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This is the last part of a two-part series on Generational Planning and Families and Finances
A Family Affair: Retirees
If you are retired or approaching retirement, you face challenges unique in history. Among the risks is
longevity. Life expectancy at birth today is 77.6 years, or more than 20 years higher than a century ago, reports
the National Center for Health Statistics. While this is good news in many respects, it also means that you run
a real risk of outliving your retirement assets.
Besides, that does not tell the whole story. If you are married and age 65 or older, reports the Life
Insurance Marketing and Research Association, there is a high probability that either you or your spouse will live
into your nineties. In the past, most people did not spend decades in retirement. Today it’s highly likely
they will. Many will live past 100.
What you can do:
1. Plan. If you want to maximize the benefit of your assets for yourself and your family, don’t
leave the results to chance. Simply put, says Patrick Mastin,1 partner with Financial Network Investment
Corporation, “the law favors those who plan.”
Yet, for any number of reasons, some people simply refuse to plan. This is a problem that can impact several
generations. “One of my pet peeves,” Mastin told New York Life, “is people who wait until it’s too late to start
making plans. Suddenly, it becomes apparent that Mom or Dad will be going into a nursing home, so they start
scrambling to hide or distribute assets. They’re not planning; they’re panicking, and the results are more often
than not downright dismal.
“It is not uncommon for some couples simply to refuse to plan,” adds Mastin. “I know one older couple with a
sizable estate, mostly in farmland. He refused to draft a will or do any planning. His argument is that his
parents didn’t do it, so why should he? Why anyone would do that to their family is truly beyond me.”
2. Get help. “Our tax and inheritance laws are complex,” explains Mastin. “Many people do not
understand the ramifications of their decisions. They try to do too much on their own while ignoring all the
expert help around them, much of it available at no charge. As a result, many families lose large portions of
their assets that could be used for their benefit or passed on to their families.”
3. Do an estate inventory. Many people are surprised by how large their estates really are.
Review your estate and consider what you want to do with it both now and after you are gone.
4. Protect your retirement income. This should be the number one goal for retirees. Protecting
their assets assures that they maintain their dignity and independence in retirement. Just as important, it
assures that they do not become a financial burden on their children.
For millions of retirees, the answer of choice is an income annuity. They can be set up to provide lifelong income,
regardless of how long the annuitant lives. With New York Life’s Lifetime Income Annuity,2 for example, it is even possible to obtain Inflation Protection to protect the purchasing power of the annuity over time.3
5. Update your will. A will provides your instructions from beyond the grave. If you do not
have a will – or it is not current – talk to your attorney. Otherwise, the state in which you live
– not you, not a surviving spouse and not your children – decides what happens to your assets after
your death. Talk to a good estate planning attorney.
6. Consider trusts. There are many different types of trusts. Plus, they can be crafted to
reflect many very specific needs and goals. Among their potential benefits is that, if set up early enough,
trusts can shelter assets from nursing homes and creditors. Plus, they can help keep your estate out of probate,
passing it along to intended beneficiaries. This is where the experts come in. Talk to your New York Life agent
and your attorney.
7. Review your life insurance needs. Life insurance protects a surviving spouse and can provide
your children and grandchildren with an estate. Now is the time to review the status of your current life
insurance. Is it adequate? Are beneficiaries properly arranged? Should you add coverage and, if so, are you
insurable?
8. Decide if you want to help your family now. If so, how? Your options include lifetime gifts,
contributing to college tuition plans (including Coverdell Education Savings Accounts and Section 520 plans) and
more. Just be careful not to deplete your own assets while helping your family.
If possible, work together. However, life being less than ideal and some families being less than perfect, that
is not always possible. The key is to do what you can and to work together if possible.
1 Interview with Patrick Mastin, partner with Financial Network Investment
Corporation – February 2006
2 Issued by New York Life Insurance and Annuity Corporation, a wholly owned subsidiary of New York Life Insurance Company. In New York the issuer is New York Life Insurance Company
3 Option available only if you are age 59½ or older at the time of your first payment.
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