Trimble: Retirement planning: It is never too early to start

A lot has been written and said about retirement for lawyers, and the overwhelming conclusion has been that lawyers, as a group, do a terrible job of retirement planning.

Indeed, many lawyers have no retirement plan at all, and many don’t even have the word “retirement” in their vocabularies.

Everywhere we look we see lawyers and judges working into their 70s and 80s, and every year our bar associations honor our members who have completed 50 years or more of law practice. I confess that I am someone who would like to practice law for 50 years.

There are many reasons given for why lawyers do not plan for retirement. We love what we do and cannot imagine not doing it. We work with our brains and not with our bodies, so we have the ability to continue working even when our bodies may begin to fail us.

Most of us work in settings where there is no mandatory retirement age, and we are left to our own devices to decide when to retire.

One of the sad realities of lawyers who deny retirement is that too many lawyers fail to save for retirement. They assume that they can continue working and producing an income stream, and they simply do not feel the need to save.

Or, they have saved, but they have no idea whether they have saved enough, so they continue working so that they will not run out of money in retirement.

I am here to suggest to you that we all should be planning for retirement, and it is never too early to start. Despite our best intentions, life does not always go the way we have planned it.

If we have learned anything, we know that unexpected things happen. It may be an unforeseen diagnosis of a serious illness in you or your spouse or child or parent, or premature and sudden death.

Retirement planning is not just for you, but it also has to be for the loved ones who you support or assist. Aside from the unexpected, you owe it to yourself and to your loved ones to slow down and enjoy the later years of life. You may also owe it to the younger lawyers in your law firam to allow them to step up into practice areas and client relationships that you have managed for many years.

Law firms, in particular, need for senior lawyers to plan for retirement so that the firms are not saddled with significant and potentially crippling unfunded capital payments that might be owed to very senior members upon retirement or death.

So, here are some suggestions to get you started:

• As early as possible in your legal career find a fee-based financial planner who is not trying to sell you something. For young lawyers, a financial planner can assist you in making decisions about life insurance and disability insurance needs, how to participate in employer sponsored 401(k) programs, and how to begin the process of saving and investing outside of work. Many young lawyers are saddled with student loans and with desires to buy cars and houses, but a financial planner can help you work even a small amount of saving into your life. Remember, that long term saving may have its ebbs and flows as your financial obligations rise and fall, but the goal is to start early and stay at it.

• For mid-career and more senior lawyers, a financial planner can help you figure out how to catch up in your savings if you have not been saving all along. More importantly, they can help you estimate how much you have in net worth and how much of it you will have available to retire.

• For very senior lawyers, many do not know how to actually spend what they have saved without running out. They also have no idea about when they should take social security payments and how they should use the Medicare programs that are available. A good financial planner can help with budgeting and social security planning. They can also assist senior lawyers in cashing in on their investments in a way that makes the most sense from an income tax perspective.

• Law firms should be proactive in encouraging savings and financial and retirement planning. Aside from providing a 401(k) or other retirement program, law firms can bring speakers in to discuss financial and retirement planning with lawyers and staff. Quite often, good 401(k) providers will also be willing to come in and offer advice on how to invest in the options provided by a good 401(k) plan.

• Law firms should also be thinking ahead about succession planning so that client relationships are maintained as senior lawyers slow down or retire. Part of the planning should include a regular review of the firm’s governing documents to make sure that the firm can honor capital payments to retiring partners or their beneficiaries without bankrupting the firm.

The Indiana State Bar Association is in the process of drafting a guide for retirement for lawyers. Look for it to launch fairly soon.

In the meantime, the ABA has lots of material available through its senior lawyer sections to provide ideas on the steps to retirement. One such resource is a wonderful book written by Indy lawyer Kevin McGoff, entitled “Find Your Landing Zone: Life Beyond the Bar.” It is a short and fun read that is full of great ideas about how to begin thinking about retirement.

My friends, do not deny retirement. I am here to tell you that you cannot predict the things that may happen along the way, and it is always best to begin planning as early as you can.

#WillYouBeThere?•

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John Trimble (@indytrims) is a senior partner at the Indianapolis firm of Lewis Wagner LLP. He is a self-described bar association “junkie” who admits that he spends an inordinate amount of time on law practice management, judicial independence and legal profession issues. Opinions expressed are those of the author.