Are You Truly Prepared For Retirement? Wealth Preservation & Estate Planning | UIF Podcast Ep. 26

Added: 2026-05-11

[00:00:02]Alam alaikum. Welcome back to the UIF community podcast. We're excited to bring you part two of our conversation where we're continuing the discussion on building and preserving wealth uh with a deeper focus on wealth management and estate planning. Uh joining us again is Famine Ferdos, a certified financial planner who specializes in helping first generation families and women build generational wealth through intentional values valuesdriven planning. Uh we're also joined uh by my colleague Ajaz Hussein uh who will help us add perspective on how these strategies align with the needs of our community.

[00:00:37]Uh in this episode we'll be diving into practical insights around protecting your assets, planning for the future, and making sure your wealth actually transfers the way you intended to. So let's get into it. I want to hand it over to you uh to lead the way today on the our uh episode. Uh just so everyone knows, we're recording on Monday, April 13th. Uh so these comments I think they'll be general in in nature but if there's anything specific you'll know why we're we're bringing those things up if if it has to do with the date today.

[00:01:06]>> Go ahead J all yours sir.

[00:01:08]>> Sounds good. Thank you Omar and again welcome back sister feminine uh for to part two of our UI community podcast. Um if those of you who have are listening to this one, I would encourage you to go back and listen to the part one. Uh simply because in part one we talked more about the wealth accumulation stage. So a lot of the topics we covered there were about how do you actually save for retirement and strategies around that uh and some of the tools and vehicles you have to implement to to to save accordingly. this particular episode because we have a varied uh listener base over here. Uh we'll cover more about for maybe more direct for people who are in their 50s uh and are are are looking into you know moving into retirement. Some of them people like me in a sense because you know we are our our our main income years uh are already behind us. Now I'm a typical listener in this situation where well what's on my mind going forward. Uh so we'll be focusing more on the wealth preservation and estate planning to protect assets and so forth.

[00:02:17]Uh we topic can be very broad and very complicated and our goal today very simply is keep it interesting, engaging and impactful strategies you can use uh to start thinking about when you get to the retirement stage uh you know what should you have already done uh rather than you should be doing when you're there. Sometimes it's too late for that.

[00:02:37]So with that said, uh again, Feamine, welcome back. And uh we're going to dive right into uh my first question, Feamine, for you uh is something that I ask of myself, but I'd love to hear your answer. You know, what are some things uh uh that people in their 50s uh you know, what keeps them up at night when it comes to retirement, maybe, you know, long-term care planning, Medicare, Medicaid, along those lines. So if you want to start start us off over there, we can go from there. Thank you.

[00:03:09]>> Thank you and asalamu alaikum everyone.

[00:03:11]Thank you so much again for having me.

[00:03:13]Um this is such a loaded question, right? Because it depends on who you are as a person, what where you are in life, right? Because there are some people who are just kind of in their 40s, late 40s started saving for retirement. So, if you're asking yourself that question in your 50s, you're feeling like you're running out of time versus someone who's been really good with their finances and then has been consistent from like their let's say 20s and 30s, you feel like you're in a much more relaxed position.

[00:03:45]So, um I I it honestly varies across the board when it comes to people in their 50s. There are a lot of people who are feeling like they have to catch up and now they're maximizing. And to your point, um they are in their higher earning years right now. So they have more capacity to save. So people um at this stage really love to do like a check-in like hey I'm going to be retiring maybe in the next 5 to 10 years. Can I retire? Am I going to be okay? Do I have enough saved up? If I don't, how much more do I need to be saving? Um but you know kind of looming that question is like do I am I okay for retirement? Do I have enough set aside?

[00:04:24]that's been really kind of like the most common denominator for someone in this age thinking about um retirement because now it's much more prevalent, right?

[00:04:34]It's coming up sooner than later.

[00:04:37]>> Sure. No, no, I know it's a very very broad question. And I don't mean to put put you on the spot by that first question, but I guess uh as we dive into some of the follow-up questions, uh it'll probably angle off into into some of this concerns that people have cuz you see life very differently when you're in your 50s. All of a sudden, retirement staring at you. Uh health becomes a little bit of a focus where you know what happens, something happens to me. Uh you talk about think about who should I leave my assets to. So those are some considerations that somebody in their 50s have that maybe somebody in 30s 40s don't have that necessarily.

