Planning for That Final Moment

There is a phrase people use when referring to estate planning and all the things you do as a responsible adult so when you get into retirement years, you don’t have to worry about those things. That is because one of the big objectives of retirement planning is to put all of your “affairs in order” as they say so if something came up, your kids would not have to deal with it. So you go through the checklist and make arrangements for your will and your DNR or “do not resuscitate” so the medical people will know what to do in the event you cannot be brought to consciousness.

But one level of preparation for your final years of a very full life that you may not have decided about is funeral preparations. Many funeral homes sell packages where you can pay for your casket and much of the funeral expenses well in advance. This is very appealing because you can think ahead about how you would like the funeral to go and select the casket and make arrangements so there is less guesswork for your family and loved ones if the moment comes up too quickly.

That is the real appeal of preplanning all aspects of what might happen when your final moments come. You don’t want to leave your children to have to try to figure out your life insurance, your estate issues, your will and your funeral if your demise comes along suddenly. Most of these preparations are pretty cut and dried and you want all the paperwork in order, legal and the person assigned to resolve your estate informed and legal so there is no time lost on getting things the way they should be if the moment were to come.

The big step of pre-buying your funeral plot, casket and paying for the funeral in advance is something to give some serious thought to. For one thing, you must be absolutely sure you are in the town where you will want to be buried. Many times later in life, a retired person wants to pack up and move to where the kids are living. That is one of the good things about begin retired and relatively unencumbered by a lot of possessions. If you are living in an assisted living center, the move is just not that difficult. So you don’t want to own property, even if it’s just a burial plot and have to deal with transferring all of that paperwork to another town if you do move with your kids.

But the compelling reason not to put money into a funeral arrangement package is that funeral homes are not great at managing those funds. There have been plenty of stories come out of late of mismanagement of funds buy funeral homes. Or if the company owning the funeral home is bought, many times the new company will not honor your contract with the previous owners and your relatives find this all out just when they least need to hear about problems.

A much better option is to take the same money you would have put into funeral arrangements and put it into a trust set aside just for this purpose. You can name who you want to have access to the trust and even write out in specific detail what you want the money used for and how you want the funeral to go. That form of living will or ethical will gives your relatives the resources they need to conduct your affairs and the directions you want them to have. But they have the flexibility to pick the funeral home and buy the plot that seems right at the time. The money can accrue interest and it is secure because it is still owned by the family right up until it is needed.

The desire you have to get your final arrangements arranged is a good one. But thinking through some of the problems that can come up if you do too much prearranging gives you the wisdom to make the right choices so you can enter your retirement years knowing that everything is arranged when and if, God forbid, the moment of your departure comes along.

The Many Levels of Retirement Planning

The concept of retirement planning brings up the image of you working with your investment counselor or setting up your 401K so you have adequate financial resources when you retire. And it is true that a big part of being ready to retire involves being ready financially to be able to step out of the work world and start to take life easier.

But just as life is not just about making money, retirement is about so much more than having the money not to work. Preparation for retirement also means preparing to live a simpler life, preparing to become a “senior citizen” and a grandparent and preparing to look at life differently.

Your health care is going to be an important issue in your retirement years. As you enter retirement, you may be strong as an ox and active and full of health and life. But any of us can fall prey to poor health or accidents. And if your employer from whom you retired does not extend your health care insurance for you to continue your coverage past your employment, you should make other plans. You can continue the same coverage that you had under the Cobra system but that can get pretty costly and dip into your finite retirement savings pretty significantly. Medicare can be helpful too. But to be perfectly comfortable that you have coverage, look to Medicare supplement insurance so you maintain the same quality of care in retirement that you have now in the working world.

Don’t just limit your retirement planning to your money. Your retirement will be a time of a big change of lifestyle and a change to your values and how you spend your time as well. You will have more time on your hands and studies show that those who enter retirement without “an agenda” can become adrift in all that time and that isn’t healthy. Human beings are doers so even though you may no longer be working for a living, find ways to be productive and make a difference in your community. You can start finding those opportunities long before retirement so when you finally step out of the work world, expanding those hobbies and volunteer efforts is as natural as can be.

