Imagine going to your doctor today and being told that you have terminal cancer.
Or, you are involved in a horrendous automobile accident.
Or, you are told that you have to cease work — immediately and indefinitely — due to heart disease.
The first happened to my buddy with whom I had practiced law for many years, who was also my fishing and golf partner. He has since passed on.
The second happened to a lawyer with whom I had cases against and who became a good friend of mine. The accident left him with brain damage and unable to practice law.
The last is what happened to me just a few months after my 60th birthday. Being a stubborn male lawyer, I just ignored it, only to be called back to my doctor’s office within a few weeks and again told, in no uncertain terms, that I had to stop work immediately or face some very, very dire consequences.
My image of working until age 65 or so and then comfortably retiring to a life of skiing, fly fishing, writing, getting together with friends, traveling, and more changed in an instant. I had gone from someone who regularly ran four to five days a week and who ran marathons in their 40s and 50s (12 including Boston, New York City, Chicago, and many others) to being told that I was literally on the cusp of being on the heart transplant list.
To quote a famous legal maxim: “accidit stercore,” or in English, “shit happens.”
Now what?
Our image of a comfortable lawyer deciding to quietly retire after a lifetime of fulfilling practice and riding off into the sunset and a life of fly fishing or golf certainly does happen ... but that is just one possible way to end your career. Unfortunately, there are many, many others with less pleasant outcomes.
The chances of a 65-year-old male in the U.S. dying from any cause within a given year can be estimated using life tables. As of recent data, the one-year mortality rate for men at age 65 is approximately 2%-3%. This means that, on average, about 20 to 30 out of every 1,000 men who are 65 years old are expected to die within the next year.
For a 65-year-old female in the U.S., the one-year mortality rate is generally around 1.5%-2.5%. This means that, on average, about 15 to 25 out of every 1,000 women who are 65 years old are expected to die within the next year.
These rates vary based on factors such as health status, lifestyle, and access to health care.
While these rates are not terribly high, they are not insignificant. But they only tell part of the story.
When it comes to disability, the odds increase.
The chances of experiencing a disability can vary based on age, health status, and other factors. In general, about 20% of adults in the U.S. report having some form of disability. For those aged 65 and older, the likelihood of being disabled is significantly higher, with estimates suggesting that around 40%-50% of individuals in this age group may experience some form of disability.
Disabilities can range from mobility issues and sensory impairments to cognitive challenges.
The fact is that time waits for no one. All of us have to contemplate our own disability and/or passing. As lawyers, we are only too aware that we should be duly contemplating the legal implications and making provisions to meet those implications.
Contemplating retirement and dying raises significant decisions that require careful consideration. Here are some of the important factors for legal professionals to think about:
Assess your financial situation, including savings, investments, pensions, and any other sources of income. Consider consulting with a financial adviser to ensure that you have enough savings to support your desired lifestyle during retirement. Also evaluate the types of investments you have and whether you need to rejoin the mix. You could have a 401(k), a tax-sheltered annuity, and many others. Recall that most American lawyers continue to work past age 65, whether due to concerns regarding their finances or perhaps for other reasons. Find out early what you should be doing to maximize the opportunities that a fully funded retirement could bring you. And consider the situation you, or your family, would be in if you had to stop work tomorrow and had to rely on government plans and whatever investments you have in place now.
Evaluate your coverages and determine if these are sufficient to meet your or your family’s needs in the event of your being disabled, becoming ill, or dying. Realize that reducing your income from its present level precipitously, such as going on short-term or long-term disability, will have a tremendous impact on your and your family’s life. Furthermore, disability insurance will most likely be insufficient to maintain your current lifestyle, not to mention any extra expenses that you may be incurring (I found that out from personal experience). Life insurance, for example, can become very expensive when you are on a retirement or disability income.
Evaluate your present health insurance coverage and understand how retirement may impact it. Options include:
Also consider:
Consider the costs of health care in retirement, including extended health and dental coverage, and if relevant, travel health insurance options. You may find that the availability of travel insurance after retirement is sharply curtailed by insurance costs or becomes expensive beyond belief due to preexisting health conditions, if even available at all.
Understand when you are eligible to start receiving Social Security benefits, whether you should defer them, and how much you can expect to receive. Consider the implications of claiming benefits early versus delaying them past age 66. Consider engaging a financial consultant now to plan out your retirement finances and options.