[00:05:11]With that said, I mean the question that I want to ask you is I know there's no single again uh answer to this question but from a rule of thumb perspective uh how much income should someone plan for uh once they retire from their full-time job? what what should they be if there is a rule of thumb that hey this this amount of income should be okay for me not that I'm going to live a very lavish lifestyle but but is there is a rule of thumb on the income side in general >> it's more of kind of like actually on the expenses side it's like you know um what you should be thinking about is what kind of lifestyle you want to leave um live in in retirement right because there are the way we look at retirement as planners right we look at in three phases one is your go- go phase right where your health is still relatively good. You're going to be doing things that you normally didn't necessarily get to do while you still had that full-time job. Now you have more time. So that's like your go- go stage. And then slow go is like when you're going to be slowing down a little bit. Health is catching up. Maybe you don't want to do as much.

[00:06:15]You want to slow down. And then there gets to a point in life where it's kind of like that no-go phase where your expenses are just like what you need at that point. You're not doing anything for fun, let's say, cuz health has catching up. um has caught up to you.

[00:06:29]Now you're not able to do things and then now you've kind of achieved a lot of what you wanted to do. So looking at retirement in that breakup phase really helps as well because then we can also cater how much you're going to be spending towards like that just in retirement I'm having fun versus then I'm slowing down I'm going to be moderating and then versus like now I can't really don't have the ability to do much at that point. So looking at it from an expense perspective is if you're spending let's say $10,000 a month now in retirement are you planning to spend $12,000 a month or are you going to be spending now $8,000 a month? Are you still going to be having a mortgage? Are you is your priority to make sure that's paid off before you go into retirement.

[00:07:10]So it's really more from a expense perspective that we look at in terms of how much you should be having. But as a rule of thumb, you should look at your annual expenses, multiply it by 25. And that's really kind of like the next um nest egg you should really have before you go into retirement.

[00:07:26]>> I see. What are the copout answer I feel sometimes people give and and I don't even want to call it copout because every situation is different. So I'm not trying to uh downplay what people have made um in their journey up to retirement.

[00:07:41]people I'll be like hey you know uh what's your plan for retirement for example you ask someone and then they might be like well it's going to be social security and then whatever else I make either through my employer's plan or pension plan or whatever uh and if not I'm going to keep working till I die right and sometimes that's not feasible because your health might come into play and you might not be able to keep working until you die so I'm going to ask you a question specifically related to social security let us assume for right now and there a lot of talk about how social security may or may not be there etc but let's assume right now that that social security is available for people coming in in the next 5, 10, 15, 20 years. Um, what will the social security income be based on and how much can someone expect to receive uh in income? So, is there like some sort of a rule of based on your income, etc. >> Yeah, there is. Um, and it's really such an interesting topic, right? Because to your point, is it going to be available?

[00:08:33]So for honestly for our younger clients, we don't even really take that into consideration because we're thinking you're not necessarily going to have it if you're per someone in your 20s and 30s, but for someone in their 50s and 60s, it's more prevalent, right? So we are planning with social security in mind. So what the way they do it is and then I don't want to get into like the nuances of the calculation but basically on a um on um kind of like overhead level they take your last highest 35 earning years kind of get an average out of that and then they that's called like your average index earnings right that's like your aim and then from there they put your amount through a calculation stage called the PIA to um calculate your your insurance amount. amount.

[00:09:19]Insurance amount is the amount that they're giving you on a monthly basis.

[00:09:22]However, there is something called the FRA which is the full retirement age.

[00:09:27]Social Security has decided your full retirement age give or take a few months is around 67 years old. However, you are eligible to start collecting at age 62.

[00:09:38]If you are a person who decides, hey, I'm going to not wait until my FRA until 67. I want to start collecting at 62.

[00:09:47]Then what you will do is what happens is they reduce your benefits until you get to that age which is 67 and they permanently reduce it to below 30% when you get to a if you start collecting at age 62. So there is a calculation you need to have. There is a conversation you need to have with someone determining if I make this much or if I receive this much from social security on a um annual basis, what is the gap amount I need to fill from like my investments, right? Because a lot of people what they say and especially in our communities um they'll say that oh social security is sufficient. Social Security was actually never meant to be paid out because at that time when it came out the average life expectancy was around 65 years old. So it was like this scheme that but now the average life expectancy has grown significantly to the late 80s overall and now people are living longer. So you need to have a supplemental plan. You need to have something on the side. Social Security alone is not going to be enough. you need to have investment income or real estate income or pension income. You need to have other sources of income.

[00:10:57]It's not going to be enough. So, um overall it is something to consider, but it should social security should never be your only retirement plan. It never be that.

