The financial decisions you have to make and financial opportunities and challenges you face evolve constantly as you go through various ages and stages of life.
We interviewed Brad Decker from PSECU Financial Services® (PFS), available through CUSO Financial Services, L.P.* about financial items individuals should consider as they approach their senior years.
Should I Give Anyone Else Access to My Financial Information?
As you start to plan for your senior years, you may wonder if there’s any value in sharing your financial information with anyone. You may have children or other family members that want to help you as you age, and they would need access to your accounts to do so.
According to Decker, once they reach a certain age, many people find it helpful to designate an authorized person who can talk to financial advisors about their financial accounts. This person doesn’t have to be granted decision-making abilities to be helpful. This designation can be set up in a way that allows the financial advisor to talk to them about your accounts and answer any questions they may have as they help you navigate decisions.
Even though this person isn’t necessarily going to be granted decision-making abilities, you’ll want to make sure you choose someone that you truly trust, as they will gain information about the accounts. “Oftentimes it’s the oldest or geographically closest child,” Decker says, though there are no set requirements.
If you choose to designate an Authorized Person, you’ll want to include reviewing the access or authorizations they have as part of your regular reviews of your financial accounts and make sure they, as well as any beneficiaries on the accounts, are up to date.
How Will I Afford Healthcare Once I’m No Longer Working?
Once you reach age 65, you’ll be eligible for Medicare. You may need help shopping around for different plans, as there are many out there. It’s important that you consult with a professional to make sure you choose the best one for you. Decker notes that while PFS, available through CFS, doesn’t offer this service directly, they can provide referrals to knowledgeable professionals that can help navigate this decision.
It’s also important to understand that, “Medicare often doesn’t cover long-term care stays,” according to Decker. There are many options to consider, including:
- Long-term care insurance
- Traditional long-term care coverage
- Hybrid life insurance and long-term care insurance
All of these can help with the cost of a long-term care stay and many offer in-home care options, as well, since that is often the first step in needing additional care.
“For many people, 55-65 is the ideal age to opt-in to long-term care coverage,” Decker says. “At this age many individuals may be experiencing some health issues, but often not something that’s going to preclude you from getting approved for this coverage.”
You’ll want to meet with a trusted advisor to help guide you in these choices, as what’s best for you will depend on your personal circumstances.
How Can I Maximize my Social Security Benefits?
“There are many different facets to consider when discussing Social Security,” Decker says. For instance, he outlines the following:
- For each year that you collect Social Security before your designated full retirement age, you are taking a reduction in what you receive. Your full retirement age for Social Security is based on your year of birth.
- For each year that you defer taking Social Security after your full retirement age, the annual amount you’ll receive increases by eight percent until you reach age 70.
- Once you hit age 70, the amount you’ll receive from Social Security does not increase outside of any cost of living Increases awarded by SSA if you defer receiving the benefit.
To get an estimate of what your Social Security payments will be, you can use the Retirement Estimator available on the Social Security website. Additionally, Decker says you should be regularly checking your Social Security account, which you can also do online using the my Social Security account tool to make sure there are no mistakes on income and earnings that have been reported.
There are some situations that may require additional consideration, such as:
- Being self-employed
- Being divorced after being married for at least 10 years (without remarrying)
- Being widowed
In these cases, especially, it can be beneficial to meet with a knowledgeable financial advisor to understand your options.
How Do I Handle Estate Planning?**
Having open, honest communications with your loved ones about your wishes is important so that everyone is on the same page when the inevitable occurs. Make sure you have the appropriate paperwork in place, Decker says, such as a will, living will, and power of attorney.
Decker recommends seeking out professional help with these documents. “There are people who want to do this themselves, and you can, but it’s good to ask a professional that specializes in estate planning,” Decker adds. “And it’s common to be able to have them done as a package.”
In addition to these common documents, you may want to talk to a professional about drafting up additional items for specific circumstances, such as:
- Making plans for a child with special needs
- Managing, transferring, or closing out any businesses you own
- Setting up a trust if you want your beneficiaries to use the funds for specific purposes
Working with a reliable attorney, financial advisor, and/or Certified Public Accountant can help you get everything set up properly. Once your paperwork is in place, you’ll want to conduct annual reviews to make sure it reflects any changes in your wishes, Decker says.
Keep Yourself and Your Finances Safe
As you approach your senior years, you may unfortunately find yourself the target of additional scams or elder abuse. Fraudsters have tapped into the uncertainty many seniors face as they navigate the complicated decisions discussed above. This is one reason it can be beneficial to set up an Authorized Person for your accounts, Decker says, so the professionals you work with know who they’re authorized to converse with. And this is also why working with professionals is important, as well, to ensure that you’re being directed to reliable sources and websites for any of your planning needs.
To help connect with knowledgeable advisors, PSECU members have access to financial planning services through PSECU Financial Services® (PFS), available through CUSO Financial Services, L.P. Learn more by visiting psecu.com/investing.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. PSECU has contracted with CFS to make non-deposit investment products and services available to credit union members.
Financial Advisors are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with, residents of other states will be made only upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell or a solicitation of an offer to purchase brokerage services to persons outside the United States.
**CUSO Financial Services, L.P. (CFS) does not provide legal or tax advice. For such guidance, please consult with your tax and/or legal advisor.