By Steven Buttice, Founder and President, Living by Your Design, Inc.
It’s February and how would you like to be “wiggling your toes in the Florida sand”? You can do it, but it doesn’t happen by accident. Many people have saved a portion or of their income over time so they can enjoy such pleasures. Now is the time they can share their wisdom with their adult children and grandkids the value of systematically saving, even if starting with small amounts, for retirement.
The building up of savings just doesn’t happen and people just cannot expect an inheritance or lottery to provide all of the saving/income they will need in the future. So that is why we create a plan. If you do not plan you will not be able to live the “toes in the sand life” you envision in retirement.
In a global look - Stages of life include the accumulation and the distribution periods. Of course, each of these stages evolve over time. It’s best to start planning early – age 20 or so. It is never too late, but results are better earlier you start planning. Locate a good financial planner that will work with you. They will help with you develop a plan. Then, more importantly stick to it. The plan should be reviewed yearly.
Would you want your wishes to come true even if you weren’t able to help put the plan in place? Legal counsel is very important. Locate a good attorney. Have them develop your Will, Powers of Attorney (POA), and possibly a Trust. It’s important to review as changes such as a child’s birth, marriage or divorce occur, every five years. A question for you: “I am married do I need a healthcare POA?” The answer is YES! It’s always a good idea to appoint the person you want making decisions about your healthcare, should you become incapacitated, and make sure they know ahead of time what your wishes are.
The next question becomes: how do you best guarantee your growing account(s) will be there for you and your family? What if you are not able to work? What if you have an accident and medical expenses? Part of your plan should include medical insurance, disability coverage to provide money if you are not able to work, and life insurance for your family’s security. Qualified insurance agents can assist you with these subjects.
Age 62 and eligibility for Social Security retirement (SS) will happen before you know it. It’s important to know most people wait until full retirement age (66 - 2 months if born in 1955) before drawing SS. In situations where someone is very ill and may not live to age 66; drawing SS at age 62 may make good sense. Your advisers here would include your financial advisor and a Social Security consultant. Note: Social Security is very complicated – do not assume and only rely trusted experts in this field.
As you reach your 50’s, 60’s, 70’s and 80’s your planning changes. Look at your family health, your health (especially chronic conditions), habits, such as smoking, to honestly look at what your future health may look like. Now is a good idea time to discuss what you want retirement to look like. Does it make sense to stay in your home which may include multiple levels and stairs? Do you want to move to a different state? Also, realistically discuss tough subjects like home health care, assisted living communities and nursing homes. Please note: I’m just “never” going to a community is not a realistic option for most people. There are companies such as our office that can assist you in this area.
As you age toward your retirement years your investment mix will become more conservative as you most likely need to protect assets. You will move into the distribution period and your investment advisor will help you with your choices. It is also important to close any back doors where your investments may diminish from health care needs such as homecare or a nursing home stay. Somewhere around age 50 - 60 consider long term care coverage. LTC will help protect your assets for your spouse and family. Also, it will assist you in having an opportunity to secure the best care offered.
Again, in your 60’s, 70’s and 80’s your attorney becomes important. Review all your legal documents and plan for your estate. Your attorney may be able to help you and especially your family with a quick, easy, and minimum discloser way to deal with ones passing. Now, you can “wiggle your toes in the sand” with peace of mind.
For more information, contact Living by Your Design, Inc., focusing on the issues of Older Americans: legal, financial, Social Security, Medicare, free guidance for residential referral and healthcare issues. Call: 309-285-8088. Website: www.LivingByYourDesignInc.com. Location: 809 W. Detweiller Dr., Peoria, IL 61615.