Risking your Retirement
Consider will and long-term care options available
What are things that can kill your retirement?
There are several things that could change your retirement depending on the planning that you have done or unfortunately, the lack thereof.
With people retiring in record numbers, many have made poor choices or failed to plan for many “ what ifs” in retirement. There are several things that should be thought out before retiring or in the early stages of retirement. It is not just always where I will make the most money or largest returns on my account.
In fact, 71 percent of people do not have a current last will and testament and a larger amount of people do not have living wills or powers of attorney. Georgia is not a difficult or expensive state in which to probate an estate, but only if everything is current and properly signed.
If there is no will, it could potentially cost thousands of dollars and a large amount of time, depending on the estate. Most simple wills only cost a couple of hundred dollars and should include a last will and testament, power of attorney, living will and durable power of attorney for healthcare. Proper legal documents are just one part of your retirement plan.
What happens if because of sickness or accident you need home care, nursing care or assisted living care? How will you pay the bill? These questions have made some look into long term care insurance and search for other options. Long term care insurance is a great option for some depending on health history and your budget.
Your advisor should look at many different circumstances and design a program to fit your needs. If you have been turned down for coverage in the past, I also encourage you to work with someone that brokers with many companies because of the different requirements each company has.
If long term care insurance is not an option for you, there could be other opportunities available. Veterans and spouses of veterans have benefits that can be utilized or trust planning might also suit your needs. Pre- planning for funeral needs can also save your estate money and ease your loved ones at the time of loss.
One of the final, yet critically important things to think about while preparing or reviewing your retirement is your investments. Besides health care, investment losses can cause the most dramatic downturn during your retirement. People who lost money during the market drop in September 2001 have just recently been made whole.
If you were taking withdrawals while also taking market losses, this will start a downward spiral in your account and make it very difficult to keep your account to the level to ensure that you will never outlive your income.
One of the rules of investing is “ Pigs get fat and hogs get slaughtered.” You will never win. Stock brokers will try to convince you to stay in and ride out the market more or tell you that you haven’t lost money until you sell the equity. Unfortunately, that advice will not sustain you through the years of a fixed income.
This leads me to the last point and the first thing you will need to do, find someone that will serve your needs. Be careful of brokers that are only out to charge huge commissions and fees to work with your investments.
Also stop and ask yourself when is the last time your broker or investment advisor asked you about your will or long term care options? When did they look at tax returns or have they done a total comprehensive review and provide answers for all the curves that you face in retirement? If you are saying never, it might be time to work with a new advisor.
And before saying good bye, take your retirement statement out and see if there is a variable annuity as part of your account, if there is fire your adviser now.