[00:11:08]>> Sure. So, you you're saying think of social security as supplemental income and if you get it and whatever you get it, it's going to be a bonus, but don't necessarily count on that as being the primary source of your income. Um the So with that said, the question I have for you is this. Um you said you can start taking it out as early as 62 or 62 and a half, whatever you said. U my question is this. Would you recommend people start again and I'm going to preface this by saying genetically speaking uh also based on whether you're Indian, Pakistani, whatever versus uh you know uh South Asian versus maybe if you're uh white. It seems like genetically speaking some groups are living a lot longer than maybe genetically like maybe our groups, right? Let's say we're our community is sort of like 75 is sort of the average and then then and you have the let's just the white American community maybe living into the 80s and 90s. With that sort of background, would you recommend people of our South Asian community maybe think about taking social security earlier maybe starting it earlier because you you could you know otherwise what's the point of waiting and you may not be around. So just some general thoughts on that. Yes and no. And that's actually and obviously we don't know how long someone is going to live, right? But your health um does play a key role, right? And your family background, your genetics does play a key role, right? So when I whenever I start a financial plan, I'll always ask what is like, you know, how does um longevity look like in your family? Some people will be like, oh, people have been living until 100. Some people are like, well, mostly everyone died like in their 60s and 70s. So there are some people we're planning for until like maybe 85. Some people were planning out until 105. So that depends, right?

[00:12:54]But like to answer your question, if you're generally going to be living more than 80 years old, like if your longevity, your family is that good, um it makes sense for you to wait until you're 70 because at 70 what happens is every year you wait until you know basically you wait to receive social security, you get an 8% increase on how much you're going to receive monthly. So after 70 it doesn't grow anymore. So if you're going to have a longer life overall, it makes sense for you to wait because you're going to max it out. But then to your point, if you're not necessarily in good health, right, and you know life expectancy hasn't been good in your family, then in that case it makes sense for you to collect earlier. Yes, you're getting a permanent reduction in how much you're receiving, but at least you're getting the benefit.

[00:13:37]You've worked so hard in life. at least you'll be getting some benefit and then you know be able to use it to enjoy and supplement life and you know your expenses overall. So it depends on the longevity also.

[00:13:50]>> Well the good news is Omar doesn't have to worry because he's planning to be a professional golfer um once he retires because he's been really working hard uh over the last 5 10 years practicing a lot and his game has really gone from about 105 handicap now to about 95 I'm assuming but he tells me 85 which I'm not believing. So, it's one of those things that he has his alternate game plan that I I applaud him for for >> I appreciate it. Yeah, thank you. I think with all my senior PGA tour winnings, inshallah, I'll be I'll be doing quite well uh later on in life post UIF. So, I appreciate your >> I appreciate your vote of confidence on that. Um but I want to switch topics a little bit if I mean u if we can talk a little bit about Wilson Trust. That's something that comes up quite a bit now.

[00:14:33]Um I'm like in my mid-40s. I was telling you just a little bit earlier, I was at a, you know, at a school picnic for my kids and that, you know, conversation literally came up uh among some friends and uh, you know, people talking about, okay, should I get a will, should I get a trust? Can you talk a little bit about, you know, what are the differences, who, you know, who should try to get either of those um, and what situations might that be required?

[00:14:57]>> Yeah. Yeah, absolutely. And before I actually answer this, I just want to also answer a quick well add a little quick nuance about the social security piece is that if you decide to collect at 62 and you still continue to work, they are going to reduce your social security benefit by a dollar for every $2 you earn. So that is just like another nuance as well cuz some people are like, "Oh, let me collect it and still make money, but they're going to also reduce it because they catch it."

[00:15:22]>> Um, but in terms of uh wills and trust, so that is a question I face all the time. It's like I'm not rich enough for a trust, right? And that is a big myth in because people think that you need to have a lot of money in order to have a trust and that's not necessarily true.

[00:15:36]It depends on what you want your legacy to do. So a will is just kind of you know stating out what are the basic facts about them. Will is very easy for you to implement right now because you basically write down your wishes and then you say this is what's going to happen to my asses. This is how much each person is going to get. you write it down very simple, nothing else for you to do. Trust is it's more work for you um because you need to make sure everything is titled appropriately. And one of the goals people that create trust have is that they don't necessarily have someone maybe um close by or as sophisticated to be able to handle their estate. So they want their assets to pay out as quickly as possible. And you know, you want to avoid probate. Probate is the process where all of your assets go through the courts and it's it's a lot of work depending on what state you're on um what state you're in if it's um if sometimes like in a state like New Jersey 9 to 18 months is a very due standard process when it comes to the probate process. So people are like no I don't really want my family to be able to go through that and then it also your assets are also on hold at that time as well. They're they're called they're basically frozen. So if you don't have a lot and you know everything is basically kind of going through your retirement or insurance assets then it maybe will make sense if you don't care about the probate process but if that's something that's important for you you should think about a trust. So there isn't necessarily any limit in terms of how much money you should have if you're if thinking about wills and trust. It depends on how you want your money to flow. Who is going to be the person handling your estate? Cuz all of your assets after you pass away they're called your estate. So, who is going to be that person? Um, and how comfortable you feel about distributing those assets. And also obviously depends um if you have young children. If you have young children, by default almost under 18 years old is going to go into a trust because it's not going to go to them.

