Retirement is not just about the size of your nest egg. There are several considerations for a comfortable retirement experience in addition to a financial retirement plan. These considerations extend to where you live, housing options, and healthcare quality and choices. Most importantly, what activities will you do in retirement to stay mentally and physically fit? Here’s a short list of considerations to add to your retirement checklist.
Healthcare Needs for a Healthy Retirement Experience:
- Do you have insurance that will cover catastrophes?
- Do you live in proximity to medical specialist you may need to consult?
- Is your HMO or health plan available where you plan to have a second home or move?
- If you plan to travel outside of the US, does your health plan cover you?
- Do you have long-term care insurance? (Don’t make the mistake of thinking Medicare pays.)
Retirement and Moving Your Residence
- What are the tax rates in the community—property taxes, state income tax, state sales tax—and do they tax retirement income and social security income differently than other income?
- If you reach an age where you cannot drive, will the public transit take you to your favorite places?
- Is the climate satisfactory in all months? How about allergy months (e.g. spring time)?
- Is there an adequate selection of senior housing complexes, assisted living facilities and nursing homes and what is the cost?
- Is there an active population of retirees in the new area and people you can befriend?
Retirement income structure
- Does one spouse have a pension that ends upon death? Your retirement consultant can show you how to possibly replace that income.
- If both spouses are eligible for Social Security income, there may be ways to maximize the benefit—check with a retirement planner.
Estate planning is not just for the rich. It is for anyone that cares about their heirs. In fact, most aspects of estate planning basics have little to do with money.
Estate planning basics do address the eventual and economical distribution of your possessions and authority but more importantly, how you take care of your loved ones. Many of you may think you don’t have an estate plan—but you do! Federal and state rules will determine who gets what and how much, and how you will be treated if you become very ill. If not prepared with basic estate planning knowledge, it costs money and heartache.
Putting your estate in order can be complex. It depends on how many assets you have, where they are, your family structure—children, divorced and previous children, state laws—and more. But, no matter how small or large your estate is, here are the four tools of basic estate planning.
- Will or trust
- Durable power of attorney
- Living will
- Health care proxy (medical durable power of attorney)
Your Will shows your wishes for disposition of your assets and names a guardian for minors. In it, state how property in your name should be distributed, name an executor to be in charge of carrying out your wishes, and provide for payments of costs incurred in settling your estate. And for your minor children, designate a guardian and name a trustee to protect their inheritance. One estate planning basic is to use a trust in place of a will because it maintains privacy and avoids court involvement in the settlement of your estate. Additionally, trusts typically contain conservatorship provisions. If you should lose your mental capacity in your old age, do you want your family to be in court about your care, or would you rather have a written plan in advance? Estate planning basics call for planning ahead.
Your Durable Power of Attorney gives someone else permission to manage your affairs if you become disabled or incapacitated. With it, as soon as you become incapacitated, your designated person, i.e. your spouse, adult child, or anyone you trust, can manage (pay bills, make decisions) your affairs or you can restrict that power to only particular assets or accounts. Don’t wait! You can’t create durable power of attorney once you’ve become incompetent.
Your Living Will—expresses your wishes to your doctors when they must consider use of life-sustaining measures. This is your declaration on what life-sustaining medical treatment you will (or will not) allow if you become incapacitated. For example, you may request that artificial nourishment be (or not be) withheld if you become terminally ill. You may recall the Mary Schiavo case on this issue which became a national news story only because these estate planning basics are ignored.
A Medical Durable Power of Attorney (or health care proxy) is a crucial and basic estate planning tool that designates someone to make health care decisions on your behalf in the event you no longer can. It’s a document that gives a person you designate permission to make health care decisions on your behalf if you are unable to do so in the future, perhaps, consistent with your living will. Talk to the person before appointing him, and be sure he or she understands and is comfortable with your wishes, and is strong enough to carry them out despite some family members’ objections.
Seek professional help in planning your estate—consistent with your state laws and your particular circumstances. No one will tell you about the estate planning basics. Be proactive and ASK your retirement advisors what you need to do to get your estate in order.