Issues Unique to Older Individuals

Issues Unique to Older Individuals

Presented by Jared Daniel of Wealth Guardian Group

What is it?

You may view getting older with mixed emotions. While you look forward to retirement, you worry about your finances and the cost and availability of health care, and you wonder what will happen to you if you become unable to live and care for yourself independently.

Managing your retirement income needs

What you'll have vs. what you'll need

How much income you'll need and how much income you'll have go hand in hand when you're planning for retirement. While some of your expenses may decrease in retirement (for instance, you may no longer have a mortgage on your home), some of your expenses may increase (such as health care expenses). You'll need to evaluate your lifestyle, consider how inflation may affect your savings, and determine how to position your assets, among other things. Your main sources of retirement income will likely be Social Security, retirement plan and pension income, and income from investments. You'll need to determine whether income from these sources will be substantial enough to meet your needs.

IRA and retirement plan distributions

You may be eligible to receive a distribution from an IRA or an employer-sponsored pension plan. You'll need to decide how and when to take this distribution, considering your income needs and the income tax consequences.

Social Security

Like most Americans, you will likely be eligible to receive Social Security retirement benefits that will provide much-needed income during retirement. How much benefit you receive depends mainly on the age you begin receiving benefits and your average lifetime earnings. Although your Social Security benefit is important, you shouldn't rely on it as your sole source of retirement income; rather, you should view it as a piece of your total financial picture.

Health care issues

Health insurance

Most Americans age 65 or older will rely on Medicare to pay for their medical care. However, you may also want to purchase a supplemental Medigap policy to help defray the cost of services and items that Medicare does not cover or to help pay the deductibles and co-pays required by Medicare. If you need to enter a nursing home and have limited income and assets, your care may be paid for by Medicaid. Veterans of the U.S. Armed Forces may be entitled to care in Veterans Administration (VA) facilities, as well.

Tip:     Health-care reform laws passed in 2010 contain some provisions that directly affect our nation's elder population. If you're a retiree or a senior, you should be aware of how these reforms may affect your access to health care and insurance benefits.

Planning for incapacity

Medical directives

If you become too sick to direct your own medical care, how will you ensure that your wishes are carried out? You may want to execute medical directives for health care such as a living will or health-care proxy that can be followed in the event that you can no longer make your wishes known. Such directives not only protect your rights but also can also prevent family disagreements and court battles over your care.

Property management

You may want to execute a durable power of attorney or set up a trust to make sure that your money and property are managed properly in the event that you become incapacitated and are no longer legally competent to manage your own financial affairs. Planning for incapacity is also a way to avoid burdening your adult children who may be caring for you as you grow older.

Housing options

As you grow older, you may find that your housing needs change considerably. Although you may live out your life in the rambling four-bedroom house in the suburbs or the brick duplex in the city where you've lived for years, you may need to move for social, economic, or physical reasons.

Dealing with the loss of your spouse

Another situation that you may confront as you grow older is the death of your spouse. For many people, losing a spouse is a life-changing event; you'll need to make a lot of decisions regarding your future while dealing with immediate financial concerns such as claiming survivors benefits and settling your spouse's estate.

Jared Daniel may be reached at www.WealthGuardianGroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.