Retirement is often referred to as the golden years. Those years or decades after people end their full-time careers are when they can explore passion projects, travel, spend extra time with loved ones and do other fulfilling activities. However, their enjoyment of those years depends in no small part on the planning that they engage in prior to retirement.
Most professionals save for decades to ensure their comfort during their golden years. Simply saving money is far from the only advance planning required to ensure a comfortable retirement. People typically also need to think about their long-term needs well before they arise.
The years or months immediately before someone’s retirement are among the best times to revisit an estate plan. Those who don’t yet have an estate plan in place may want to create a plan as part of their preparation for retirement.
What issues should be addressed before retirement?
There are several important concerns that people can prepare for with estate planning documents. They can engage in asset protection planning to preserve their resources by protecting them from creditor claims while they live on a fixed income.
Asset protection planning often overlaps with long-term care planning or Medicaid planning. People can change how they hold certain resources to improve their chances of qualifying for Medicaid coverage if they need high levels of support during their golden years. The same steps that they take to ensure their comfort later in life can help preserve their legacy for their loved ones after they die.
Additionally, many people need to think about the possibility of incapacity and medical decline. They may want to create documents empowering someone they trust to handle their affairs. Durable powers of attorney are often the only thing standing between a vulnerable older adult and an involuntary guardianship.
Both family members and professionals can seek guardianship over those who have cognitive challenges or health issues later in life. Someone who drafts durable powers of attorney can effectively name a person of their choosing to handle their finances and medical needs. They may also want to add an advanced directive to their estate planning documents as a way of guiding the person who makes their medical choices.
Finally, those who created estate planning paperwork years ago may find that their assets or their beneficiaries have changed. It may be necessary to update a will or possibly even create a trust to ensure the proper distribution of resources after their death.
Revisiting an estate plan is an important part of the retirement preparation process. Older adults who address their legacies ahead of time can feel more confident about their circumstances as they transition away from full-time work.