Retirement, Now What?

The transition from working a 40 hour week to retirement can run many unexpected courses. Some people retire before they are ready due to disability or downsizing. For many people retirement means not working, for some people it means working less. Many retirees take part time jobs in retail, fast foods and some have crafts and hobbies that bring in extra income.

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People as they grow older look for things to fill their life with meaning. Volunteering, hobbies, socializing, church, caring for grandchildren and exercise can help fill the days when someone leaves the workforce. Many people in early retirement ask themselves how they ever had time to work.

Hobbies like golf and gardening can keep seniors very busy. However volunteering in the community, church or caring for grandchildren can be more fulfilling. These activities contribute to a healthy active retirement. Programs like Silver Sneakers are targeted at the need for seniors to get moving or keep moving. Silver Sneakers is sponsored by health insurance programs and gives seniors access to gyms like the YMCA and special classes that help seniors stay motivated toward fitness goals.

The most important thing that seniors sometimes underestimate about work is how important the daily social interactions are. It is important to develop and maintain relationships with friends and family during retirement. People who are engaged with friends and family are happier and healthier. So focusing on your social network is essential to a happy and healthy retirement.

Estate Planning Essentials

Estate planning isn’t just for the rich. Certain basic estate planning measures should be taken by everyone. An attorney can help you prepare all of the estate planning documents you need. Some people prepare a will using forms purchased online or at a business supply store. Most people benefit from the advice and expertise of an attorney.

1. Will-  It is especially important for people who have minor children to establish a will. A will determines who will care for your minor children. A will also determines who will get your financial assets, personal items and real estate when you die.

2. Advanced Health Care Directives-  If you become incapacitated while terminally ill and are unable to make decisions about life support, an advanced healthcare directive can communicate your wishes to healthcare providers.

3. Healthcare Power of Attorney-  With a Healthcare Power of Attorney you can identify someone to make healthcare decisions for you in the event of your incapacity. Make sure the individual is good at making decisions under pressure and understands your desires.

4. Living Trust- A trust is legal entity, like a corporation that lives on after you do. If you have a trust you are able to control how assets are distributed long after you die. There are also ways that a trust can minimize estate taxes.

Please visit the CNN Money Estate Planning Primer for more details on estate planning.

 

Long Term Care

Long term care is not medical care, and is not covered by Medicare, or individual health insurance. 

Long term care is for people who need help with the activities of daily living.  According to the Department of Health and Human Services, the "activities of daily living," or ADLs, are the basic tasks of everyday life, such as:

•           Eating
•         Bathing
•          Dressing
•         Toileting
•         Transferring. 

Most long term care happens at home, however long term care can take place in Adult Day Care, Adult Foster Care Homes, Assisted Living Facilities, and Nursing Homes. Medical Insurance does not cover Long Term Care. 

The vast majority of Americans do not have long term care insurance, even though according to the American Association for Long Term Care Insurance, “For someone with a 90-day Elimination (waiting) Period, the lifetime chance of someone buying coverage at age 60 and using policy benefits was 35%. So, 35% will use their coverage and 65% will not. ” The majority of people will use their life savings to pay for long term care, pass along the burden to their family or to the state through Medicaid.

When I ask clients how they plan to deal with the costs of long term care, the two top tongue in cheek responses are I have a .45 next to my bed or my daughter  is a nurse.  Both answers are very unrealistic. What if the daughter who is a nurse needs to work and save for retirement?

In general people who do not have any savings to protect don’t have many choices, their care is going to fall to family and to Medicaid. However there are choices to help people protect their family and their savings from the cost of long term care. Options include traditional Long Term Care Insurance, Short Term or Recovery Care Insurance, Hybrid Long Term Care Life Insurance and Annuity contracts.

U.S. Department of Health and Human Services 1990

American Association for Long Term Care Insurance