As a member of the Silent Generation (born between 1922 and 1943), you have paid your dues. You probably raised a family and have left the workforce – you deserve an enjoyable retirement. That can be achieved, but the pace and complexity of today’s world means you’ll need to give yourself a periodic financial checkup.
Do you have enough money?
Given increasing life expectancy as a result of improvements in medicine and science, concerns about outliving your money take on added importance, even when receiving Social Security and pension distributions. While the “4% rule” regarding annual portfolio withdrawals remains a useful reference point, it is important to periodically re-evaluate your spending and portfolio performance to make sure you still have enough money to get you through retirement.
How is your health care?
In light of those increased life spans, health care costs have become a huge consideration in retirement planning. To address this concern, you may at some point have purchased Long Term Care Insurance. If so, it is a good exercise to review the terms, especially if it is an older policy. For example, is your policy compliant with the 1996 Health Insurance Portability and Accountability Act (HIPAA)? Does it include a rider to adjust for inflation, and provide for in home care?
As a further note, you might be able to link an existing resource, such as a non-qualified annuity you may have, to long term care coverage through premium payments that could have favorable tax treatment, the addition of a rider providing enhanced benefits should you need care, or an exchange to a new annuity with greater flexibility to address needs as you age. (At Pinnacle, we help clients analyze these possibilities.)
Is your estate plan current?
Hopefully, you have estate planning documents in place to provide for the disposition of your assets, and for the management of your affairs in the event you become unable. Lifestyle changes in retirement can create the need to review those documents to make sure your intentions are still covered. For example, if you have relocated in retirement, do your documents reflect the laws of your new domicile? If you have re-titled real property in the name of a revocable living trust, is your title insurance on the property still valid?
Do the people who need to know, know?
While your generation is noted for its admirable self-sufficiency, it is important to communicate with your ‘team’ to keep them informed and coordinated in regard to your estate and financial plans. Are family members, professionals, and appointed fiduciaries aware of your intentions, and do they understand their respective roles? Do the appropriate parties have access (including electronic passwords) to the important documents and contact information?
While you should enjoy your retirement, it’s also important to periodically review your situation to make sure that you can sustain it. Answering these four questions will help you do that.
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