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A Punchlist for Smart Pre-retirement Planning
By Michael FitzPatrick
It has been said that no one plans to fail, but most people fail to plan. This is certainly true when considering financial and insurance planning for retirement. A recent report published by the Library of Congress included this shocking statistic: for 40 percent of elderly recipients, Social Security contributes more than 90 percent of their income, and for one-quarter of recipients, it is their only source of income.1
Statistics like this steel the resolve of those Americans who do take retirement planning seriously. However, planners need to know that in addition to saving and investing for retirement, there are other important steps that are critical to successful aging. Dubbed 6 by 60™, these steps were outlined by author and speaker Marilee Driscoll on Comcast Cable’s Money Matters Today show in September. It’s best to check off these items by age 60, but if you’re already 60+, this is your wake-up call! - Find a trustworthy financial advisor
(in addition to a lawyer) who knows your situation, your future plans, and what is and isn’t important to you. This is important even for married couples, especially those who do not share equal interest in financial matters.
- Simplify your finances
. You don’t need your money in five different mutual fund companies, for example. You don’t need to carry six credit cards. Simplicity makes everything easier as you age.
- Know your Plan B for LTC™
. If you need long term care (LTC) in the future, what will that care look like, and how will you pay for it? Many of the most attractive options are private pay only. Look into purchasing long term care insurance. This is the only insurance designed to cover home-based or facility-based care. Protect your independence, dignity, and nest egg with this insurance.
- Advance Care Directives
. Do you want extraordinary treatments done if you are unable to communicate your wishes? Without a valid advance care directive (usually a health care proxy), it can be very difficult to have your care wishes fulfilled. Inquire at your doctor’s office, lawyer’s office or even your hospital for information and valid forms.
- Distribution Planning
. Double check the titling of all your assets, and the beneficiaries on all your insurance policies and accounts (including qualified retirement plans and IRAs). Many assets are passed along to stated beneficiaries, regardless of what your will states. Make sure that you have a valid will, and consider a durable power of attorney, which authorizes someone to act on your behalf if you are mentally incapacitated. Estate planning sounds like something that’s only for rich people, but it is for everyone.
- De-clutter!
Many people downsize in retirement, and some want to but are overwhelmed with an abundance of stuff. Down the road, it has to go somewhere! Who will get your prized possessions? Consider giving cherished items to your loved ones now, when you can explain their value and hear their thanks. Have valuables that you are keeping appraised so that relatives don’t sell valuable items at a tag sale.
Michael FitzPatrick, co-founder of the LTC Partnership, LLC, educates people about developing a plan to protect against the catastrophic financial and emotional costs typically associated with long-term care. Since long-term care insurance is one of the options that people consider, Mr. FitzPatrick has the unique ability to shop among 11 different long-term care insurance carriers on his clients’ behalf. He can be reached at 973-394-0053 or mbfitzpatrick@theltcpartnership.com.
November 6, 2006
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