As you age, you will want to make sure your finances are in order, and you can take care of you and your family after you are gone. Estate planning for the future needs to start when you are young with the help of a professional financial planner. There are several financial things seniors should plan for in the final years.
1. Get Out of Debt
One of the most important things you can do to protect your family in your later years is reducing debt. Paying off as many bills as possible becomes even more critical at this juncture in life. Ideally, you have been paying off all your credit cards on time throughout, but if you do have large amounts of debt, this is the time to take care of that.
2. Have an Emergency Fund
Everyone should have an emergency fund, but as a senior, it is even more consequential to put it into action. If you have a good financial planner, he or she likely recommended you start putting money aside for emergencies a long time ago. We never know what is around the corner and as we age, health can become a problem that can drain our bank account if we are not prepared.
3. Update Your Will
Having a will is one of the best things you can do to protect your family when you are gone. Not only it will avoid any family disputes once the time comes to distribute your personal property, but it will make the process go smoothly. The will needs to include the necessary documents for estate planning, which contain, a power of attorney that designates a specific family member to act on your behalf in financial matters, a health directive with precise instructions regarding your wishes for medical treatment, and a declaration of incapacity if you become unable to make your own decisions.
4. Review Your Insurance
The law in many states requires you to have car insurance. If you have a good driving history, one of the financial things you should do to plan for in the final years is to set the coverage to the lowest level possible to save some money. You may be able to switch from a whole life insurance policy to a funeral policy which is much more affordable. A health insurance policy with a high deductible can also help you manage any problems you may experience as you age. You can offset any unexpected expensed with that well-stocked emergency fund.
5. Discuss Your Wishes with Your Children
If you have a will, all your wishes for what happens after your death is in that document. However, it is a good idea to discuss your decisions with your children and loved ones who will receive the benefits of your hard work beforehand. The will executor needs to be aware of bank accounts, investments, and life insurance. It is a good idea to discuss how you want to distribute your property and why, so there is no resentment or arguments after your passing. Doing this will not only bring you peace of mind, but it will allow your kids to prepare and ask questions, instead of wondering why you decided the way you did.
6. Produce Additional Income
Whether you start your own business on the side or buy real estate as an investment, creating one or more additional income streams is one of the smartest financial things seniors should plan for in the final years. If you have been listening to good advice from your financial planner, this was on your list years ago. Many people worry they won’t have enough money to retire and maintain the same lifestyle they had while working. That doesn’t have to be your dilemma if you have multiple income streams.
7. Live a Healthy Life
Even though death is inevitable, one of the most important things you can do to make your burdens easier is leading a healthy life. Taking care of yourself by exercising, managing stress and enjoying life will go a long way in reducing your medical costs as you age. There is always uncertainty when it comes to health, but there are things you can control, such as substance abuse or other unhealthy habits. Doing this can also save you money in the long run.
There are many things you can do to make things easier for you and your family after you are no longer there. Planning for the future is something that many people fail to do. Doing so not only lessens the stress that comes with the unknown, but it helps your family to grieve you and not worry about how they will have to deal with your financial and personal issues.