Power of Attorney

Should I have a Financial and/or Medical Power of Attorney?

If you trust someone to make important decisions on your behalf–manage your finances or medical care–you can use a Power of Attorney (POA) to empower them to act without requiring your direct input and approval.

This legal tool can be used to designate someone as your personal representative in a single transaction, or it can be used to plan ahead in the event that you become unable to make important decisions for yourself.

Remember, a Power of Attorney is a powerful legal document. It goes into effect the moment it is signed. You should never sign a POA if you are feeling pressured or uneasy. The individual designated in your POA will have the ability to enter you into legally binding agreements and transactions. Carefully consider your level of trust in the individual before granting a POA.

What Is A Power of Attorney

In its simplest form, a Power of Attorney is a legal document used to transfer decision-making authority to another individual.

There are two general categories:

An ordinary Power of Attorney remains in effect as long as you are of sound mind and capable of making decisions for yourself. It loses its effect if you are no longer able to make decisions, or if you choose to add provisions that limit its duration and scope.

A durable Power of Attorney remains in effect, even if you lose the capacity to make your own decisions. These are most often used for advanced directives that define how decisions will be made in the event of a debilitating medical event, for example, in the case of life-sustaining treatment and/or end-of-life care.

As long as you are of sound mind, you retain the option to alter or revoke a Power of Attorney.

Durable Power of Attorney for Finances

If something happened and you were no longer able to take care of your finances, who would you want to step in and help? Who can you trust with your financial security during a difficult chapter in your life?

You need to think about how you want your family’s finances to be managed in this scenario. 

A durable Power of Attorney (POA) for finances will designate who is responsible for managing your financial affairs. The person listed in your POA for finances is called an “agent” or “attorney-in-fact”. This can be anyone you trust, but it’s a good idea to select someone with the financial literacy required to maintain your financial security.

You can define the scope of their duties. You are also able to empower multiple people to serve as your agents. Some individuals choose to require that their agents agree before making an important financial decision on their behalf. Or you can split up the different aspects of managing your finances between them.

You should consult both a qualified wealth advisor and an attorney to understand the specific needs of your estate, and how you can best plan for the future. You do not want to leave these difficult decisions unmade for your family to try and figure out during a stressful time. 

Medical Power of Attorney

A medical POA gives someone the authority to make medical decisions on your behalf. A durable medical POA is an advance directive that designates the individual(s) responsible for making medical decisions if you are unable to make them for yourself.

Sadly, almost every family experiences a time when they are forced to make difficult medical decisions for a loved one. Your durable medical Power of Attorney will help them understand your wishes and give them the confidence they need to pull together and make important decisions during a stressful time.

What can your healthcare agent do with a medical POA?

Pay careful attention when putting together your POA. Ask your preparer questions about how different situations should be handled, and if you need to add specific language to your POA to ensure your interests are protected.

A medical Power of Attorney can provide someone you trust with broad powers or narrowly defined authority over specific situations. It’s completely up to you and the attorney that drafts your POA.

Your healthcare POA will likely give your healthcare agent the authority to:

  • Decide which medical procedures are completed, where they are performed and how your medical team handles ongoing care. You will be financially responsible for all medical costs incurred.
  • Decide where you will live. Your healthcare agent can place you at home with in-home care, in a nursing home or hospice facility.
  • Decide which physicians, therapists, and specialists provide your medical care.
  • Control your diet.
  • Assign important care, like bathing, to a specific individual or agency.

Financial Power of Attorney

If you want someone else to have the power to make financial decisions on your behalf, you can grant them a financial Power of Attorney.

This might be used to empower someone else to negotiate and execute a specific transaction in your absence. This is common for real estate transactions where either the buyer or the seller are not physically present to execute the deal.

When opening a new investment account, your wealth manager may need you to sign a limited financial Power of Attorney in order to execute trades on your behalf. If your financial advisor lacks the legal authority to execute trades, they will need to consult you on every transaction and ascertain your express legal consent. A financial POA can help streamline the management of your investments.

What can your financial agent do with a financial POA?

It is very important to thoughtfully craft your financial Power of Attorney. You can choose the scope of the POA and include specific limitations to help preserve your financial security. Take time to weigh your options and choose the best agent(s) to take care of you.

Your financial agent will likely have the power to:
  • Withdraw funds from your financial accounts in order to pay for your medical care and living expenses.
  • Have your tax return(s) prepared and filed with the IRS.
  • Manage your investment accounts, including changing your investment portfolio.
  • Satisfy your financial obligations and debts.
  • Control management and maintenance of your property.
  • Submit applications for benefits on your behalf (Medicaid, VA, etc.).
Your financial agent will most likely lack the legal authority to:
  • Amend your Will.
  • Violate their fiduciary duty to act in your best interest.
  • Make decisions on your behalf after your death.
  • Designate someone else to act as your agent. They are allowed to formally resign or decline the role of an agent, but they have little to no control over who replaces them.

