Originally created 10/11/96

Seminar helps prepare for retirement



On Thursday, a financial educational seminar in Augusta was designed to help senior citizens begin to think about what they need to do to keep more of their assets.

At the "Senior Citizens Retirement and Asset Protection Educational Seminar," about 50 people - including a few young ones - learned some tactics about financial and tax planning. Estate and Business Consultants Inc. of Augusta sponsored the free, two-hour morning seminar at the Sheraton Augusta Hotel and the same seminar Thursday evening.

W.W. "Buzz" Hankinson, president and chief executive officer of the 27-year-old Estate and Business Consultants, presented the group with statistics that showed more people are living longer after retirement age, and therefore need more money to live on afterward.

In 1940, 7 percent of the U.S. population lived after age 65; in 1960, it increased to 14 percent; in 1990, it increased to 24 percent, according to the statistics.

"Retirement today is nearly a third of a person's life span because it can easily stretch out to 20 to 30 years," Mr. Hankinson said.

In fact, one man in the audience had recently turned 90.

Mr. Hankinson, along with his son James W. "Hank" Hankinson, presented issues of interest to older people, such as:

-- Eliminating current income taxes on interest earnings and dividend income.

-- Providing and maximizing retirement income.

-- Reducing current income taxes.

-- Minimizing probate and transfer taxes.

-- Sheltering assets from claims of creditors.

-- Eliminating or reducing income taxes on Social Security benefits.

The men cautioned that each person's case is different and should be looked at individually.

Hank Hankinson, a certified public accountant, gave information about the three kinds of investments: taxable, tax-free and tax deferred. He said tax-deferred investments are best for retired people, especially if they don't need the money to live off right away. The income taxes are deferred until people move into a lower income tax bracket as they get older.

Buzz Hankinson gave examples of certain cases his company has dealt with, many of them involving widowed spouses and at least one involving a divorced person.

Many people don't realize that their marital status gives them some breaks, the Hankinsons revealed.

For instance, the Internal Revenue Service allows people 55 and older a one-time exclusion of up to $125,000 on the capital gains of selling their homes. He told of a couple that was about to get married; both had lost their spouses and owned homes.

If they had gotten married before selling their homes, they would have lost $125,000, because they could sell their homes as single people and each get that amount. But as a couple, only one $125,000 would have been allowed.

The men suggested that couples with huge estates consider splitting assets before death so that estate taxes might be eliminated and that investment tactics could help loosen the taxation of Social Security benefits.

Buzz Hankinson said after the seminar that about 50 percent of his company's retirement counseling business, which is most of what the company deals with, involves people who want to know about pensions.

"A lot of people come in to see us on their lump-sum distributions," which can be penalized 20 percent and then taxed if not handled correctly, he said.