AgingOptions Life Plan: Finance

“Will I have enough assets in order to not run out of money before I run out of life?” is top of mind for all of us in the final third of our lives. In answering this, preservation, positioning and passing of accumulated wealth goes beyond traditional estate planning. It calls for all affected family members to be participants in a model that integrates health, housing and elder law considerations.

Study Shows Many Seniors Should Worry About Running Out of Money

The majority of older Americans worry about running out of money in retirement. Based on a study published a few months ago, these seniors and their families are right to be worried.

The study, conducted by the University of Michigan, analyzed data from some 1,200 people who died between 2010 and 2012. Among those 85 years old and older, 20 percent had no assets at the time of their death except their homes – and 12 percent died with no assets at all except Social Security and, in some cases, modest pension benefits. A further analysis showed that those who died younger were statistically even worse off, with about one-third dying without assets.

(Click here to read the brief article, which also contains links to the study and some related resources.)

The article at the website also refers to a powerful link between good health and financial strength – or, as it says, “between health and wealth.” It’s a fact that healthier people tend to be much better off financially – another reason to make good health choices starting as early in your life as you can. The investment you make in your health today pays lifelong dividends.

While the article’s conclusions about senior finances may seem bleak, if you’ve been listening to our philosophy here at Aging Options, you know that you do have many tools at your disposal to help ensure a sound, solvent retirement. The key is a strong Life Plan. A Life Plan will help you protect your assets as you age, a vital consideration for senior adults. Setting up a plan to guard your resources helps you live the kind of retired life you choose to live – not a life chosen for you by others.

We urge you to attend one of our Life Planning Seminars to find out more. These are scheduled at dates, times and locations throughout the area – simply click on the Upcoming Events tab to find the location nearest you. We also welcome the chance to meet with you in person. Planning for retirement today will help keep you from financial hardship tomorrow.

(Originally reported at

Saving Enough for Retirement? Probably Not!

If you’re like most Americans, you’re not saving enough for retirement – and once you stop working your lifestyle is going to face some big, often unanticipated adjustments!

A study from the Center for Retirement Research at Boston College reveals that fewer than half of U.S. households will be able to maintain their pre-retirement lifestyle after retirement. The biggest single problem is a simple one: people aren’t saving enough. As a result, many if not most retirees will face unpleasant surprises in the future. This failure to plan affects every aspect of a retiree’s life.

We’ve consulted with thousands of seniors, and virtually every single one wants to avoid becoming a burden to their loved ones as they age. To do this they hope to protect the assets they’ve managed to accumulate. But without a solid plan, when retirement resources prove inadequate, those closest to you will be making plans on your behalf. This will put great pressure on them and force you into lifestyle choices that don’t reflect your wishes.

You can read the Retirement Deficit article here, as reported at

So what do you do once you’ve decided it’s time to get serious about retirement planning? We recommend retirees attend one of our Life Planning Seminars taking place regularly at locations throughout the Puget Sound region. At these seminars you’ll gain vital information to help you create – or improve – a comprehensive plan for your retirement years. Click on the Upcoming Events tab on our website for a location near you.

(Originally reported at

The 4 steps you need to take if you inherit a brokerage account

Brokerage accounts allow an individual investor to deposit funds and place investment orders through a licensed brokerage firm. Through a brokerage account, you can buy or sell stocks, bonds, mutual funds, etc. Brokerage firms must abide by strict legal guidelines governing access to account information. The result is that sometimes heirs can’t even see account statements. It’s been enough of a problem that Financial Industry Regulatory Authority (FINRA) set up a toll-free number to help senior investors who have concerns or issues with brokerage accounts or investments. FINRA also provided tips for making the transfer process as smooth as possible. Here are some advance planning steps to take to make the transition to a beneficiary easier.

Communicate your intention to family members. Family members need to be aware of your brokerage account holdings and selected beneficiaries. Keep beneficiary information up to date and heirs should have an idea about investments in the brokerage account and why you selected those investments.

Beneficiary designations prevail over those in a Will. In a contest between a Will and a beneficiary designation, the designation always wins. If you cannot remember who you have designated, contact your brokerage firm and ask who has been recorded as a beneficiary for each account and make any changes to conform to your Will or estate plan. If you transfer your account to another firm, double-check that the beneficiary designations also transfer.