[00:17:34]They're not until they become of age.

[00:17:36]However, one thing for parents to consider is to think about, do you want your children to get whatever estate you leave to them at 18 years old? Do you think they're going to be responsible enough? I've also seen other sides of it where kids have received at 18, even 21 and they've blown through it. They basically party through it. And there are some responsible kids who trust the financial advisor, right, and take the advice. Um, but many of them don't. They just they just like this is free money.

[00:18:02]My parents left it. I can do whatever I want with it. And they kind of just blow through instead of using that as like a really huge step ladder for them to succeed in life.

[00:18:12]So just to follow up on Omar's question is what if somebody comes and tells you husband wife husband says you know what listen from what I understand is once I die all my assets go to typically women tend to live longer so if I die um and I want to my assets are all going to pass to my wife then really she can worry about how she wants to set it up later trust etc. Is that a good good way of approaching it or would you would you advise against that? Not necessarily because when you complete your estate documents, you should do it together keeping both, you know, both of you in mind. Especially when it comes to guardianship, right? Because especially in our communities, if like the father passes now, like the mom might want to do certain things, but then you know the grandparent, the um paternal parent or grandparents might want to have some say, and you know, there's there's a lot of conflict that gets involved. However, if you create your estate documents and have everything in writing, then you know you can say like this is both of our decisions, right? And with a trust, you can also create a joint revocable trust, which is really nice. So, you are the person making all of the decisions while you were alive. And after someone passes, it just becomes that one person's. So, that the surviving spouse is now the owner um and the grtor and the trustee of that trust. And after you be after you pass away, it becomes irrevocable. And that's when the trustee comes in and you know kind of implements your decision. So I never would recommend a married couple with children to create silo um estate plans. You should have this in mind. You should create them together and have really transparent open conversations about guardianship as well. What if something happens to both of you? Whose family is going to take care of the children? Is it you know do the families have the best relationship with these children?

[00:19:57]Cuz you have to think about >> not your relationship. You have to think about who has the best relationship with your children. Who is going to raise them in a similar like manner like you that you trust and have that conversation. You can't just write it down and never tell that person you chose them as their guardian, right? You they have to be willing to serve and do where do you want your children to be raised now? Are they going to move to your house? Are the the children now going to go to the other person's house?

[00:20:22]Like these are very important conversations to have. Um, and that's and I go through a process when I work with my clients to have these conversations. Um, and you know, a lot of times they're very surprising and the people they originally would have chosen now they don't choose anymore because they're like, well, they're what they're saying is very different from what I want.

[00:20:42]>> Is there dollar amount famine that you would say if you have a million dollars or more in assets, you must think about a trust versus maybe if it's under a million, okay, will might be enough for you. Do you have any thoughts on that or >> I think in general if you have children you should think about creating a trust um in in general because most parents don't want their kids to receive the assets um at the age of uh 18. Not that you can't do that with a will. So with a trust right with a revocable trust it becomes irrevocable after death. With a will you can also create what's called testimeamentary trust. Regardless it becomes a trust right. So, you should have your um decisions laid out in that situation. In terms of a dollar amount, not necessarily um because what matters is what situation you're in, not where you are in terms of like financially in life, but um the exemption right now is 13.9 million for an individual and then for a married couple is about almost 24 million, 23.9 million. So unless you're at that level, that's when you need to do like active planning regarding uh estate taxes because that's like at the federal level that's at 40%. Other below that, you know, it's really more about having your intentions in place and making sure there's guidance around what you want happening with your money.

[00:22:03]>> Fair Omar.

[00:22:06]>> Yeah. So um anything different? I mean as I was mentioning about a million but maybe we have some clients maybe super high net worth 5 million 10 million in uh in assets. Anything different for them is more about or is it more about children and like their family situation or a combination of both?

[00:22:22]>> It's about your family situation. It's about your children but then also I want to preface people think that if they just have a will they don't have to pay attention to beneficiary designations.

[00:22:33]Beneficiary designations supersede any estate documents. And that is such a key element. I've heard people say time and time and again, "Oh, I I've done my estate. I don't have to pay attention to my retirement plan, my term life that I have with my job." No, that's not true.

[00:22:49]If you work on your estate plan, you need to make sure everything is saying the same language. You cannot Oh my god.