Choosing an Agent

It’s incredibly important to get this decision right. The agent that you designate in your Power of Attorney will have extensive control over your life. They may be responsible for ensuring your financial security–making investment decisions and managing your finances. They may also be responsible for your healthcare–deciding if you should be placed on life support and choosing your medical facility.

These are HUGE decisions. An irresponsible or poorly chosen agent can cause serious harm to you and your family.

What to look for:
  • Someone that deals with people fairly and can be trusted with your medical care and/or financial future.
  • Someone that understands the responsibility they are taking on and approaches their work with thoughtfulness and care.
  • Someone who shares your values and is fully aware of your wishes.
  • Someone that has demonstrated loyalty to you.

The best step you can take to protect yourself and your family is to surround yourself with highly qualified advisors that are willing to explain your options and understand your wishes. Look for an experienced wealth advisor you can trust and an attorney that specializes in elder law.

Don’t leave these important steps to chance. Act now to ensure your family has the resources they need to take care of you if suffer an injury or an illness that prevents you from taking care of yourself.

should i take social security early

Should I Take Social Security Early?

Social Security is a vastly important benefit for those 63 million people headed towards their golden years or already reveling in them. Unfortunately, it’s also an exceedingly complex process with varying degrees of comprehension and law surrounding it.

Many Los Angeles and San Diego citizens hold just a rudimentary knowledge of Social Security and its many aspects.  Most are simply aware that you can take advantage of the benefit at the age of 70 or you can opt for reduced benefits at an earlier age.

Truly, the only experts in the field of Social Security are the financial advisors, agencies, and lawyers who advocate for those attempting to collect their benefits. This unfortunate truth has many Southern California residents making the wrong choice when it comes to cashing in on their Social Security early.  Potential consequences of cashing in on your social security early can be a reduction in your monthly payment by as much as 30 percent for your entire life.

Alternatively, many financial analysts and industry experts say that making the choice of taking social security at the age of 70 may be the worst thing you can do in today’s unpredictable financial times.  They also believe that Social Security is on its way to a slow but eventual death resulting in millions of Americans receiving no benefits at all.

However, the claim that the demise of Social Security is inevitable is just that; a claim. There is evidence that contradicts that claim, and admittedly there is evidence that bolsters that claim. In any event, currently Social Security is alive and well, and you cannot afford to make the wrong decision on whether or not to take your social security early.

We encourage you to analyze your personal situation and educate yourself on Social Security guidelines.  This will help provide you with a clear-cut picture of what will happen if you decide to cash in on your benefits at 62, 66, or 70.  Our team is happy to speak with you about your personal situation and help you make the best decision possible.

Taking social security early

A Social Security Lawyer’s Answer to Your Burning Question: Should You Take Social Security Early?

Maybe. Before you howl in frustration at the ambiguity of that answer, understand this fact: every American’s situation is different when it comes to Social Security and Social Security disability benefits.

Marriage is a significant consideration when it comes to taking Social Security disability benefits at the optimal time, as are many other considerations such as current disability, and life expectancy.

Expert Advice from a Social Security Lawyer or Advocate

A Social Security lawyer or financial advisor is an expert in the field of obtaining Social Security disability benefits and Social Security income for their clients.  They are known for dispensing prudent advice on when to cash in. They can also advise their clients on what to do if they are denied Social Security disability benefits or denied Social Security altogether. Most Social Security lawyers and advisors hold the opinion that making the choice to take Social Security is “ultimately a longevity decision.”

Making the correct decision is hugely dependent on the state of your health, in addition to your financial status. For example, if you have late-stage cancer and are on the brink of homelessness, cashing in on your social security benefits is clearly the right choice and will markedly increase the quality of your life and overall comfort.

You can’t make a correct decision unless you consider the following factors:

  • Single or Married
  • Health status
  • Financial situation
  • Disability

Once you have analyzed each consideration, you can make the best decision to maximize your Social Security benefits and to do so with peace of mind. However, it’s not always easy to gauge one’s “health status,” and to really know for sure if we will be scurrying around at the ripe age of 70.

What a Social Security Lawyer Will Tell You

If you are analyzing social security from the standpoint of numbers, the best move to take is to sit tight and not take Social Security early. Wait it out, delay, and be patient, because in this case, patience is far more than just a virtue; it’s also a significantly larger monthly check.

The longer you wait, the more of a financial gain you will receive. In fact, for each year past your full retirement age that you can put off applying for Social Security, your monthly check will increase by 8 percent. Additionally, if you wait past your full retirement age, you can receive up to 132% of your benefits.

So, by all means, wait it out. As long as you can afford to do so, hold off on the temptation to cash in on your benefits. In times of financial duress, even taking advantage of a retirement or 401 k account is more financially beneficial than taking your Social Security early and missing out on that large payout for the rest of your life.

