Reassess finances as you consider your retirement BY SUE WEBBER CONTRIBUTING WRITER Tim Boys, president of Boys & Tyler Financial Group, Inc., in Eden Prairie, often encourages people to continue working when they become senior citizens. “Financially, people are nervous about where they’re at now,” Boys said. “In years past, our parents had pensions, but very few people have them now. People are finding themselves short of what they’d like to have in retirement.” The difference in philosophies between the generations, he said, is that “our parents worked their tails off, paid off the house and then retired.” “We saw people die earlier then,” Boys said. “But our generation has been enjoying ourselves all along. We got on the ‘bucket list’ early, in high school. We decided not to save and wait, and maybe see the Grand Canyon now.” The philosophy those Baby Boomers have now is to stay busy, he said. “I have a client who retired at 65 and now that he’s 72, says he shouldn’t have done that,” Boys said. “There’s definitely not a cookie-cutter plan on what to do. Some people like to just maintain an office, so they have someplace to go.” All of those philosophies about retirement play into when people apply for Medicare benefits, Boys said. If they continue to work and have an individual health plan through their employer, they won’t need to apply for Medicare right away. He suggests that people connect with a knowledgeable professional who can give them a broad view of the health care market place and help them consider all their options. “They need to have a conversation about how healthy they are, and what they plan to do about health insurance,” Boys said.
“There’s no right or wrong; it’s not one size fits all,” Boys continued. “It’s an individual situation where you have to consider where you’re living, your financial status, and whether you’re going to continue to work and get health care through your employer. Where is your doctor located? Do you want to be able to go to the Mayo Clinic?” The bottom line, of course, is what will it cost? Decisions about whether to get longterm care insurance are wholly apart from Medicare. “Regular insurance and Medicare health care will only pay for a portion of hospitalization long-term,” Boys said. “Nursing care and assisted living are separate costs.” Again, Boys said, there are questions to ask: What’s your plan for the future? Who will take care of you when you get sick? Do you have a spouse? When do you get long-term insurance, and can you afford it? How will your care be paid for? The cost of assisted living may start at $3,000 per month, he said. People who need more skilled nursing care may pay $7,000 or more per month. The high cost of medical care really causes “a huge financial issue for the country,” Boys said. “Few people are prepared for it,” he said. “The government is going to get a huge bill if citizens don’t have the money, or don’t get insurance.” He suggests that people take their planning a step at a time, and start by assessing what kind of health insurance they have now. “Then you should see an attorney and get a will and a health care directive,” Boys said. “Work with someone who can help ‘direct traffic’ for you.” People who have abundant assets don’t have to worry, nor do people with no assets who are receiving medical as-
sistance, Boys said. “The people who have the challenges are in between,” he said. “They may have a home, a retirement plan, and an investment portfolio, but everyone is going to face this.” Boys recalls hearing the late Dr. C. Everett Koop, then U.S. surgeon general, speak at a conference 25 years ago. “He was asked how we can get control of medical costs,” Boys said. “He said we’ll
never be able to do it until we handle our own mortality. Until then, we will always spend everything we can to extend life. Medical people want us to live to be 120, but that may not be the best answer.” Until then, the best advice is to continue to research options, Boys said. “There’s nothing magical about it,” Boys said. “It’s never too early, and it’s never too late.”