[00:22:54]I've had a situation where a um a couple got divorced and the expouse, he died and he had his ex-wife as his primary designation for his retirement plan at work and he got married and he had other children but he never updated. Guess who got the entire retirement plan from the beneficiary designation? The ex-wife.

[00:23:18]>> Wow.

[00:23:19]So when you do your estate plan, it is very important even though there might be nothing happening annually, you should receive, you should review your beneficiary designations. Anything through work um and then also any insurance you have insurance and um retirement always have beneficiary designations. They pass outside of your will, outside of your estate documents.

[00:23:40]All of that should be saying the same.

[00:23:42]Now let's say you've created a revocable trust. Your beneficiary designation should have the revocable trust as the 100%. So if you want it to pass that way. Some people want to leave a decent amount to charity. So you can put 80% to your trust and 20% to charity. Whatever it is that you want. But you should always have your primaries. You should always have your contingents.

[00:24:03]>> Um and make sure you're reviewing it on an annual basis at least.

[00:24:07]>> But I'm sure the ex-wife was very happy though. Wouldn't you agree?

[00:24:09]>> Was happy. And do you think and of course the family asked and she's like no it's mine. She >> legally it's hers, right?

[00:24:17]>> That's right.

[00:24:18]>> She did no wrong there. Um that's that's like winning the lottery. Okay. So, um what what happens if I mean if someone uh dies without a will? They die in testate. What's what usually happens in that situation then?

[00:24:32]>> So, when you die, yes. Um when you die without a will, it's called intestate and you have to follow the rules of the state at that time. So whatever state you pass away at um pass away at, they determine who's going to get what. And that might not necessarily be what you wanted, right? There are people who disown children. There are people who don't have relationships with siblings that don't necessarily or even want to give 50%, maybe they want to give 10%, maybe they want to give to their nieces and nephews and godchildren. So the state has a say in who's getting what.

[00:25:01]There's a rule they follow basically like class A, class B beneficiaries, who's related, who's your um lineal descendants. they just go down that line.

[00:25:11]>> Feminine u my mom passed away a couple of years ago and one of the situations came up was the healthc care related power of attorney. So I'm kind of turning towards that topic right now. Um my brother had the my brother younger had had the healthcare POA he was a designated person. So when he was traveling out of the country and I was there with her uh doctors were particular about who okay who is the person who has because because she was dealing with unfortunate dementia and that led to a state where she was completely inactive so to speak. So it becomes a real real issue if you don't have some of these things planned out.

[00:25:46]So can you just touch upon both the uh financial POA as well as a healthcare power of attorney please?

[00:25:52]>> Yeah absolutely. So to your point, exactly. Whenever people choose the child that's maybe like more around or um in general and then they'll say, "Oh, this one is primary and this one's successor." However, a lot of times people don't do that. They just have one person and they don't select anyone else. I always recommend have a primary, have a successor, maybe even a second successor, right? And also you can do um joint um directives as well where you can have joint power of attorney but then acting independently. So you can have both but then you can take direction from either or. So for in your situation it could have been you yourself and your brother and if the other one wasn't available you could have made that decision. So um you can have you can be selecting two primaries but then having them um decide independently instead of jointly.

[00:26:43]However people also like joint decisions. Oh, so they're like, "No, both of you need to sign off on it." So, whenever there's like joint power of attorneys or joint directives, you both have to sign off on these decisions. And some people want that because they want their children to hold each other um accountable in a state of incapacity.

[00:27:01]>> Is there a limit on that? If I mean, sorry, Jez. Uh just just cuz I'm curious because like myself, I think about I only have a sister, right? But then I know my my wife, she has three other siblings, right? I know they've t they've had conversations about what to do with that. Is there like a kind of rule of thumb again about that like multiple kids like how that should be done? Is there parents just going to pick whoever they're they feel is most responsible I guess you know and maybe their closest too. Yeah.

[00:27:26]>> Yeah. That's what parents do. They basically line them up. So if they have four kids they'll be like this person is number one. This person if if they're not there then it's two then it's three then it's four. They usually tend to go with the children that they're the closest with that they feel the most comfortable with. And a lot of times it's usually the oldest child.

[00:27:43]>> All right. Yeah, a lot of feelings are going to get hurt when it happens. I feel like >> you recommend which I highly recommend to because I went through the situation with my mom. It caught me off guard. I had not even put my name on my brother's name. But both the financial power of attorney and the healthcare you need to do that while you have you the right mindset and do it immediately whether it's with a will or along as part of a trust documents because otherwise things just get jammed and and the worst possible time when decisions have to be made uh you you're stuck because you didn't take that extra precaution or extra step to do things. So so I think it's very very important. So would you recommend that fmy like do these power attorneys immediately as soon as possible while you have the right mindset?

