6 financial planning tips for older adults and their families

By Jason R. Friday, CFP®, MPAS®, RICP®, CMFC, Head of Financial Planning | Citizens Wealth Management

^{As Head of Financial Planning, Jason is a strategic partner who is responsible for developing the strategy, managing the planner teams, and coordinating personal financial planning activities across Citizens Wealth Management to help clients navigate and grow in changing circumstances.}

If you're looking for a way to bring yourself and your family a sense of comfort as the years pass, look no further than your financial plan. The right plan can help you and those you love walk side-by-side through life with a shared vision of your wishes and what to expect on the road ahead.

The following six tips can help you start a conversation with your financial planner and cover everything from estate planning, to considering health care needs, to advice for getting those you love involved in the process.

1. Plan ahead to avoid uncertainty

A lack of preparation is one of the most significant challenges aging adults face, especially as age-related life changes come calling.

Consider what would happen if you were suddenly unable to make your own financial or medical decisions. Would someone you trust be at the ready and know your wishes? Planning ahead can help avoid uncertainty and provide those you love with a roadmap that ensures a shared sense of care, continuity and dignity.

That's why the ideal financial plan isn't just about savings and investments. It's also about putting strategies in place that protect yourself and your loved ones no matter what lies ahead.

2. Create an estate plan to protect yourself and your assets

Regardless of the size or shape of your wealth, you deserve to be able to make decisions about how to handle your future care and medical needs, your finances and your assets. That's the power of an estate plan.

Working with your financial advisor and a trust and estate lawyer, an estate plan can be as nuanced or straightforward as you require. For those who only need the basics, an estate plan should include the minimum four documents:

• Will: Outlines how your assets should be distributed after death.
• Durable power of attorney: Grants someone the authority to make financial and legal decisions on your behalf if you become incapacitated.
• Health care proxy: Designates someone to make medical decisions for you if you are unable to do so yourself.
• Advance medical directives (also known as a living will): Provides instructions about your preferences for medical care if you aren't able to communicate your own wishes.

Those with more complex assets and inheritance wishes may consider using a revocable trust in combination with a will. No matter what you choose, these documents help ensure that someone you trust can step in and make decisions according to your wishes.

As you craft these documents, you'll want to consider who you choose to accept these responsibilities. While it's important to consider someone willing, it's equally important to choose someone who can handle the emotional needs and time commitments that come with being named as your executor, trustee or proxy.

3. Involve loved ones in financial planning decisions

As you make plans, name trusted individuals, and secure your loved ones' futures, you may find it beneficial to involve them in the process. In fact, it's essential to include anyone who plays a role in future decisions.

Discussions don't have to be down to the tiniest detail, but they should include enough information so everyone understands their role and responsibility. Your loved ones may also appreciate the opportunity to ask questions in case they're unclear on certain details.

The bottom line? Informing your family of everything from how to access your accounts to the details of inheritances is a comfort. It creates stronger support systems, less second-guessing and a greater sense of security for everyone involved.

As a neutral third party, your financial advisor can help to facilitate these conversations. Instead of putting you in the spotlight, your advisor can lead the discussion and start building a relationship with those you love. From there, they can act as a point of contact so that someone you trust is answering questions during life's crucial moments.

4. Plan for future health and medical care needs

While much of your planning may seem to revolve around finances, it's also important to consider your future health and medical care needs.

Adult children — especially those in their 50s, sometimes called the "sandwich generation" — are often caught between their children's needs and those of aging parents. However, without a plan, they may not have considered the possibility of having to care for their parents until the need arises. It's critical to think ahead and plan for different scenarios that could have an economic, personal and emotional impact on their lives.

If exploring care facilities, it's important to find ones that can accommodate required care services — now and in the future. For example, continuing care retirement communities (CCRCs) allow for progression through different levels of care. They typically include arrangements that span independent living to skilled nursing and memory care options. This allows residents to stay in the same community and maintain social connections even as their health needs evolve.

To find the solution that makes the most sense for your situation, involving family could help. Taking the reins and leading the conversation could bring your family much-needed protection and a sense of comfort. Early planning makes for less stressful days down the line.

5. Understand life insurance and long-term-care coverage

Another key aspect of planning is understanding life insurance and long-term care insurance options. Life insurance can be a tax-efficient way to transfer money to the next generation and can be used to set up charitable gifts. Life insurance can also help you ensure that those you love have the financial means to pay down debts or cover life's expenses during bereavement.

Long-term care is an often overlooked yet key part of financial planning which can help cover the cost of assisted living facilities and nursing homes. These costs can be significant: The average private room in a nursing home exceeds over $100,000 a year in many states.¹ A long-term care policy can help prepare for these costs in advance and protect your family from having to make emotional decisions about facilities and the level of care they can afford to provide.

6. Keep planning documents up-to-date and organized

Once you've made a plan, it's time to put it in writing and keep those documents up-to-date, safe and organized.

Be sure to revisit your estate planning documents anytime there's a major life change, including marriage, divorce, a change of address or the birth of a new grandchild. There could be changes to laws or tax regulations that impact your estate plan too, which make regular reviews essential even if nothing changes personally.

Whether it's a special folder in your filing cabinet or a digital file storage service, make sure that those in the know are aware of two things: where your estate documents are and how to access them.

You should also consider giving those named as your executor, trustee or proxy a copy of essential documents they can readily access should they need to exercise their assigned duties.

Plan ahead with professional guidance

Creating a plan for later in life is an important step in taking control of your future and a gift to those you love. Instead of uncertainty, proactive conversations and planning can secure your legacy, protect your assets and foster a shared sense of love and understanding.

A Citizens Wealth Advisor* can help guide those discussions and ensure everyone feels seen, heard, valued and respected along the way. Whether you're revising an existing long-term plan or need to draft a new one, get the guidance you need to move forward with confidence.

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