Planning for Retirement, It’s Not Just a Financial Issue

planning for retirement

When you think about planning for retirement,  like most people, IRA’s, 401k’s, Social Security or for that matter Financial Planning come to mind. Will I have enough resources to retire?

However, retirement planning encompasses more than just financial matters. Retirement planning should also focus on how you can provide for your well-being as you age. Think estate planning as well as planning for mental or physical incapacity whether temporary or permanent. There are certain documents that you should have to assure peace of mind during retirement.

Let’s look at these important documents

Power of Attorney (POA)
A POA gives another person (an “attorney-in-fact,” or agent) the right to make financial or legal decisions for another (you the “principal” or holder of the POA). There are significant differences in POAs. A durable POA gives authority to the attorney-in-fact both currently and beyond the period of a principal’s mental incapacity. A nondurable POA ends at that incapacity. If you currently have a POA be sure it is a durable power of attorney otherwise at your incapacity it ceases to be a viable document. If it is not durable you may be faced with a guardianship when it is most needed. Guardians and conservators are appointed by courts when a person of any age is unable to take care of himself or herself, and no POA is in effect. There also is a springing POA that permits the principal to act on his or her own behalf until some specified event occurs, such as entry into a long-term care facility. Remember the individual that you name as your “attorney-in-fact” has the authority to do as he or she deems necessary to provide for your wellbeing. That’s quite a burden to place on someone who may not be as astute as you in financial matters.

Stand-By Trust
A Trust is an agreement between you (Grantor) the owner of your assets and a Trustee, the individual or entity entrusted with the management of the assets and charged with following the terms of the Trust Agreement. The trustee has the duty to provide income and or principal to the named Beneficiary who can be the Grantor or others as provided in the Agreement. The Trust can be funded currently or can be a Stand-By Trust. A stand-by trust is basically the same agreement except you don’t fund the trust today. The trust is in a stand-by mode until a certain event occurs such as your mental or physical incapacity. The stand-by trust goes hand in hand with a POA. However, this POA directs your attorney–in-fact to place your assets in your trust should you become incapacitated. Unlike your POA that gives your attorney-in-fact no direction as to how your assets are managed, the Stand-By Trust outlines how you want your assets managed during your incapacity and how you want the assets distributed upon death. With the Stand-By Trust you are still in control through the terms of the agreement even though you may be incapacitated.

Health Care Proxy
A durable power of attorney for health care (DPAHC) is sometimes referred to as a health care proxy. It is an agreement where you designate an agent to make health care decisions should you be unable to do so. The individual you choose as agent generally has the same rights to request or refuse treatment on your behalf as if you were capable of making and communicating your own decisions.
When thinking about Retirement Planning you should seek out the services of an attorney that specializes in Elder Law to discuss these very important documents.

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About Ira Brower

I have been in the financial service industry for more than 40 years primarily providing wealth management solutions for retired and soon-to-be retired individuals. I am President and Founder of Garden State Trust Company. Our clients depend on us for elder care solutions, such as; trust and estate planning, investment services, and lifestyle management. We also administer to “special needs” or “supplemental needs” trusts.

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