In addition to the change of where you spend your time each day, you may have even a bigger change in where you live ahead for you in retirement. Many times people who step into their retirement years find that maintaining the house where you raised the kids is just not necessary and more work than it worth. Selling the home and using the equity to finance a leisurely retirement life is a great way to go. But you should start early both preparing the home for sale and preparing the family that “grandma and grandpa’s house” is going away.

In addition, where you go to live is something that can be great fun to dream about and doing some research on just the right place. You may choose to rent a small place in an older part of town and enjoy a whole new lifestyle in that setting. Or you might go for a high-rise condo with a view of the river or a nice quiet apartment in a retirement oriented apartment complex where you and other retirees can explore this new world together.

Above all it’s important to embrace the retired lifestyle with the enthusiasm and excitement that you might greet any new opportunity. Don’t let being retired mean just not working. In fact, go through the mental and emotional exercises of putting the working world behind you and redefining yourself in this new role. You are retired now and you are a senior citizen and maybe even a grandparent.

These are not negative things. There is a strong role for grandma and grandpa in society and in your family. And the world takes great joy in a senior citizen who embraces that time of their life and sets out to be the best senior citizen they can be. If you predetermine that this is the kind of retired person you are going to be, that attitude will propel you past that sudden change of life shock and get your retired life off in running in an exciting way that will lead to many happy and fun times in your life of leisure as a retired person.

On How to NOT Screw Up Your Retirement Planning

Planning for retirement is something grown ups do. So as soon as you can when you settle into your adult life, if you can get your retirement planning moving, you will benefit from the wisdom of moving on this early in life when its time for you to retire. Too often young people live in a fantasy world that they will never grow old. But short of the worst case scenario of an early demise, everyone is going to get old and its far better to do so with a plan then to “let it sneak up on you.”

This is something you don’t want to screw up. Is it possible to screw up retirement planning? Of course it is. If you speak to senior citizens who did not start planning in advance and got to their senior years with nothing to fall back on and no funds to use so they can step out of the working world and enjoy a more leisurely retirement lifestyle, that is an example of people who screwed up their retirement planning. So it’s good to know the common mistakes people make so you can avoid them.

Probably the biggest mistake that you can make in your retirement planning is to wait to start it until you are pretty close to retirement. If you want to retire at 60 and you don’t start getting ready until you are 55, you will not have nearly as well prepared a retirement package as if you had started when you was 25 or 35. By starting early, you can set back a small amount each month and put it into an IRA, your employer’s 401k or some other retirement vehicle. Then just let that money continue to accumulate and grow and before you know it you are sitting on top of a pretty substantial nest egg.

Speaking of sitting on top of a nest egg, the second big mistake people make is not leaving that nest egg alone. When that retirement investment fund starts to get big, it is really easy to look at it as a way to get you out of credit card debt trouble or to borrow against for some new plan or possession you want. Above all, resist this temptation. If you lose that retirement fund due to foolish use of the funds in your middle age years, you are back to square one with nothing to show for your years of hard work developing that retirement nest egg.

The plan of setting up withholding from your checkbook or a direct deposit to your retirement account of retirement savings allows you to go about your busy life knowing that your retirement planning is underway. This is step one but its not a good idea to never go back and review your retirement plan and see if how you are going about getting ready for retirement well in advance. Make it a regular ritual to sit down and review what is going on with your investment funds. Look at the way your investments have been performing and if you are not getting a good return on those money, make some changes. Remember, just because your retirement funds are being managed by the company you work for doesn’t mean the money belongs to them. It’s yours so be responsible and manage it.

Starting early and staying proactive about your retirement is your best approach to retirement planning and one that will result in a much bigger retirement fund for you to start your golden years with. And by taking good care of your retirement before you need it, you are guaranteeing that it will take good care of you when its time to depend on that fund for a happy and prosperous retirement lifestyle.