[00:28:24]>> Yeah. Yeah. Absolutely. So when you are creating your estate documents, your estate document should include if you're doing a trust, you should have a trust and a porover will. If you're doing a will, you should have a will, a financial power of attorney. Um healthcare power of attorney, which is also known as like the advanced um healthcare directive or a living will.

[00:28:42]Um and then you should also have your HIPPA releases. All of those should be included when you're doing your estate documents. Um, and then in terms of like the incapacity, right, you definitely want to do it while you're still in a in a good um mindset where you're still able to make those make those decisions, not when you're actually getting sick and you've already gotten sick at that point. Cuz at that point, if you're incapacitated, those documents are not valid.

[00:29:06]>> The other point is a lot of people, I've also heard them say that, oh, I have a power of attorney. I don't need to do a will. I don't need to do a trust. One of the most key things when it comes to a power of attorney is power of attorney cease to exist as long as soon as you pass away. So you can have it while you're alive, but as soon as you pass, it no longer means anything. And if you don't have any documents, you it means you died uh in test state.

[00:29:30]>> That's it.

[00:29:33]>> What's uh I know you touched upon the trust part. talk about the two types of trust trusts that uh you know the revocable versus the irrevocable and and and where should people use that in what?

[00:29:45]>> That's a really good question. Um so revocable means you can change it at any time during your lifetime as long as you're not incapacitated.

[00:29:54]Irrevocable trust they refer to u basically irrevocable gift. That means you cannot take that gift back. You cannot make any changes to it. So, if you give someone, I'm going to say the annual exclusion $19,000 and you put it in an irrevocable trust and you say this is yours, you don't get to come back and say, "Well, now it's in that irrevocable trust and I chose Omare as my trustee and I can tell him what to do." Not really. Omar might want to take your suggestions, but you cannot make him do anything. It's no longer your money.

[00:30:27]I've seen people put it in irrevocable trust and want to control it, but no, you've given up. you have given up um control and that's what makes it irrevocable.

[00:30:38]>> The very few times where people well most of the time when people do revocable trust is when it comes to Medicaid planning and the other is when they have assets well over that exemption amount which is now at 24 million. back in the days that exemption amount used to be like 650,000 and that's why a lot of people were doing irrevocable trust to avoid that 40% um federal gift um a federal tax exemption at that point. So they didn't want to pay that 40%. So they basically put those monies in that trust and then said this is what it's going to pay out to you know this person that person. The other thing what you cannot do is you cannot say I'm putting money in a revoke irrevocable trust but now I'm the beneficiary. I'm getting money from it.

[00:31:20]it's getting invested and I'm getting the income that is not that's basically becomes a defective trust at that point.

[00:31:27]So you cannot have any strings attached.

[00:31:30]You cannot have any beneficial ownership to that trust.

[00:31:34]>> Right. About the gifting part, just very quickly, I'm very concerned about this personally myself. Like what is when do you feel comfortable gifting away money to your children or loved ones? Because I'm concerned that I don't want to be a burden uh to my kids when I get to a situation in a tough when I and I can't work, I don't have uh I I can't make a living, etc. income, etc. So do you have a sort of a thoughts a rule of thumb on like okay if you have x number of assets maybe at that point it makes sense to start gifting it away or would you say don't even do that what are your thoughts on that >> so those actually that matters for more for people when you are in a situation where you have more money than you know what to do with right and that and you end up in that situation um when you save too much in pre-tax dollars and your required minimum distribution at 75 let's you made 100,000 and now your money has grown at age 75 that required minimum distribution is now 300,000 or 250,000 a year your tax liability gets so high right so that's when people use what's called QCDS qualified charitable distributions to take monies away so they don't pay taxes on it and now they're getting so much money that they can't put back in the IRA right so they have to use that money and now they can't take that money and put in a Roth IRA because they no longer have earned income so now you can't contribute you.

[00:32:55]So either you put it in a brokerage or you give it to your family members cuz now maybe you've entered that slowgo phase of retirement cuz you're not going to spend it. So now you can gift it away because at that point you're now thinking of giving money and leaving assets to your grandchildren perhaps maybe your children maybe they want to buy a house or start a business. So money that you would naturally give away anyway you can gift it. The annual exclusion this year is 19,000. So you can give it to let's say I'm I'm going to just make up a son for you a cuz I don't know if you have one or not. So let's say you have a son and a wife and then you're like I want to give them some money. I have more money than I know what to do with. So I'm going to give him 19,000. I'm going to give his wife 19,000. That's 36,000. I can give to my children or I can give to my son and his wife or to his family without having any gift or tax implications. You do not have to file it on your taxes. he does not have to file that as income on his taxes. So that's a nice way to get monies out of your estate if you have more money than you know what to do with a a lot of the wealthier people have this um going because they need to get monies out of their estate. So they do this they give it to like their grandchildren they give it to their spouses because and then as a married couple now you can double it. So now Ajaz and let's say his wife also wants to give to the son and the daughter-in-law. Now you can double that 36 now to 72 and give it away. Now 72,000 out of your state in one year is a pretty valuable amount that you don't have to pay taxes on.

