The big 5-0 is quickly approaching. Inside you still feel as if you’re in your 20’s; but your aches and pains remind you of your age. While you’re still young – 50 is the new 30, right? – take time to address these 5 important items which will impact you financially.
1- For your single children who are age of majority (depending on your state, this age ranges from 18 years old to 21 years old), have them sign a HIPAA release form, health care proxy and financial power of attorney. All documents can be created by your estate planning attorney.
In 1996, Congress created the Health Insurance Portability and Accountability Act (HIPAA) to protect the privacy of your health information. Unless you have a signed HIPAA release form, you cannot access health care information for your adult child. A health care proxy will allow you to make healthcare decisions for your adult child in the event he/she is incapable of making those decisions. A financial power of attorney addresses making financial decisions in the event your adult child is incapable of making those decisions.
2- With your aging parents, discuss the location of important documents including HIPAA release form, health care proxy and financial power of attorney. Please don’t wait for a crisis to have this discussion. It may take several attempts before they speak openly about their finances – be patient and understanding.
3- Begin discussing with your spouse/partner how you envision your retirement lifestyle. Make sure your retirement savings is on track to afford that lifestyle. There is no loan to pay for your retirement lifestyle.
4- Be clear about finances with your college-bound child. Make sure they understand how much you are willing to pay for their tuition, books and lifestyle. The best college is the college you can afford. Many graduates incur significant education debt and have minimal income to repay it.
5- Explore long-term care insurance options. Long-term care includes care you will need as you age such as home care, adult day care, assisted living and nursing home care. While many of us do not want to think about this part of life, it’s a reality because we are living longer. Each state has different costs for each level of care. In Georgia, home care can cost $40,000 annually; adult day care costs $16,000 annually; assisted living amounts to $32,000; and nursing home care totals $68,000 annually for a private room.
It’s not all doom and gloom. If you start addressing these big issues sooner rather than later, you’ll be better prepared for your future.
ABOUT THE AUTHOR:
Niv Persaud, CFP®, CDFA™, CRPC®, is the Founder of Transition Planning & Guidance, LLC. Life is more than money. It’s about living the lifestyle you want and can afford. For that reason, Niv consults with clients on money, life and work. Her approach capitalizes on techniques she learned throughout her career, including as a management consultant, executive recruiter and financial adviser. Her services include spending plan, financial plan, divorce financial review, life strategy and professional progression. Niv actively gives back to her community through her volunteer efforts. She believes in living life to the fullest by cherishing friendships, enjoying the beauty of nature and laughing often — even at herself. Her favorite quote is by Erma Bombeck, “When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left and could say ‘I used everything you gave me’.”