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4 Fundamental Strategies for Protecting Your Money as You Age

“There is a fountain of youth: it is your mind, your talents, the creativity you bring to your life and the lives of people you love. When you learn to tap this source, you will truly have defeated age.”  –Sophia Loren

“When I was a boy the Dead Sea was only sick.”  –George Burns

 

Each of us wants to live a long life, and at the same time, not one of us wants to grow old. That’s life.

The prospect of losing independence or needing help with things that we’ve always handled on our own is difficult to think about, let alone plan for. No one wants to imagine the day when they become less adept at caring for themselves or managing their own affairs.

It’s important to keep in mind, however, that:

• As we grow older, each of us will need help at some point.

• It isn’t uncommon for people to resist help because they don’t realize that they’re not as sharp as they once were.

• Age and impairment are invitations to fraud and abuse.

With those fun facts in mind, here are four basic strategies you can use to protect your financials in the aging phase of life.

Plan as proactively as possible. The best time to initiate any planning conversation is before problems arise. Age 65, regardless of a person’s health, is a good time to begin planning for older age. Here’s another reason to approach it from the simple fact of a specific age: it can ease the emotional element for everyone involved. Certainly you should start earlier if you do have health issues.

In either case, an early start will also allow you to set a reasonable pace for what will likely be a series of conversations in the planning process.

Build a team. Taking care of an ill or aging person requires the work of many people, both family and professionals. The plan that will work best will be the result of family thinking, talking and planning together.

This, of course, is easier said than done!

Unfortunately, family is often the reason that this type of planning is so difficult in the first place. Yes, there is love in families, but there is also conflict. If you’ve helped your parents with their financial lives, you may have already discovered a specific type of family tension.

Some key ideas to help promote healthy collaboration:

• The concept of a family team with a common goal should be central.

• State a secondary goal: to maintain respect and connection between family members and professionals.

• Acknowledge that where family members live, what their personalities are, and how much time and money they have, will impact their ability to contribute. Do not expect that family contributions will be equal.

• Employ the services of your financial advisor to schedule meetings in a neutral setting and to guide the agenda.

Choose the correct power-of-attorney. Obviously, the person you appoint as your power-of-attorney must be someone who can be completely trusted. Not as obvious is the fact that you must choose the correct type of power-of-attorney to ensure that it will do the job, even in the event that you can no longer act on your own behalf. Click here to read more about the different types of power-of-attorney, and be sure to consult with your financial professionals when creating this important document.

Establish permission to contact. A worst case scenario: Your TGS advisor is left with no family member to talk to, and no plan in place when you begin to experience physical or mental changes that affect your decision-making abilities.

The remedy: Sign a document that will allow your advisor to interact with chosen family members when there are signs that help is needed.

The first step in establishing permission to contact is a conversation with your advisor to discuss the signs that you believe should prompt family involvement. We often recommend an advisor-led family meeting as a follow-up to bring all parties up-to-date.

Preparing for others to act as an agent for you may be one of toughest types of planning you will do, but just as you plan ahead for college funding and retirement, so should you plan ahead for your later years.


By David A. Burd, CFP®, Managing Director

David has worked in the investment field since 1978. His advisory practice has focused on the financial needs of physicians and medical specialists for more than twenty years.

Co-written by Joan Hill, Communications Coordinator

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