Khaas Baat : A Publication for Indian Americans in Florida


Estimate Your Retirement Income Needs


Have you been saving for retirement without a clear idea of how much money you’ll need to live on? If so, estimating your retirement income should be an essential part of your saving strategy.

A 2012 study by the Employee Benefit Research Institute found that only 42 percent of American workers said they have completed a retirement-needs calculation – the basic planning step that can help individuals determine how much money they may need in retirement and how much they will need to save to meet their retirement goal.

Plan To Maintain Your Standard Of Living

Most retirees want to maintain their standard of living during retirement. To accomplish this, financial experts say you’ll need between 70 and 80 percent of your pre-retirement income. So, for example, a couple earning $60,000 per year would need between $42,000 ($60,000 x .70) and $48,000 ($60,000 x .80) each year during retirement.

Why less? Retirement typically triggers a number of changes in spending patterns. Your cost of living will change if you’ve paid off your mortgage and other loans, your children have finished college and moved away, or you no longer have working- and business-related expenses. Plus, you’ll no longer be contributing to retirement plans.

Of course, your specific situation will dictate the amount of money you'll need to live on. You may need more money than you anticipate. Health-care costs have increased, and you could possibly use up a greater portion of your income than you planned to ensure your insurance needs are met. Also, you’ll have more time to do the things you love, so you may spend significantly more on leisure activities, such as travel, entertainment, and hobbies.

Consider Your Lifespan

In addition, you need to take into consideration how long you might live. People are generally in better health and living longer, more active lives than ever before. According to the Social Security Administration, a man reaching age 65 today can expect to live to 84; a woman, 87. Those are only averages – one in 10 people will live past age 95.

With so many factors to consider, estimating retirement needs can be difficult. Our retirement calculator is a good place to start. To see if you’re on track, answer a few questions about your goals, how much you’re saving now, and your retirement income sources.

Adi Khorsandian, a State Farm agent providing insurance and financial services, can be reached at (813) 991-4111 or visit

Bequeath or Beneficiary: In Estate Planning, the Difference Is Crucial


The scenario plays out over and over again in attorneys’ offices: A family brings a parent’s Last Will and Testament (the “Will”) to be probated. The Will is complete and well thought out, and it takes into consideration current tax law. But under closer examination, the attorney discovers that the deceased’s estate plan doesn’t work. Why? Because a substantial portion of the parent’s assets pass under a beneficiary designation. Any asset that has a beneficiary designation is a non-probate assets and is not controlled by the Will.1

Increasingly, investors have the opportunity to name beneficiaries directly on a wide range of financial accounts, including employer-sponsored retirement savings plans, IRAs, brokerage and bank accounts, insurance policies, U.S. savings bonds, mutual funds and individual stocks and bonds.2

The upside of these arrangements is that when the account holder dies, the monies go directly to the beneficiary named on the account, bypassing the sometimes lengthy and costly probate process (although such assets are still included in the deceased’s estate for estate tax purposes). The downside, however, is that beneficiary-designated assets pass “under the radar screen” and without regard to the directions spelled out in a Will. This all too often leads to unintended consequences--individuals who you no longer wish to inherit property will receive property , and some individuals will receive more than intended and some will receive less; ultimately, there may not be enough money available to fund the bequests laid out in the Will.

Consider the following hypothetical scenario:

John has $600,000 in property that he intends to pass equally among his three children under his Will. John also has a life insurance policy for $150,000 that names only one of his children as the sole beneficiary. When John dies, that one child will inherit all of the life insurance money ($150,000) and one-third ($200,000) of the assets passing through John’s Will. So instead of each of John’s children receiving $250,000, one of them receives $350,000 and the other two each receive $200,000. John’s plan under this Will and his intent to treat all of his children equally has been defeated because John never updated the beneficiary designation on the insurance policy make all of his children equal beneficiaries of the insurance policy. The same result would occur even if John’s Will had specifically stated that the life insurance policy should be shared equally, because the Will is not an effective way to amend a beneficiary designation. A beneficiary designation always overrides any instructions included in a will.

Unnamed or Lapsed Beneficiaries
Not naming beneficiaries or failing to update forms if a beneficiary dies can have unintended repercussions. For instance, a recent case that came before the U.S. Supreme Court illustrated how a simple beneficiary form review could have prevented undue stress and bitter divisions for one family.

Specifically, in Hillman vs. Maretta, the Court ruled in 2013 that a decedent’s ex-spouse, who was still named as his beneficiary, was entitled to receive his federal life insurance benefits. The unanimous decision came despite the fact that an applicable state law specified that a divorce removes an ex-spouse as the beneficiary of a decedent’s various death benefits.3

While this case was centered on the proceeds of an insurance policy, similar, equally unfortunate scenarios caused by poor planning or benign negligence could affect IRA and other retirement account beneficiaries. For instance, if the beneficiary of an IRA is a spouse and he or she predeceases the account holder and no contingent (second in line) beneficiary(ies) are named, when the account holder dies, the IRA will then be paid pursuant to the default beneficiary provisions set forth in the IRA Agreement governing the IRA. The default beneficiaries will vary among IRA providers and you should determine the default beneficiaries under your IRA provider’s IRA Agreement. If the default beneficiary of the IRA is you estate, this would prevent your children from stretching IRA distributions (and tax-deferral benefits) out over their lifetimes

Planning Priorities
Given these very real, very preventable consequences, it is important to take steps to assure consistency between your beneficiary-designated assets and the disposition of property as it is spelled out in your Will. First, make sure to communicate your plans and designations to family and beneficiaries, especially if you are making unequal distributions. This can help avoid potential conflicts between beneficiaries. Second, you should review your beneficiary designations on a regular basis -- at least every few years -- and/or when certain life events occur, such as the birth of a child, the death of a loved one, a divorce or a marriage, and update the designations , as necessary, in accordance with your wishes. Lastly, make sure to keep thorough records so that it is clear to the executor what assets have beneficiary designation and what assets should be disposed according to the terms of your Will.


  1. Source: Financial Planning Association, “Don’t Forget to Audit Your Beneficiary Designations,” , May 23, 2011.
  2. Source: The CPA Journal, “Coordinating Wills with Beneficiary Designations,” November 1, 2002.
  3. Source:, “Beneficiary Form Trumps Divorce in High Court Ruling,” November 1, 2013.
  4. Source:, “Ten Biggest Mistakes You Can Make in Your Estate Plan,” November 1, 2013.

Seema Ramroop, financial advisor, Morgan Stanley Smith Barney, can be reached at or call (727) 773-4629.

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