Planning Through The Ages: Top Tips for 80 Somethings

Planning Through The Ages: Top Tips for 80 Somethings

Once you’ve reached your eighties it’s time to relax, reflect on life and enjoy the company of friends and family.  While this is the good part of retirement, it can also be a time of tremendous financial stress with potential long-term care costs and a need to get help managing finances on the horizon.  Here’s our list of top financial tips for those over age 80 to help you enjoy your life and keep financial stress at bay.

mature couple watching coastal view --- Image by © Colin Hawkins/cultura/Corbis

1. Review Your Income and Expenses It’s a good idea to tally your income from Social Security, any pensions and required distributions from retirement accounts and compare it to the tally of your expenses.  If your expenses are more than your income, next determine if you can meet the shortfall with a sustainable draw (typically 4%) from your remaining accounts if any.  If this combined income doesn’t cover your spending, find a way to cut back on spending or consider selling your home and renting to add to your nest egg.  On the flip side, if you have no problem covering your expenses don’t be too stingy with yourself.  Make sure you spend what you need to make sure your home is a safe and comfortable place for you to live and consider getting help running errands if you’re not comfortable driving or being out and about alone.

2.  Automate Deposits and Bill Paying.  Bill paying and depositing checks may be a breeze today but surprisingly they can become overwhelming over time so why not simplify things now using technology?  Your Social Security check is likely already directly deposited into your checking account, so consider having other recurring income sources, like pensions or recurring draws from retirement accounts to be directly deposited as well.  Next, set up the direct payment of recurring bills either through the service provider directly if they offer automated billing services or by setting up auto bill pay of certain bills through your bank.  A family member or friend who is computer savvy can generally help you set this up in an afternoon.

3. Prepare To Get Help With Finances.  Your mental abilities may change over time without you even being aware of it so it’s wise to have an open discussion with loved ones now.  It’s important to let them know where you keep your records, what you owe and own and wise to ask them to occasionally check to see if you’re staying current on bills and that no one is draining your resources.

You’ve likely done your estate plan by this stage in life but if you haven’t, it’s time to get a plan which includes a document called a power of attorney.  This form allows you to name someone you trust as agent or two individuals as co-agents to act on your behalf if you become incapacitated.  The form varies from state-to-state, but you can generally give an agent fairly broad authority or limit authority to just certain actions.   Typically the agent’s power to act only springs into action when triggered by your incapacity (defined in the document).  However, you might decide to make it immediately effective if you want to hand over the financial reigns today.  Even if you appoint another to act on your behalf now, talk to them about giving you some ability to pay every day expenses through having access to a minimally funded checking account or debit card.

4. Watch Out For Fraud.  Unscrupulous people prey on the over 80 population because they more frequently let others into their home or financial life to lend a hand and are more likely to have diminished capacity.  Sadly, you need to be mindful of who you trust.

People often fail to report fraud out of embarrassment or fear that they’ll lose their independence.   But if you suspect you’re being scammed, contact your state’s adult protective services agency.  Speak up now to help stop any crime before it gets too far.   Also, as a precaution, when executing a power of attorney for financial matters, consider appointing co-agents so that each agent has the ability to see bank balances and cashed checks.

5. Simplify Your Investments.  Over the course of a lifetime you may have accounts spread out among many different custodians.  Consider consolidating your investments to simplify the review of your accounts and associated withdrawals that create your retirement paycheck.   Having a financial professional on your team can help you stay diversified, avoid taking unnecessary risk and remind you to take your required minimum distributions from your retirement accounts.

6. Review Long-Term Care Options. At some point you might feel the maintenance on your home is too burdensome or you may need help in your home with the activities of daily living (getting around, eating and bathing).   You also might eventually want or need to move to a retirement living facility or one that provides that provides long-term care (LTC).  Unfortunately Medicare doesn’t cover LTC expenses, so talk to your loved ones about the costs and your options.  You might need to free up funds to provide for care by selling your home and buying a less expensive home or deciding to rent.  If you are fortunate enough to be able to cover the costs of in-home care or your own room at a LTC facility or a more expensive facility, it may be wise to talk to your estate attorney as few estate plans discuss the use of your assets for your care during incapacity.   You may want to clarify the extent to which you want your assets to provide for your care even if this leaves little to inheriting beneficiaries.

7. Review Advance Health Care Directive. While it can be difficult to talk to loved ones about the responsibility of making key health care decisions for you, it’s an important discussion, particularly if you feel strongly about what should be done in certain situations and what life sustaining methods should or should not be taken on your behalf.  At a minimum, you’ll want to ensure that those you’ve appointed as a(n) agent(s) in your health care directive are willing to serve, understand your wishes and have a copy of the directive.

8. Review Your Estate Plan. You likely have a plan as to whom and how key people will distribute your assets and care for you on your incapacity or death, but if you haven’t reviewed it in the last five years or since a major life event (e.g., marriage, divorce or the birth or death of a loved one) it’s time to meet with your estate attorney.  Be sure to also check your beneficiary designations on life insurance, annuities, IRAs and workplace retirement plans since neither your will nor trust controls who gets these assets on your death and you want to make sure these potentially valuable benefits pass to the right people right now.

If you have prepared a financial plan and are confident that you have more resources than you’ll ever use during your lifetime, talk to your attorney about how to best make gifts to loved ones and charity.  Not only will this allow you the joy of seeing how your gift may benefit those dear to you during life, it might be beneficial from a tax standpoint.

Disclaimer: This has been provided for informational purposes only and should not be considered as investment advice or as a recommendation. Beacon Pointe does not endorse and is not responsible for the content, product, or services of other third party sites or references. Beacon Pointe does not offer legal or tax advice.  Private legal counsel alone may be responsible and relied upon for these purposes. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. CIRCULAR 230 NOTICE:  To ensure compliance with requirements imposed by the IRS, this notice is to inform you that any tax advice included in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of avoiding any federal tax penalty or promoting, marketing, or recommending to another party any transaction or matter.

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