For many Baby Boomer women, financial literacy is as foreign as a complicated new language. According to data collected from the Pew Research Center, 41 percent of Baby Boomer women spent their youth raising children while their husbands worked outside of the home, so it might be safe to assume that most of them were not thinking about retirement advice and recommendations. But between the higher life expectancy for women and the recent rise in the divorce rate for people over the age of 50, women are now starting to think about estate planning. Even if they don’t want to.
Sometimes emergency situations, like a sudden diagnosis, death or divorce push you into having to deal with estate planning. But the chaos that ensues in those situations--where you are struggling to play catch up--are not only overwhelming, but also avoidable. In a New York Times article titled “Helping Women Over 50 Face Their Financial Fears,” Diane Terman Felenstein, who runs a Public Relations company summed it up perfectly:
“Twenty years ago, our children were just getting married, we did not have grandchildren or they were just being born, we did not have mates who were ill. You didn’t think you’d die. But I’ve lost friends, they’ve lost husbands, there have been unexpected illnesses and medical bills. We’ve had divorces and remarriages and stepchildren. We saw people lose their money in 2008. These are issues that were never in anybody’s brain.”
If you are guilty of not being having these issues at the forefront of your mind, here are some great pieces of elder care financial planning and retirement advice that can help you and your loved ones better navigate difficult situations:
Update And Review Your Will (And Your Partner’s Will)
It’s important to review your will with your spouse or partner--and vice versa--so that you both have a clear understanding of what needs to happen should one of you die. The New York Times article tells Ronni Ginnot’s story, whose husband passed away suddenly from a heart attack at the age of 58. Ms. Ginnot told the Times that she knew nothing about her husband’s business, which was left to her in his will.
“I should have known what the will said, but I didn’t think it applied to me. It was my fault. I was ignorant.”
A 2015 survey on estate planning by Harris Poll found that 64 percent of Americans do not have a will, many claiming that they just haven’t gotten around to it. While thinking about death is not a pleasant experience, it is a reality of life and it’s essential that you be prepared. A will allows you to declare your intentions about what you want to do with your personal property upon your death. Your assets can be assigned to various beneficiaries, such as children, grandchildren, or even charitable organizations.
Update and Review Advanced Medical Directives
Many people don’t consider living wills and advanced medical directives when they are talking about elder care financial planning, but it’s an essential part of preparing for the future. In the case of experiencing various health emergencies, having advanced medical directives prepared can help relieve family members of the pressure to make important medical decisions on your behalf. It can also significantly reduce chaos and confusion in an already hectic situation.
Because medical advancements have been driven by technology, certain medical procedures can also end up being a huge drain on your finances. A living will and advanced medical directives can help doctors better care for you while also cutting down on costly and unnecessary treatments. For example, some people include that they do not want to be put on life support or have a Do Not Resuscitate (DNR) request.
Think About The Estate Tax Implications
Something that might come up during conversations about retirement advice, is the estate tax. The federal government does not consider assets under $5.45 million for the estate tax, which means that the majority of Americans do not have to worry about it. There are some types of property, however, that people forget to take into account when it comes to qualifying for the estate tax. For example, life insurance policies, retirement plans and pensions can all count as taxable assets if they exceed $5.45 million.
As part of your estate planning process, you can choose to gift or donate some of your money to help you avoid a hefty estate tax. Gifts up to $13,000 are excluded from the estate tax, so if you think your beneficiaries might be hit hard by taxes upon your death, you can gift some of your money away prior in order to avoid a big federal tax.
Bring In Some Extra Help
There’s no need to try and go it alone when it comes to elder care financial planning. There are special lawyers and estate planners that can help provide you with retirement advice and estate planning tips. From do-it-yourself help from LegalZoom, to hands-on planners to walk you through the process, like the financial experts at Fidelity or Morgan Stanley. The important thing is to get the ball rolling, as you can not really afford to keep putting this off.