Many people build their retirement and estate plans around their children and grandchildren. Everything from where they live, to how they spend their time and money, to the legacy they want to leave behind is considered through the prism of their role as parents and grandparents. For those without kids and grandkids, a different formula may apply as these individuals may have more financial freedom and flexibility as they enter retirement and beyond. But they still need to be as vigilant — if not more — about planning for their later years.
Prioritize saving for retirement
Since you’re not facing the costs for childcare and educational institutions, consider doubling-down on saving for retirement. Calculate what it will take for you to live the lifestyle you want in retirement and compare it to your current savings. Contribute as much as you can to your workplace savings plan and consider building up Roth IRA savings to help create a source of income that is potentially tax-free in retirement.
Recognize your long-term care challenges
Long-term care can be a challenge for anyone as they age, and there’s added complexity in situations where you may not be able to rely on family members to step in. Medical expenses continue to rise, so it’s important to have adequate savings and insurance coverage. Make it a priority to explore your options through Medicare and your current or former employer and consider if long-term care insurance would benefit you. Also research caregiving options and long-term care facilities in your area so you are familiar with the choices if you need them down the road.
Prepare for medical care
A significant medical event can happen at any time, so make sure to have an advanced directive, also known as a living will, in place. This document lets your spouse, extended family and friends know your preferences for treatment and gives you the opportunity to designate a healthcare power of attorney, who will be empowered
to make decisions on your behalf if necessary. Have your financial decision-makers in place It’s also important to designate a spouse, friend, extended family member or professional to look out for your financial interests if you become incapacitated. Draw up documents to name a durable power of attorney to oversee your financial matters if you are unable to, including legal and tax matters. You do not have to share your full financial situation and account numbers; a common approach is to share enough information so that the contact can step in, if and where you need help making financial decisions.
Plan your legacy
With no direct heirs in line to inherit your estate, you will want to consider what you’d like your legacy to be. You may choose to leave your estate to any combination of family members, friends, charities, education institutions, or other causes that are important to you. Creating or updating your will is one of the best ways to articulate your wishes.
Also consider using trusts, which sometimes allow more flexibility than a will, to help you meet specific legacy goals. Consult with a financial advisor, attorney and tax legal professional to develop a comprehensive legacy strategy that suits your ultimate goals.
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner, with Ameriprise Financial Services, LLC in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 39 years. Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
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