What do you think of when you think of retirement? Do you image yourself sitting on a beach somewhere, listening to the tide roll in? Do you image taking the simpler route and retreating to a quaint country town where the birds and crickets sing all the time? Or do you dream of traveling the the world, taking in all the sights to be seen? While you quietly embrace your idea of the perfect retirement, ask yourself…..Does my spouse want the same thing?
One big mistake people make in retirement is the lack of communication. Couples may not realize that each other’s idea of the perfect retirement may be really quite different. Perhaps one wants to sit back and relax, while the other wants to use his/her time to pursue a new hobby or open a new business, which can eat away at those savings you have so carefully provided for. Whatever the case may be, you should sit down with your spouse now and discuss what the two of you want later to ensure that you are on the same page. Realizing you want two totally different things can take a toll on your emotional well-being and retirement bliss.
Another very important topic to be brought up in the discussion of what you want, is how much you really have. Our office experiences this scenario more often than you would think: one spouse handles all of the finances and the other has no clue about what they have, where it’s at, or how it’s titled. When something happens to the financially savvy spouse, the other is left in the dark with nothing but a stressful mess on their hands and no idea of how to sort it out. Both spouses need to be fully aware of the financial situation and needs of the household. Those couples who are in second marriages with blended families have even more issues. Debt issues and finances can become intertwined with former spouses’ and creditors are not always bound by divorce settlements. Inheritances can be passed down in a way you and your current spouse had not intended.
Another surprise that comes to most is just because you are married doesn’t mean you have the ability to act for your spouse should he/she become incapacitated. If you don’t have Powers of Attorney designating your spouse to act on your behalf, you could be looking at a drawn out and very costly guardianship proceeding. Accounts and assets can be frozen and you will be left feeling helpless. With proper estate planning, these types of issues can be avoided, but don’t wait until it’s too late. Once a person becomes legally incapacitated, their right to make their own decisions is stripped from them and handed over to the court, not you.
People also assume that what they need now, is what they will need during retirement, which in reality may not be the case. Never underestimate the rising cost of health care and don’t assume that because you have Medicare you will be ok. People are shocked to find out what Medicare won’t pay for. You should know that the average, out-of-pocket, healthcare cost for couples over the age of 65 these days is knocking at around $250,000. This does not include long term healthcare. Considering a supplement or a long term healthcare insurance on top of Medicare may be in your best interest but it is important to look into this now because once the need for care arises, it is much harder to gain coverage. Other emergencies, like home repair, accidents, and natural disasters are also very often overlooked when it comes to planning your retirement. Depending on where you decide to build your retirement nest, financial planners advise that you set aside at least three months’ worth of expenses just to be on the safe side.
Communication, coupled with proper estate and financial planning is a must when it comes to getting the most out of your retirement. However, even if you do feel that your plan is solid, it is always a good idea to review your plan every couple of years to make sure that it is still appropriate for your family’s needs. Major life changes and changes in the tax and financial laws can have dramatic affects on your estate plan without you realizing it. If you would like discuss your plans with a qualified estate planning attorney, or have us review your current estate plan to make sure it will still work for you and your family, call or stop by our office to schedule an appointment. One of our friendly staff members will be more than happy to assist you.