[00:34:25]>> Yeah. What is the minimum required uh distribution right now? The RMD and what age?

[00:34:31]>> It's it's 75. It depends on how much you have in your IRA at on in your pre-t like your traditional IRA. So if you have like a million it could be maybe 200,000. If you have 5 million it could be 300,000. It depends. It's a calculation based on your life expectancy and um how much you know you have in the account at the end of the year price. So the 26 required minimum distributions are calculated based on 25 numbers as of December 31st.

[00:35:03]>> Omar.

[00:35:05]>> Yeah. Um I mean so for uh Medicaid right so can you share your thoughts on Medicaid planning uh for like long ter long long-term care considerations?

[00:35:17]Yeah, >> that is something really powerful because it's such a real situation many of us end up in or many of us see family members in who have older parents right so Medicaid basically they will give you when you don't necessarily when you cannot do two out of the daily living things like showering bathing cooking eating when you cannot do these things then they'll say like okay you can go into a nursing home right or we you can be at home and we will send a aid to help you and that is considered as long-term care. In order for you to qualify for Medicaid, you are allowed one house up to $1 million and you are allowed one car. However, if you have like liquid assets more than like in a state like New Jersey, if you have more than like 22 to $3,000 in cash available, then you don't qualify. So people do Medicaid planning to qualify for Medicaid because long-term care for an aid you're paying anywhere from 30 to 35 or $40 an hour and it becomes too much of a burden to pay out of pocket.

[00:36:19]So at that time people take their assets put it in irrevocable trust. they sometimes maybe they'll take their house if it's paid off put it in an irrevocable trust because what Medicaid does is yes we're going to pay for you and let's say they paid for you for 5 years and they paid 300,000 let's say now you have left your house to your children Medicaid will be like well your children now want to sell the house we paid you 300,000 they put a lean on your property and now they want their money back so with the Medicaid look back period what they're going to do at that point is come back and say um well you've gifted a certain amount like 18,000 20,000 um to us to someone else.

[00:36:57]Now, we are going to recover that period. So, either you pay us that money back like you're going to have to put that 18 20,000 towards your own cost and then we'll come back and cover your expenses or you have to basically wait until that look back look back period is done. So if it was in year one of instead of year five now you have to wait another year until that 5year look pack is is basically clean and you have not gifted anything you have not transferred anything and your assets are still below their requirement and then you will get the benefits. So that's when people use the Medicaid planning and then that another time when they will use irrevocable trust um for to qualify for Medicaid benefits. So basically to sum sum it up what you're trying to say if I mean is that if you are planning on using Medicaid as a as a support system for your own long-term care insurance and any monies you give away prior to 5 years before that happening can come back to haunt you because then the government can come back and say well you need to give that because you you should not have given that to your heirs now you so that that can be problematic. But if you've given something away prior to the 5year period, you should be okay. It's just that the last five years is what they look at because the idea here is they don't want people to give away all of their money uh to their heirs and then come back and tell the government and and say, "Hey, you know, now I need the money to help you." That's that's the whole point behind this uh fiveyear look back rule, right? So, all right.

[00:38:27]>> Absolutely.

[00:38:27]>> Go ahead, Omar.

[00:38:28]>> Yeah. Uh if I may, so if you have a spouse uh for example, passes away uh in retirement, right?

[00:38:35]um do you have to revisit and change anything in under those circumstances?

[00:38:40]>> Yes, if you are um collecting social security, what happens is when both spouses are collecting social security um you cannot continue to claim on your deceased spouse at that point, right? So what you can do is call like the higher of the two. So if your spouse is getting more, you can now get your spouse's um social security amount and then drop yours. But if yours is higher, you can still keep yours. Um, but this is also another way for you to now look at like for example, let's say the husband was getting 3,000 and the wife is getting 2,000. So your combined income is 5,000.

[00:39:14]Now your husband passed, right? Now you can claim to get his. So you'll get his 3,000, but your 2,000 goes away because you cannot double dip. So now what do you do for that 2,000 in income? That's now going to be a deficit. So now you maybe now need to pull a little bit more for retirement. So planning for that ahead of time is also very key but and you know thinking like now do you have a policy that you can be pulling from to get additional income from as well. So these are things like you should definitely revisit anytime any life changes happen you should always revisit your estate plan and redo it update it as long as you're not incapacitated.

