Pacific Life recently put out a new brochure on structuring attorney fees. The section that caught my eye was on retirement. Here’s some interesting information from the brochure.
The normal life expectancy for a 65-year-old male is another 20 years. The normal life expectancy for a 65-year-old woman is an additional 22 years. About one out of every four 65-year-olds today will live past age 90 and one out of 10 will live past 95. (Source: Social Security Administration, 2012)
Even though many of us have a target age for retirement, an Employee Benefit Research Institute (EBRI) 2012 Retirement Confidence Survey found that 50 percent of retirees retired earlier than planned. This puts us at a greater risk of outliving our retirement savings. Retiring early and living longer means retirement planning is imperative.
For most, properly managing our money while we work will affect a good 20 to 30 years of our lives. Yet in a new 2013 EBRI survey, only 46 percent of those responding reported they have tried to calculate how much money they will need to save so that they can live comfortably in retirement.
Structuring Attorney Fees for Later Cash Flow
The Pacific Life brochure discusses structuring attorney’s fees to ensure cash flow later in life. It includes a comparison of after-tax cash flow from a structured attorney’s fee versus income from taxable investment accounts. The hypothetical comparison showed a higher net income from the structured fee method because the money compounds over the years and taxes are not due until the money is withdrawn.
Of course, there are timing issues to structuring fees. The settlement agreement on which the fees are based must be completed before the verdict is rendered. And for Pacific Life, only fees received for worker’s comp, personal injury or physical sickness qualify for structuring (other life companies have products to structure almost every type of contingent fee).
The brochure is a good reminder why structured attorney’s fees can be so attractive. To view the entire Pacific Life brochure online, go to Pacific Life Attorney’s Fees brochure.
For highlights of the 2013 EBRI survey, go to EBRI 2013 Retirement Confidence Survey.