Planning For Your Later Years

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“When he was younger, our Senior Financial Planner, Chuck Conrad, was a member of an elite Army Ranger unit, and back then proper planning could make the difference between life and death for himself and the others in his squad. His instructors were adamant about teaching these soldiers the Army’s “5 P’s,” which were: “Proper Planning Prevents Poor Performance.”

While financial planning may not necessarily be a life or death proposition, it certainly could be the difference between a comfortable retirement, and having to move in with your kids because you ran out of money.

The art of proper planning entails three important components: identifying potential risks, assessing their probability, and then having a realistic plan to deal with them. Since everyone’s situation can be different, the role of a Financial Advisor is to help each client develop a personalized and unique strategy to deal with his/her own potential risks. One of the most comforting things a person can hear who is going through a crisis is, “Relax, we’ve planned for this.”

In previous articles we have discussed how to develop a plan that addresses the concerns of being able to maintain a current standard of living, and not running out of money in retirement.

In this article I would like to address the issues of aging and dealing with potential changes in your health.

As we age, concerns about health and cognitive issues can become a significant concern. A major or lingering health issue can not only drain a retiree’s finances, but could also set up a situation where someone else may have to step in and either assist, or completely take over making financial and health related decisions on that person’s behalf.

Proper planning can help avoid a potential crisis situation and ease the transfer of decision making to the person with whom you feel the most comfortable.


Housing Issues
Housing is a common issue that has to be dealt with in the event of a long term illness, injury, or some cognitive impairment. Many times a person has to move into a more suitable residence or an assisted living facility, as a result of such situations.

By planning ahead, and anticipating these issues years ahead of time, it may prevent the anxiety of having to find and move into new housing, at a time when you may be already stressed with your medical issues. For example, if you currently live in a two story or split level house, or your laundry facilities are in the basement, you may consider moving into a ranch home or condo where everything is on the same level.

Many times moving into an apartment may also make sense since there are no maintenance issues, and if need be you could move without the hassle of having to sell your property. Making this change before an event happens may prevent a lot of stress and heartache for
you and your family.

Financial Decisions
The second major issue to address is who is going to potentially make your financial and health decisions.

At some point in our lives most of us will have to rely on someone else to make decisions for us. Either because of medical or cognitive issues, someone may need to step in and pay our bills, file our taxes and handle our investments.

It is important that you feel very comfortable with who that person may be. In the absence of naming a specific person or persons, the court may have to step in and appoint someone.
That person may or may not be who
you would have chosen.

This can be simply avoided by naming a financial power-of-attorney and a health power-of-attorney (POA). This would assure that, if the need arises, the person with whom you feel most comfortable will be making those decisions.


Who Should I pick?
How well do you trust the person? This person may have complete control over your finances, so you want to make sure they will be acting solely in your best interest, and not possibly succumbing to outside influences from other family members or friends.

How far away do they live? All things being equal, you may want to choose someone who is nearby if possible.

How hectic is this person’s life already? Being a POA is a big responsibility. Thus, consider such issues as you choose the person who could more easily handle these additional duties.

How organized are they? It may be better to select someone who tends to be more detail-oriented/analytical to handle these important responsibilities. Remember that the results of the actions taken/decisions made by your designated POA(s) will have a direct impact on your healthcare and financial well-being.

As difficult as it may be, it is important to have these conversations with your family well in advance. It is also important to have these conversations with the people you are asking to be your power-of-attorney, to make certain that they have a very clear understanding of the duties and responsibilities associated with a POA and are willing and able to serve in that capacity.

Typically you will also want to name a back-up person in the event the primary person can’t assume or continue his/her duties as POA.


Tying It All Together
With a qualified advisor, proper planning doesn’t have to be difficult or complicated.

The key takeaways here are:

  • Realistically assess your current situation and what your unique future risks may be.
  • Be very clear about who you wish to be making your healthcare and financial decisions. Keep in mind they don’t have to be the same person.
  • Have a discussion with these individuals well ahead of time and be transparent about the responsibilities involved.


And remember, “Proper planning prevents poor performance.”