As tempting as it is, especially during times of strife, your patience and fortitude will pay off enormously in the end. However, if your situation isn’t cut and dry and even after analyzing all of the most important considerations doesn’t help you make a confident decision, request a consultation with a financial planner such as our firm.  We can look over your case and provide you with the guidance to make the most important decision of your life.

Social security retirement lawyer

Contact Satori Wealth Management

Speak with the team at Satori Wealth Management today to discuss your financial future and let us help you decide whether you should take your social security early or not.  We’re ready to help you understand the Safe Withdrawal Rate and make the right decision to live the retired life of your dreams.  Click here to contact our team today to receive a free consultation.

Safe Withdrawal Rate

What’s A Safe Withdrawal Rate In Retirement?

For those nearing retirement, there are a number of important aspects to take into consideration. You may be wondering if you should cash in on Social Security, making the transition into fiscal conservatism. You may also be familiar with the concept of Safe Withdrawal Rates (SWR), but don’t fully understand how they impact your retirement planning.

Although the Safe Withdrawal Rate is of a critical nature, countless retirees and those nearing retirement have either a vague understanding of it or no knowledge at all about what the concept entails.

Simply put, the Safe Withdrawal Rate is the rate at which a person can withdraw funds from their individual portfolio each year, while still ensuring that the flow of money is continual and abundant enough to support a certain quality of life.

Conventional wisdom dispensed from financial analysts states that an individual should not exceed the SWR of 4% per year, with adjustments made for inflation. These figures were created by an entity called the Trinity Study; a comprehensive research paper that has greatly influenced opinions in many parts of the financial world.

The most salient points from the Trinity Study are the following: an individual has a sufficient amount of savings via assets if 4% of those assets are large enough to support a year’s worth of expenses. Secondly, the Trinity Study informs us that through extensive research, a collective of experts have surmised that an SWR of 4% is the wisest, safest, and most quoted rate across the financial industry.

Withdrawal Rates in Retirement

Why the Safe Withdrawal Rate is Both Smart and Safe

There are a great number of people who adamantly oppose the conventional 4% SWR rate that legions of Americans use as their financial guideline. Individuals and financial planning experts in Los Angeles can be found across the country stating that 4% is a hefty amount to be spending each year. This rate when combined with uncertain economic times, can potentially result in retirees living meager and impoverished lives due to the gradual drain of their savings over time.

However, challenging the wisdom of the 4% SWR rule is difficult due to its excellent track record over time. Most people who do challenge this concept tend to lean more towards fear tactics as opposed to true fact. We recommend speaking with a fee-only financial planner such as our firm to discuss whether or not this rate will work for you.

While the 4% rule is not guaranteed to provide you with the results you desire, it is still the safest action to take and has worked beneficially for millions of Americans.

Facts Bolstering the Safety and Wisdom of the 4% Safe Withdrawal Rate

  • The 4% Safe Withdrawal Rate encompasses a 96% probability of an individual ending up with more than 100% of the principal they started with
  • When using the 4% Safe Withdrawal Rate as a guideline, it has been found that less than 10% of retirees end up with less than the principal amount they began with
  • Over 66% of the retirees completing the 30 year retirement time will end up doubling their initial principal.

Safe Withdrawal Rate: Valuable Tips and Resources

Using a Safe Withdrawal Rate calculator is an easy way to start your journey into analyzing your impending retirement income and overall financial situation. There are plenty of SWR-related calculators online, with Bankrate’s user-friendly calculator among the most popular online.

Savings Withdrawal Calculator – This SWR calculator from Bankrate.com enables people to calculate their earnings easily and ultimately helps to create a financial picture for the future.

With the numbers you provide, this handy calculator will give you your anticipated final balance, and ultimately assist you in making the most fiscally wise decision possible.

Retirees and those who are nearing their retirement years should look into as many resources as possible. Along with using the Savings Withdrawal Calculator, those interested in crafting a picturesque, comfortable retirement also need to take in a multitude of other factors to ultimately achieve their goals.

A Couple Enjoying Retirement

What Expert’s Say About Safe Withdrawal Rates

According to Adheesh Sharma, Vice President of Financial Solutions at Fidelity, “The sustainable withdrawal rate is a useful rule of thumb for retirees looking to withdraw steady amounts from their retirement savings” and “it is important to understand how the rule works.”

Continually adjusting due to inflation, the SWR is different for every individual, with considerations such as life expectancy, willingness to risk via investments, and unpredictable market returns greatly impacting your particular SWR.

Despite the uncertainty of stocks, investing, and the risk of market spikes and drops, an individual can exert a significant amount of control over the fate of their financial future in a multitude of ways.

Contact Satori Wealth Management

Speak with the team at Satori Wealth Management today to discuss your financial future. We’re ready to help you understand the Safe Withdrawal Rate and make the right decision to live the retired life of your dreams. Click here to contact our team today to receive a free consultation.