Whether you are nearing retirement age, already retired, or planning for your future, there’s a lot that goes into a successful retirement. Being prepared ensures that you and your loved ones are protected.
To help you plan for a better retirement, there are 10 major steps you can take:
- Gather your team
Planning for retirement is complex, and it’s important to assemble a team of professionals to address all its aspects. Your team should include an elder law attorney, an accountant, a financial advisor, and if needed, a geriatric care manager.
- Create a Power of Attorney
A power of attorney is probably one of the most important documents you will ever sign. It allows another person (an “agent”) to act on your behalf in important business, legal, and financial decisions in case of incapacity. This document must be done while you still have the capacity, so don’t put it off. And of course, only designate someone you absolutely trust.
- Create a Health Care Proxy
A health care proxy appoints someone you trust to make medical decisions for you in the event that you cannot make them yourself and to advocate for you with physicians, hospitals, and other health care providers.
- Create a Living Will
A living will states your end-of-life decisions. It guides your health care agent regarding the type of care you’d want or not want to receive in different scenarios, like artificial respirations, hydration and nutrition means.
- Execute a Last Will and Testament
Your Will details where your assets go when you pass away. It should be tailored to your individual wants and needs, and it’s important to have it properly drafted and executed so that it meets the statutory requirements and is valid.
- Create Trusts
There are many different types of Trusts, and they can be created for specific purposes or with certain provisions. A common Trust for Medicaid planning is an Irrevocable Income-Only Trust, designed to your protect assets and to help you qualify for Medicaid and other benefits.
Another important type is a Supplemental Needs Trust, which allows you to leave assets to beneficiaries with special needs who receive public benefits such as Medicaid and SSI without disrupting their benefits.
- Plan Your Business Exist/Succession
These may be difficult conversations to have, but it’s important to discuss your retirement with business partners, especially if they’re family, to make certain that everyone’s rights and obligations are clearly defined. Your team can help you make a plan that ensures a smooth transition.
- Plan Your Long-Term Care
If you don’t properly plan for long-term care, you may face financial catastrophe. Many people believe that having Medicare is enough, but Medicare is health insurance—it does not pay for long term care. For example, it will only cover up to 100 calendar days of a rehab facility or nursing home stay.
To be prepared, the first option is to purchase a long-term care policy. These are typically very expensive, and existing health conditions may prevent you from qualifying.
The second option is paying privately out of pocket for long-term care, though this can be very expensive as well.
The third option is Medicaid. It’s not easy to qualify for, but an elder law attorney can help you qualify. Note that for nursing home care there’s a five-year lookback, meaning that Medicaid reviews things like money transferred during that time, so it’s important to plan ahead.
- Create an Estate Tax Plan
Currently, in New York State, if you have more than $6,110,000 in your name, your estate is taxable. This includes ALL your assets, even life insurance. Your team will help you avoid or minimize any estate tax you and your heirs might have.
- Review Your Estate Plan Every Few Years
Taking all the necessary steps to prepare for retirement is crucial, but it’s also important to review your plan periodically to make sure it still meets your needs. As your family, financial situation, and goals change, so should your plan. You can change it as many times as you’d like, as long as you have capacity.
The object of retirement is to live well in the next phase of life. Proper planning will help ensure that all your goals are met and that unforeseen circumstances can be met without unnecessary expense or unintended outcomes. Take these 10 steps, so you can enjoy your retirement protected and with peace of mind.
Lauren Block is an associate in Vishnick McGovern Milizio LLP’s Wills, Trusts, and Estates Practice. Her work focuses on Trust and Estate Planning, Trust and Estate Administration, and Elder Law. She can be reached at [email protected] and 516.437.4385 x145.
