Your most important asset — it’s not what you think
A wise person once said, “Do not regret growing older. It is a privilege denied to many.” I agree. I also firmly believe that with privilege comes responsibility. With this in mind, as we age we must learn how to manage the risk of getting older. This requires attention and planning. Herein lies a problem.
Even if age is just a number, it’s often difficult for people to think about getting older. And when something is hard, there can be a tendency to procrastinate. That said, you might be wondering why I believe people procrastinate with regard to aging. After all, as much as we may want to, we can’t slow down (or stop) the aging process.
Since I’m a writer, who also happens to be a financial advisor, you might expect me to start talking about saving more, long term care, assisted living homes, etc. While those things can certainly be helpful, that’s not where I want to direct my focus.
I believe the most important asset that we can all try to manage as we age is our independence. Few people plan to depend on others as they get older, but if they don’t understand how to manage and hold onto this precious asset, a variety of factors threaten to take it away. That in mind, we must identify and take ownership of the things that drive our independence.
Here are some tips for each decade.
1. In your 50s — you need to manage your health care directives.
You may have created a will in your 30’s or 40’s, but as you age your focus really needs to shift toward your living will and power of attorney. It might seem counterintuitive that an article about aging would begin with a tip in case you don’t, but estate planning plays an important role in your independence through every decade of your life. These documents are absolutely the key to making sure that your wishes are carried out.
It’s difficult to think about a health crisis or an accident happening (for example, early onset Alzheimer’s, stroke, heart attack, etc.), but proper planning can help ensure that your requests are met. It’s your life and your independence that’s at stake. Make sure you have a say about your care by having it on paper.
discourage some owners from treating customers to tickets or a golf game, others will decide that paying for entertainment is a worthwhile investment in their companies’ future because of the goodwill it creates. That’s good business sense, says Ken Rubin, a CPA with Rubin Brown in St. Louis.
“Normally, our general statement is, don’t let tax considerations drive the business decisions,” Rubin says. Or, as tax advisers sometimes tell their clients: Don’t let the tax tail wag the dog.
Employee expenses
The law also eliminated the deduction owners could
take for subsidizing their employees’ commuting costs. Similar to their decisions about entertainment expenses, owners must decide whether they want to continue giving employees money toward their mass transit fares or parking tabs; given the tight labor market, owners might want to continue providing the benefits to make their companies better able to compete for talented workers. And taking the benefit
2. In your 60s — you need to manage your home and your belongings.
By the time most people reach this stage of life, their children are finished college and starting professional lives and families of their own. For that reason, it’s a great time to start thinking about your home. The key to your independence could come as a result of downsizing. Downsizing makes life easier to manage as you age. Many people realize this and it’s a good idea, but for a variety of reasons people have a hard time doing so. I believe it’s largely because this requires downsizing all of your belongings as well. It’s hard to go through a lifetime of stuff,
away could be a morale-buster, says Leon Dutkiewicz, a CPA with Citrin Cooperman in Philadelphia.
“When you run the math, you’re going to lose more in goodwill than you would from losing the deduction,” he says.
Employees also lost a popular deduction — for job-related expenses like the cost of tools, uniforms and publications related to their work. Owners who want to give their staffers a
3. In your 70s and 80s — you need to stay connected.
As you reach your Golden Years, typically defined by 65+ years old, one of the biggest factors in maintaining independence is your connectedness with community. Independence should never be confused with becoming disconnected from other people. When people are in community, others can help encourage them to eat healthy, maintain activities they enjoy, engage in conversation and maybe even maintain or find new ways to make contributions to society. Having a purpose and a hope is largely what keeps people going in their youth, and it’s worth noting
break might want to take on those expenses and deduct the costs.
Net operating losses
Businesses that lose money no longer have the ability to “carry back” their losses to offset earnings in previous years and get refunds on taxes they paid. The law does allow companies to carry losses forward to an unlimited number of future years, helping them reduce taxes during profitable that people never stop needing these things. I believe the healthiest and most independent lives are lived when people spend time with other people. Make this a priority and never stop.
I hope you’ve realized that planning for the responsibility of aging is so much more than a financial matter. Taking positive steps each decade is the key to maintaining the independent life that you’ve always envisioned. It’s your one precious life to live — make it a great times.
Although the absence of carrybacks takes away some flexibility for businesses, it isn’t likely to be an issue for companies in a strong economy when businesses are doing well, Rubin says. It can, however, be an issue for companies like restaurants and retailers.
“It’s a bigger deal for cyclical-type businesses that will make money one year, lose money the next,” Rubin says.
The key to your independence could come as a result of downsizing. Downsizing makes life easier to manage as you age. Many people realize this and it’s a good idea, but for a variety of reasons people have a hard time doing so.
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