More attorneys choosing gradual retirement

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Indiana Lawyer Focus

Retirement used to mean loading up the Winnebago at age 65 and hitting the open road. For people who have an unlimited amount of money to spend on gas, that freewheeling lifestyle might still be an option. But people are living longer now than ever before, and some are choosing to extend their careers beyond what they originally planned.

It’s a trend that Ogletree Deakins shareholder Ann Carr Mackey has noticed in the legal profession. She has handled employee benefits law since the late 1980s and exclusively for about a decade. She’s seeing more lawyers choosing to transition gradually from practice to retirement.

ann mackey Mackey

“I think it’s a combination of economics, of fewer lawyers and fewer employees generally having a pension plan that guarantees a significant portion of their income for life,” she said. “I think there’s an awareness or concern about the economics of retirement. We’re all living longer, so you’re now looking at: Do I have enough money to live on for 25 years instead of 10?”

Best laid plans

Bob Hamlett, a member of Frank & Kraft who handles estate, tax and business planning matters, said that he is aware of a few major pitfalls in retirement investing.

“I think there are two, and they are opposite sides of the same coin – one is not starting soon enough, and two is not getting good advice,” he said. “If you save the money and start putting it away for retirement, what are you going to do with it? Because, unfortunately, hiding it under the mattress won’t help much.”

Paul Donahue, a certified financial planner and accredited investment fiduciary for Valeo Financial Advisors, explained that the deferred compensation plans that used to be popular for top-level law firm executives seem to be declining in popularity.

Many law firms offer some combination of plans, Donahue said. In firms where a deferred benefit plan used to be the standard, it may have been cut off at some point, with new attorneys enrolling in 401(k) plans instead.

In 2011, the Internal Revenue Service announced that beginning this year, annual elective employee contribution limits for 401(k), 403(b) and 457 plans would increase to $17,000 from $16,500. A catch-up contribution limit of $5,500 means people over age 50 could contribute $22,500.

For senior partners and top-level executives, Mackey said a 401(k) plan is probably not sufficient to maintain the same standard of living in retirement. And generally, people are probably not saving enough, she said.

“Even in these qualified plans, if employees – lawyers – don’t save enough during their working years starting very young, then they get to retirement and they do not have enough money to maintain their lifestyle, or even a similar lifestyle,” she said.

Solo and small firm attorneys may experience additional challenges in funding their retirement.

“The small firms don’t have the kinds of retirement programs that the large firms have and can afford, so individual lawyers are pretty much on their own,” Hamlett said. “Small partnerships can create a profit-sharing plan or retirement plan and be diligent about funding it, and that’ll help.”

Unknown variables

In saving for retirement, planning for the worst may be the best approach.

“Any number of things can happen, and we see it all the time,” Hamlett said. “Fortunately, I’ve been blessed not to have any of those events – a disabling injury where you can’t work. Do you have disability insurance that can replace some of your lost income? Loss of a spouse who is working – again, can you replace that income with life insurance or something like that?”

Mackey pointed out that Social Security and Medicaid funds are quickly drying up.

On April 23, the Social Security Board of Trustees announced that the combined assets of the Old-Age, Survivors and Disability Insurance Trust Funds will be exhausted in 2033, three years sooner than projected last year. The DI Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate. That means that, continuing at this pace, in 2033, Social Security will be able to cover only 75 percent of full benefits scheduled to be distributed.

Working longer

Attorneys can help supplement their post-practice living expenses by continuing to work in some capacity. And for attorneys like Don Knebel, continuing to work after retirement provides an asset more valuable than money.

“I think when you’ve got almost 40 years doing things that keep your mind occupied, winding down and doing nothing is not a very attractive possibility,” he said.

donald knebel Knebel

Knebel, a partner at Barnes & Thornburg, said it’s important for his clients to have someone to turn to when he retires in December 2013, so he has begun gradually transitioning his practice to the firm’s younger attorneys. He will then become more actively involved with the Indiana University Maurer School of Law’s Center for Intellectual Property Research, where he is currently an adjunct professor and senior adviser to the center.

“Teaching law is something I have thought about my entire career, and from time to time, I’ve done guest lectures in other people’s courses and enjoyed that, but having a full-time practice as a litigator, it was impossible to take an appointment like this,” Knebel said.

Knebel will also stay busy with his many civic and volunteer roles, like chairing the board for the Center for Interfaith Cooperation and co-chairing the 2013 Classical Music Competition for the American Pianists Association.

The take-home message

Both Mackey and Hamlett emphasized that the key to successful retirement planning is to begin saving early – and to seek some guidance.

“Depending on the nature of their practice, many attorneys – because they don’t deal with these kinds of issues regularly – are unfortunately just woefully ignorant of retirement planning and those types of things,” Hamlett said.

Mackey said that she understands saving money may be difficult for young attorneys who graduate from law school with significant debt. But starting early may be the key to growing wealth over time.

“For young people, they ought to start doing something, and don’t wait until they feel like they’re in a position to save a lot,” she said. Even a small amount dedicated to retirement savings can result in significant growth if done for 30 or 40 years.•


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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.