“Do not regret growing older. It is a privilege denied to many.” – Anonymous
Aging is an act that many individuals want to make gracefully. However, it is important to know that risks exist throughout all life stages. Today, let’s focus on risks in the retirement years.
Statistically speaking, as we age, we lose cognitive abilities. Now is the best time to plan with your loved ones in mind; to protect wants, wishes, and desires for when they may lose a step or two.
Baby boomers are ranging from ages 57-75 in 2021. According to The Alzheimer’s Association, 11% of those age 65+ have Alzheimer’s. Nearly 14% of those ages 75-84, and 35% of those ages 85+ have Alzheimer’s.
Baby boomers, ages 57-75, hold half of the $50 trillion dollars in US household wealth. Time has been spent building that wealth and for what? Is it for charities, scholarships, or is it be left to care for and support family members?
Throughout life we develop our own unique way of caring for ourselves, paying bills, managing finances, maintaining our home, caring for loved ones, and maintaining our physical and mental health. Those who take a solo approach to managing life’s finances may run more of a risk than those who go about it with a team. Those who have a trusted team in place ensure their financial wellness will stay on track.
What can we do?
-Have a financial “trusted contact”
-Monitor monthly transactions in case of fraud
-Place fraud alerts on your accounts
-Have a financial power of attorney created
-Establish legacy continuation documents: trusts, wills, etc. that will protect your financial well being
-Create beneficiaries, set up joint or POD accounts, and review existing ones created years ago
-Communicate your wants, wishes, and desires to loved ones
-Have a family purpose/passion, and a vision for the future
-Have a team: your own bank of resources built to protect you and your financial well-being
Betty Lou has a trusted contact established on her portfolio. Betty is sharp as a tack and has always managed her own finances. In 2020 her advisor noticed, due to his long history with Betty, that her spending did not fit her historical pattern of behavior. The charities she supported changed. Her living expenses rocketed up, and she became a bit distant.
Her advisor called her trusted contact and together they met with Betty. They found that Betty had lost some control on her finances due to cognitive decline. A group of door-knockers visited unsuspecting Betty and kept asking her for donations to their XYZ causes. With the trusted contact in tow, her advisory team sat down with Betty and asked how this aligned with her goals. She explained that “they” had gotten to her.
The trusted contact now co-runs Betty’s finances to give her that extra set of eyes to make sure she stays on track.
Having a trusted contact does not mean that you lose control over your money. It simply means that you have a team around you that stands ready to assist you in your sound decision making, should it be needed. It is a form of protection. As we age, we can lose a step, and having a team focused on protecting you is how we get back ahead of the game.
Create your own team to protect you and your loved ones!
Written by: Justin Hamlin, CFP®
These are the opinions of Justin Hamlin and not necessarily those of Cambridge, are for information purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. The strategies discussed herein are not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. However, prior to opening an account, Cambridge will consult with you to determine if your financial objectives are appropriate for investing in the model. You are also provided the opportunity to place reasonable restrictions on the securities held in your account.