Carroll, Larry W., Heilbronn, Stanley, Kirr, David M., Medical Economics
Making the most of your Social Security benefits
Q: I plan to quit practice when I turn 62 next July. Would I be better off claiming my Social Security benefits then or waiting till 65?
A: At 62, you'd get 80 percent of the monthly benefit you can expect at 65, but the total you collect will be about the same if you live to age 77. This assumes you don't expect to work even part-time in retirement. If you do, you may forfeit part of your benefit, and the penalty is greater when you're under 65. Special rules apply the first year you retire, so be sure to check with Social Security before you set the date.
Tax advantages of a charitable trust
Q: I occasionally get letters from charities suggesting that I could enjoy worthwhile tax benefits by making gifts in trust. But I don't know how to judge the value of those benefits. Can you help?
A: Some charitable trusts yield estate tax savings. They won't benefit you or your spouse directly, since you inherit tax-free from each other, but they might do a lot of good for your children and other heirs.
Trusts that result in income tax savings to you reduce your net cost for the gifts, though you'll never receive more than you give. (If you do, expect to hear from the IRS.) To determine whether a donation in trust is better than an outright gift often requires the services of a sophisticated tax adviser.
Mediation vs. arbitration to settle a dispute
Q: My landlord and I are arguing about who should pay for some office improvements he made at my request. Neither of us wants to go to court, and I've suggested arbitration, but he feels mediation would be simpler and cheaper. What's the difference between these two methods?
A: Arbitration involves formal questioning and presentation of evidence. After that, the arbitrator hands down his decision, which is usually binding on the parties. Mediation is more like a conference than a trial. The mediator's role isn't to decide, but to help the two sides work out an agreement acceptable to both. Only if an agreement is reached and signed by the parties does it become an enforceable contract.
National organizations that offer arbitration services include the American Arbitration Association and United States Arbitration & Mediation. You can obtain lists of mediators from American Family Mediators or the American Bar Association. The ABA list contains several local public-service groups.
Disability coverage: when cheaper isn't better
Q: I've been offered a disability policy at a much lower premium than others I've seen. The insurer has a good reputation, but the low rate makes me wonder if there's something wrong with this bargain. How can I tell?
A: First make sure the policy is guaranteed renewable and covers you in your own occupation. Then study the fine print for a clause allowing the company to hold off paying benefits after the waiting period if you're still getting practice income from accounts receivable.
Also be on the lookout for a phrase such as "some offsets may apply." This would mean the company could reduce the amount it has to pay you by any disability income you're receiving from other sources, such as Social Security, workers' compensation, or your pension plan. Demand a clear explanation of any policy terminology you don't understand, especially the definitions of "disability" and "earnings. …