Finances

Don’t Gamble With Your Financial Future

As we get older, it is natural for our thoughts to turn towards the future and if we are financially ready for what may lie ahead. If you are looking to get your finances in order but not sure what to do, we asked two experts what financial advice they recommend for people over the age of 50.

The number one decision to make after turning 50 (or even 18) is to put together a proper estate plan. Many people, especially older adults, dismiss the importance of planning because they don’t understand what “estate” means or they believe it applies only to people with significant wealth. An “estate” includes anything a person owns — homes, bank accounts, automobiles, and additional assets.

Future care is something that many fail to contemplate, which can result in not being able to find preferred care or running out of money to pay for care. Long-term care costs can rapidly deplete savings without proper planning. I personally learned this the hard way watching my beloved father lose his retirement savings rapidly after a sudden accident in his home required that he received ongoing care. That experience prompted my transitioning from litigator to estate planning and elder law attorney to help guide others through options for maximizing financial protections and preserving health care decisions as they age. Please do not wait until an adverse medical event forces your family to act on your behalf financially or medically.

Secondly, do not plan without an attorney! I have worked with many clients who thought they could put together a plan on their own, but the truth is, people do not know what they do not know. Even as a seasoned litigator, I had no idea how to help my dad after he fell. Anyone preparing financially for older age should seek legal assistance well before there is a need for care to learn the options, plan for what type of care is desired, and develop a financial strategy to pay for it. People often do things with the best intentions without realizing legal or tax consequences that could cause more harm. We focus on educating clients so they can make decisions and revisit those choices as they age. By investing in proper planning now, people avoid the need to pay significantly more later.

I know it is not easy to discuss the end of life, but I also know the power of planning. Once you have the hard discussions and put proper legal documents into place, you move forward with a sense of relief — and give the best gift you can possibly give to the people you love the most.

— Michelle Tupper Butler, Attorney and Founder of Tupper Butler Law PLLC, Estate and Long-Term Care Planning

It can be difficult when a person is no longer able to take care of themselves. How do you plan for this? Although longterm care insurance has been in the marketplace for over 40 years, the early 2000s found a surge in product availability and a population of Gen Xers and baby boomers who added this as a cornerstone of their financial/retirement plan.

According to a variety of sources, a person over the age of 65 has a 70% chance of requiring substantive care as they age. However, purchasing coverage when it’s needed isn’t an option. At this point, personal financial resources become the avenue in which a person pays for their care when they can no longer care for themselves.

Today, very few products are offered that provide care of this type. Many life insurance companies offer long-term care as an additional coverage to life insurance contracts. The policy will pay a death benefit or the cost of care.

The potential need for care and purchasing it at a younger age is the best way to protect a person financially. The lower cost of premium, spread out over 30 years, remains less in cost than waiting until a person is 60 and paying premiums over 20 years. And, if a client waits, the risk of developing a condition that would make them uninsurable is a risk factor too. Purchasing longterm care while a person is still young and healthy is every bit as important as the continued contributions to their 401(k) or other financial planning they may be doing.

Extended liability coverage is the second most important asset protection a person should have. In the form of a Personal Liability Umbrella Policy, this coverage adds an additional layer of financial protection that extends to your vehicles, home, and any other personal liability (slander for instance) that could happen. The insurance company protects an individual from a lawsuit that exceeds the liability limits of their auto or homeowners policy.

— Robin Brown, Insurance Agent, State Farm Insurance

By Lindsay McDonald

Summer 2023 / Today's Transitions