[00:39:50]>> Sure. So this was a great session for me. Let's wrap up. We can go so many we can keep talking for the next three hours if you need it on this topic but let's wrap up. Uh we also I know have some of our clients and some listeners who probably are very very well off uh and they've asked questions in the past about donor advice funds and advanced tax planning. So I don't want to get into too much into the weeds on this topic but just if you want to touch upon who does this apply to uh and and and how should they proceed on this matter your >> donor advice funds are a great vehicle um when you want to reduce your tax liability. So, for example, like if you are now changing how your titles are um how your accounts are titled and especially if you have a brokerage account, let's say if you were one of those early investors 10 years ago in Nvidia, right? You've got this massive gain now and you're like, well, now I'm retiring and it's in a brokerage account and I need to diversify because I can't afford that risk anymore, right? Because that's at a risk of like this, you know, more than the stock market, right? So now you want to diversify. But how are you going to diversify without selling?

[00:40:56]So now you need to sell. So if you sell now you get hit with the capital gains taxes, right? So at that point you can take some of those gains. You can take you can sell take those monies put it in a diver donor adise fund. And for Muslim clients it's really advantageous because you can get that tax break or that tax deduction in the year that you put the money in the donor adise fund. And then you can use that donor advice fund to give to um for your zakat as well. As long as it's to a 501c3 organization, you can always give in that time. So you get the tax benefit all up front. Use that for your zakat as well. So it's a really kind of like a win-win situation and you can also diversify your assets that way.

[00:41:38]>> That's awesome. Well, that's all the time today we have Famine for the questions. You did a great job. I mean I learned a lot and I'm sure Omar did as well and our listeners. So with that said, I just wanted to say famine, thank you so much for uh coming on our podcast and educating us before Omar makes the final disclosures and wraps up for today. Uh I know you also mentioned last time but where is the best place if people have any follow-up question they want to reach out to you where would they where would they get a hold of you?

[00:42:06]>> Yeah, LinkedIn is the best spot because that's when you know I would obviously I always respond to my messages rather on a quickly level. um usually within 24 hours or so. So, that's a really great spot. But there I also understand there might be some people who aren't necessarily on LinkedIn if they're looking to retire already retired, but then they can always, you know, um send me uh email as well. So, my email is famine, which is my first name.com.

[00:42:35]>> Yeah. What we'll what we'll do is Omar is going to read out our email address too. So if somebody wants to reach out uh to us uh and Omar will give the email in a second uh we can just take that email and forward it over to you. I mean maybe you can then directly respond people get little nervous about asking questions on a public format in a sense like uh and so forth. So Uber, why don't you go ahead and take it from here, do the rap, give the email address, and uh and one last thing I do want to mention, last time, you mentioned it already, is that uh listeners, if you have thoughts on future guest speakers we can bring on, any interesting people you have that you feel can contribute to the community just like Feain did over the last two podcasts that can add value uh to our listeners lives. It's all about education, giving back as far as we're concerned. So, so please uh propose your ideas too at the email address is going to share shortly. And uh thank you again for joining us. We look forward to speaking with you soon. That's it from my side. Omar, >> appreciate it, Jaz. Yeah, Famine, thank you so much for coming on. Um, I think Famine has the distinct honor of being uh uh first time uh guest that we've had uh twice on the show. So, um you know, and back to back. So, she >> just like she's like Rory Meoy of Masters, backto-back champion. talking about the masters just a second ago while you stepped out Famine with the technical difficulties but congratulations on that uh being a first uh backtoback guest on the UIF community podcast. Uh with that we'll close out the episode. Um as you guys can see I mean really really knows her stuff. She's a certified financial planner. Uh so definitely feel free to reach out to her. We'll include her uh contact information in the podcast description. Uh like Ajaz said, if you have any questions uh maybe we didn't get to today that are a little bit more specific to your uh life or financial situation, uh reach out to us at feedbackuif.com.

[00:44:20]Um and if you are uh interested in any of the product services that we're offering at UIF, uh we have a wealth of information on our website at myuif.com.

[00:44:31]Um and you know, we're there you'll find information about our residential, commercial, uh vehicle financing as well as our halal savings accounts. Uh so without further ado uh on behalf of myself and Aaz thank you again Famine for joining us and uh look forward to the next episode with uh all of our wonderful viewers and guests out there.

[00:44:48]Thank you guys very much.

[00:44:52]Thank you so much for having me. It was such a pleasure. I really enjoyed our conversations and I'm so touched that I did get to, you know, come back to back on your podcast. I loved our conversations and I hope the community will also benefit from them as well.