As a financial advisor for over 30 years I shared with my clients the importance of getting their financial house in order.
I stressed seven things they must do to prepare themselves for the future. I’m not suggesting that these are items that you should do but items that you must do. Let’s look at each of them.
Review your will (assuming you have one) and note who is your executor, executrix or personal representative. This is the person who will carry our your wishes when you die, the person who will pay your outstanding debts and distribute your assets as you specified. Make sure that this person can handle details and is well organized. And often it may not be your spouse. Make sure your children know this person too. They may have to deal with him or her extensively.
Select the right person to be your health care proxy or health care agent. This is the person who may have to make life and death decisions regarding your health care if you cannot make them yourself. Do they know under what circumstances you would not want life continued? And who you want to take care of you? Sit down with them and have a heart to heart conversation. Share with them all your wishes and concerns.
Create a three ring binder to reference all your important financial information. List all insurance, investment and retirement accounts and their beneficiaries. (Make sure the beneficiaries know who they are). Also list all your advisors including doctors, lawyers, accountants, investment advisors and religious counselors and how to contact them.
Keep a current tally of all your Internet accounts including URL address, user name and password. Make sure this list is current. I have found the best way to do this is to utilize a secure smartphone app that is easily accessible to you and one other person (Your spouse, child or advisor). Keep it up to date. Passwords change all the time and if your family doesn’t know the correct password they will never be able to access your information.
Name two people to have the durable power of attorney for your financial affairs. Most likely it will be your spouse and an adult child. This power gives the holder the right to carry out any financial transaction in your name, write checks, sell stocks, etc. Obviously it is important that you select people you can trust. Do not name two children with the same power. That is a recipe for disaster. Give one the power and name another as the backup.
Set up a family meeting with your spouse and adult children to discuss your future retirement plans. Research has shown that only 25% of retiring baby boomers have shared their plans with their children. Where do you plan to live? What do you plan to do (travel, part time work, volunteering etc.) and who will take care of you if one of you needs extensive care? It is not necessary to go into detail regarding your financial affairs unless at some point you may need financial support from your children.
Enjoy your retirement fully and without concern knowing that you are well prepared for any situation because you completed the six steps I have listed above.
For over 30 years Robert Mauterstock was a financial advisor working with hundreds of families to help them reach financial independence. About ten years ago he sold my practice and decided to focus my efforts on a passion he had developed during those years. Robert became very concerned about parents’ inability to communicate their wishes and concerns to their adult children. In too many cases he saw the tragic results of this lack of planning. As a result he has spoken to groups all over the country and written four books dealing with the importance of intergeneration communication. He has been a Certified Financial Planner since 1987. He received my BA degree in Social Psychology from Princeton in 1968 and a Master’s Degree in Education from the University of Connecticut in 1975. He served as a Naval Aviator from 1969-1974. His most recent project is training financial professionals to become Certified Elder Planning Specialists.
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