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Retirement is important. If you plan well, you can enjoy your retirement with the peace of mind that financial security and independence bring. If you plan poorly, or not at all, your retirement can go horribly wrong and even lead you back into the workplace. Here are six mistakes to avoid when planning for your retirement.

1. Not having any plan: A third of adults have no financial plan for retirement, according to a recent survey conducted for TD Ameritrade. With a small margin of error for surviving retirement amid rising costs and a fixed income having an informed plan is essential.

2. Underestimating life expectancy: Retirees live longer these days. In 1955, Americans lived to be an average of 69.6 years old. The average life expectancy rose to 77.9 years by 2005, according to the National Center for Health Statistics. Life expectancies are averages; many retirees will live well into their 80s and beyond.

3. Low-balling your spending: Would-be retirees tend to be too conservative when projecting their annual expenses in retirement. A couple retiring in their early to mid-60s could spend almost as much in retirement as they did during their working career. Spending in some categories, like travel, may actually increase.

4. Failing to plan for unexpected extras: Many people have a basic retirement plan in their head, with a general idea of their assets, monthly expenses, pension income, or Social Security income. Many people fail to factor in extraordinary cash-flow needs, such as children living at home, home repairs, or extended care for aging parents.

5. Overlooking rising healthcare costs: A 65-year-old couple retiring this year will need about $225,000 just to cover medical costs in retirement, according to Fidelity Investments. This figure, which assumes retirees don't have employer-sponsored healthcare coverage, represents a 5 percent increase over 2007 and a whopping 41 percent jump from 2002. Meanwhile, the number of large employers offering retiree health benefits is falling.

6. Ignoring inflation: Don't underestimate the impact inflation will have on your retirement plan. If you're 65 today, an expense that currently costs $100 will cost $180 by the time you're 80, assuming an inflation rate of 4 percent. Plan your retirement with the assumption that the cost of living in your later years will considerably outpace that of your earlier years.

Speak with your estate planning team today to make sure your retirement plan works for you so you only have to retire once.

Long term care insurance can be expensive. Fortunately, the government recognizes the importance of long term care insurance to avoid overwhelming the Medicaid program and provides some income tax relief in the form of limited deductions for premiums paid.

In order to deduct premiums paid for long term care insurance the policy must be a "qualified policy" as defined by the IRS. A qualified policy is one issued after January 1, 1997 that adheres to certain regulations established by the National Association of Insurance Commissioners. Policies purchased before January 1, 1997 may still be treated as "qualified" if they are approved by the insurance commissioner of the state where it was sold.

Once you have established that your long term care insurance policy is a "qualified policy" you can then review the deductibility limits. Long term care insurance premiums are treated as un-reimbursed medical expenses for income tax purposes. In order to deduct these premiums, the total of your un-reimbursed medical expenses must exceed 7.5 percent of a taxpayer's adjusted gross income. For the purpose of reaching the 7.5 percent threshold you include the lesser of the premium you actually paid or the ceiling below.

If you are 40 or under on 12/31/08, the maximum portion of your long term care insurance premium considered "health insurance premiums" is $310.

If you were between 41 and 50 on 12/31/08, the maximum portion of your long term care insurance premium considered "health insurance premiums" is $580.

If you were between 51 and 60 on 12/31/08, the maximum portion of your long term care insurance premium considered "health insurance premiums" is $1,150.

If you were between 61 and 70 on 12/31/08, the maximum portion of your long term care insurance premium considered "health insurance premiums" is $3,080.

If you were over 70 on 12/31/08, the maximum portion of your long term care insurance premium considered "health insurance premiums" is $3,850.

For example, if you are 62 years old at the end of 2008. You can include $3,080 or the total amount you actually paid in premiums for qualified long-term-care insurance — whichever is less — in your medical expense pot. If the total pot exceeds 7.5% of your adjusted gross income, you can deduct the excess on your Schedule A.

Remember the rules are different for business owners, so check with your accountant.

Before you choose a nursing home for a loved one you may want to take a look at the "Special Focus Facility" list. The "Special Focus Facility" list is published by the Centers for Medicare & Medicaid Services to monitor certain nursing homes with a pattern of deficiencies.

What is a SFF?

Facilities can appear on the SFF list for a number of reasons. These reasons include: more deficiencies than normal, more serious deficiencies, or a pattern of deficiencies that persists over a long period of time.

Special Focus Facilities are inspected twice a year, more often than normal facilities. The Centers for Medicare & Medicaid Services typically expect a final resolution of the facility in terms of graduation out of the SFF classification or termination of Medicare and Medicaid participation within 18-24 months.

What Can We Learn?

The SFF list reports important information that any family considering a nursing home on the list should consider. The list first identifies facilities newly added to the program. The list then identified facilities that have improved, have not improved, have graduated and that have terminated participation in Medicare & Medicaid.

You can download the Special Focus Facility Report here: http://www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFList.pdf

New Jersey recently issued their updated numbers for calculating Medicaid eligibility in 2008. They are:

Minimum Community Spouse Resource Allowance - $20,880.00
Maximum Community Spouse Resource Allowance - $104,400.00
Resource Allowance for an Individual - $2,000.00
Resource Allowance for a Couple (both husband and wife in a nursing home) - $3,000.00
Minimum Monthly Needs Allowance - $1,711.25
Maximum Monthly Needs Allowance - $2,610.00
Monthly Personal Needs Allowance - $35.00
Shelter Standard - $514.00

Standard Utility Allowance:

• $344.00 – heating
• $210.00 – non-heating
• $29.00 – telephone

Average Cost of Nursing Home - $6,655.00
Income Cap Amount - $1,869.00
Home Equity Limit - $750,000.00