seth DealAs a former city employee, I understand the unique challenges of planning for retirement in public service. These to-dos will help you navigate the crucial final two years before retirement. For State and Local government employees approaching retirement, particularly those in the Department of Retirement Systems (DRS), the final two years are crucial for ensuring a smooth transition. Having worked with cities, fire districts, and other municipalities, I've seen how proper planning can make all the difference. Remember: This should be customized to your specific situation and employer requirements! It may not include everything that you need to consider for your unique situation. 24-22 Months Before Retirement Month 24
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15-13 Months Before Retirement Month 15
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12-6 Months Before Retirement Month 12
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Final 5 Months Month 5
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Important Considerations for Washington State Employees
Next Steps Working with a financial advisor who understands Washington State retirement systems can help ensure you haven't overlooked any critical steps in your countdown to retirement. Sources [1] https://www.drs.wa.gov/life/retire/ [2] https://www.drs.wa.gov/life/retire/seminar/ [3] https://calculators.everfi.net/index.html#/lifestyle?nodeId=5836&accu=DRSWR&isChild=true [4] https://www.insurance.wa.gov/when-can-i-sign-medicare -Seth DealDid you know that choosing the wrong time to take Social Security could cost you thousands? As a Washington State employee, you have a unique advantage – your PERS, LEOFF, TRS, or SERS pension gives you more flexibility in this crucial decision than most Americans have. Let me share a quick story. Recently I met with a prospective client, a long-time PERS 2 member working at the Department of Ecology. She was planning to take Social Security at 62, the earliest possible age. After we looked at her numbers together, she realized waiting until 70 would give her an extra $1,000 every month for life [2]. That's an extra $12,000 per year – money that could fund her grandkids' college funds or those dream vacations she'd been putting off. As your fellow Washingtonian and financial advisor specializing in DRS retirement planning, I'm here to help you make this critical decision. Let's break down everything you need to know about Social Security timing. Why Your DRS Pension Changes Everything Here's what makes your situation special: Unlike most Americans, you have a guaranteed pension. This pension can be your bridge to larger Social Security payments later. Many of my DRS clients use their pension to delay Social Security, letting those benefits grow by 8% each year after full retirement age [2]. Think of it this way: Your pension is like having a reliable Toyota that gets you where you need to go, while Social Security can be your luxury car upgrade. Your Three Main Options (With Real Numbers) Let's look at what this means in dollars and cents. Say your full retirement age benefit would be $2,000 monthly. Here's how the numbers shake out [2]:
Here's a strategy I often recommend to my Washington State clients: Use your DRS pension as your primary income source while letting your Social Security grow. Many of my clients find they can live comfortably on their pension plus some savings, allowing their Social Security to increase by that valuable 8% per year [2]. Healthcare Timing Matters Too Here's something many advisors miss: While you can start Social Security at 62, Medicare doesn't kick in until 65 [2]. As a state employee, you have access to PEBB benefits after retirement, which could influence your timing decision. We need to factor in your healthcare coverage when planning your Social Security start date [3]. Health care expenses in retirement are one of the largest expenses that you will face in retirement. Will Social Security Be There for You? I hear this concern frequently. Recent surveys show that 72% of adults worry about the system running out of funding in their lifetime [4]. Here's the truth: Even in the worst-case scenario, if absolutely nothing is done to fix the system, Social Security would still pay about 79% of promised benefits [5]. Plus, as a state employee with a pension, you're better protected than most Americans against any potential changes. Making Your Best Choice Here's your action plan:
Your DRS pension gives you options that most Americans don't have. Use this advantage! Don't just follow what your coworkers are doing – your situation is unique. Remember my prospective client from the beginning? She decided to use her PERS pension as her bridge to age 70, maximizing her Social Security benefit. Want to know exactly what this means for your situation? Let's talk about your specific numbers and create a plan that maximizes both your pension and Social Security benefits. Sources: [1] https://www.ssa.gov/benefits/retirement/planner/agereduction.html [2] https://www.fidelity.com/viewpoints/retirement/social-security-at-62 [3] https://www.ssa.gov/pubs/EN-05-10147.pdf [4] https://news.nationwide.com/adults-believe-social-security-system-needs-to-change/ [5] https://www.gao.gov/blog/there-are-options-reforming-social-security-action-needed-now -Seth Deal |
AuthorsBob Deal is a CPA with over 30 years of experience and been a financial planner for 25 years. Archives
March 2025
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