Think about how you want to spend your time in retirement. Consider your hobbies, interests, travel plans, and other activities you want to pursue. Now put a cost to that and compare that with your new net income. There are several stages to retirement, each with its own needs, costs, and possible limitations, ranging from the honeymoon stage to initial transition, mid-retirement, late retirement, and end-of-life planning.
Reflect on the emotional aspects of retirement, including the transition from a structured work environment to a more flexible lifestyle. Consider how retirement may impact your sense of identity, purpose, and social connections. Consider what impact no longer being a practicing lawyer will have. Consider your changed family dynamics when you find yourself at home during hours that otherwise would have found you out at the office. Will you find that you are driving your spouse crazy, or vice versa?
Evaluate your current housing situation and consider whether it aligns with your retirement plans. Explore options such as downsizing, relocating, or aging in place, or moving to a housing environment that corresponds with your medical, physical, and emotional needs (there are care facilities that provide a religious environment for those who desire or require such care, for example). Recall that many health conditions may limit your ability to climb stairs comfortably or at all, and this will affect your housing choices.
Consider the potential need for long-term care as you age. Explore options for long-term care insurance or other strategies to help cover the costs of extended care if and when needed. There are nursing homes, personal care homes, residential care facilities, lodges, assisted living facilities, and supportive housing. Further along the care spectrum are extended care, chronic care, or complex continuing care facilities, and finally palliative care. These can be funded by Veterans Affairs, state and local governments, or nonprofit organizations, or fully privately funded. The waiting lists for government- or nonprofit-funded care can be long, assuming you qualify at all. Fully private-funded options can be very, very expensive.
As of recent data, there are over 100,000 people waiting for organ transplants in the U.S., highlighting the critical need for more donors. Consider whether to register as a donor with the donor registry in your state.
Review and update your estate plan, including your will and health care directives, such as a living will or a durable power of attorney. The laws governing these vary by state, so consult an estate planning attorney. Consider how you want your assets to be distributed and any legacies or charitable benefits you want to leave behind. Are there any family members who require special needs and, accordingly, trust or other arrangements to care for and provide for them after you are gone?
Consider whether to write letters or notes to your loved ones after you have passed. Also consider leaving a list of items that you wish to go to specific individuals with your will, power of attorney, and other final papers. Consult your estate attorney for advice in this regard.
Understand how retirement may impact your present tax situation, including any changes in income, deductions, and retirement account withdrawals. Consider the tax implications of having assets in other jurisdictions and whether you need to obtain estate planning advice in those jurisdictions.
You will have to deal with your trust accounts, any valuable property that you hold, and the storage and eventual disposition of your files, among other considerations, when winding down your practice. Your local practice management adviser may be able to assist you in this regard.
You may need a custodian to take care of and wind up your practice in the event that you become incapacitated.
Decide whether you want to fully retire or pursue part-time work, consulting, or volunteering opportunities. Consider how you will transition out of your current job and plan for any necessary training, licensing, or skill development for new pursuits.
Discuss your retirement plans with your spouse or life partner and consider how retirement will impact your family dynamics, finances, plans for how you wish to spend your retirement years, and associated responsibilities. Do you have joint goals?
Consider establishing a joint bank account with right of survivorship that is joint with your spouse and/or children for the sole purpose of providing $10,000-$15,000 immediately after your death. Once you pass, your bank accounts most likely will be frozen except for those that are joint with right of survivorship. In this way, your spouse or children will continue to have access to these funds to provide for your funeral and other expenses while your estate is being handled to prevent a cash crunch for your family.
Review and seek legal advice if necessary regarding any legal obligations or contracts related to your life or employment, such as:
Review your affairs and attend to such matters as:
Recall that the laws in all these areas vary by state.
Draw up a listing of all your personal information, such as:
Place all of this documentation in one easily found folder with sufficient detail to allow your personal representative to start the task of dealing with your estate, either with you alive, incapacitated, or dead.
In some U.S. states, an authorized doctor or nurse practitioner may legally help someone end their life. This is done by providing or administering medication. Check with your estate lawyer for further information.
Consider prearranging your funeral with a funeral home to take this burden off your family.
By carefully considering these factors and others, and planning ahead, you can make informed decisions about retirement and ensure a smooth transition to this next phase of your life and ease the inevitable work that your family will take on with your passing.
This article was originally written for a Continuing Legal Education Society of British Columbia program, “Tuning Up Your Law Firm,” presented in December 2024. It has been adapted for this publication.