Provide a quick, easy way for heirs and beneficiaries to contact the brokerage firm. In order to distribute money from an account your brokerage firm will need your tax identification number, the account holder’s death certificate and proof or their own identity. Trade confirmations and account statement can help heirs quickly locate contact information.

Consider placing the brokerage account in a trust. Trusts eliminate the need for the heirs to go through the probate process and provide a quick doorway for trustees to get access to the accounts.

An elder law attorney can work with your brokerage firm to explain your options for transferring your brokerage account upon your death. Since this is an area governed by estate law, it’s important to remember that if you move or you have property in more than one state that your documents must be updated accordingly.

Here’s an article from the Wall Street Journal.

If you inherit a brokerage account, here are some steps you need to take.

  1. Gather documents. Documents may include trade confirmations, receipts or statements. The documents may be electronic so check the deceased’s online investing and banking sites.
  2. Create a list. You’ll need a list of investment accounts, account numbers and contact information.
  3. Contact the investment firm. For each account, contact the firm and freeze the account. This may be easy if you are an authorized account holder since they may do this with just a phone call. Otherwise, ask for the documentation you need to transfer the investments. According to Vanguard, beneficiaries of a Vanguard account may need a notarized or court-certified small-estate affidavit, a certified death certificate or proof of authority (certified letters of testamentary dated within 90 days), and supporting documentation depending upon the account type and circumstance. Contact the company to get specifics. At the very least, you’ll need the account owner’s full name and address of record and his or her last four digits of their Social Security number to even get started with the process.
  4. Fill out any required forms and mail to the investment firm. This may be extremely time consuming. Be prepared for the fact that if you are inheriting a brokerage account, transfer of that account will take time.

You may want to dispose of an inherited brokerage account without selling it. For instance, you could donate it to a charity, gift them to someone other than a spouse or transfer the account to an irrevocable trust. The point is that inheriting a brokerage account just might be the time to consider hiring a tax accountant or a lawyer.

The financial cost of having mom or dad move in

Thinking about moving Mom or Dad in with you? Often the consideration to do so hinges on Mom or Dad’s poor health or your need for a built in baby sitter for your own children. You may have already considered whether you have enough bathrooms or whether or not you can stand to be in the same home together but have you thought about it from a financial perspective? Here’s some implications you may not have considered.

Moving costs. Moving is expensive. Not only does it cost money, it inevitably costs time and requires diplomacy. Unless your mom or dad is a champion minimalist, she or he will come with baggage—probably decades of baggage. That baggage will own a part of their heart. Moving someone in with you requires making an honest assessment of how much space will be available in the new location and what can or cannot make the transition, deciding how it gets pared down (do you hire someone for the project or do you provide that service), what happens to the things that get pared out, who sets up the new space and who does the actual work of moving.

Living expenses. Inevitably, moving another person or a couple of people into your space costs money in terms of higher utility payments; higher food costs etc. unless you have a mother-in-law house and keep those expenses separate. If your parent is moving in because he or she needs support, will your parent be contributing to his or her care? Deciding who pays for what should happen before the big move. It may help to write up an agreement.

Insurance. Your parent may not be covered on your homeowners insurance and if you are having them drive in your personal vehicle, they may not be covered on your car insurance either. Talk to your insurance agent. If you are moving a parent across state lines, there may be health insurance implications in terms of both coverage and costs. Insurance and the multigenerational household

Home improvements. While we are moving toward a time when housing will all have universal design we aren’t there yet. If you are moving someone in to your home, what modifications will you need to make it accessible and safe for him or her to live with you. Consider hiring a geriatric care manager to give you a realistic idea of how much needs to change to allow your loved one to remain happy and healthy in your home. If you’ll need to provide care for your parent consider getting a Personal Care Agreement signed if they will be paying for any of your services.

Emotionally. If the point of the move is to have a parent close by in order to provide care, having him or her in your house eliminates a primary refuge from your caregiving duties. If you have siblings, get your siblings on board for providing respite care. If siblings are not a possibility, consider the cost of getting some help in order to give yourself a break.

Here’s the original article. Before making such a life altering decision, run the decision past an elder law attorney or a financial planner. There may be tax implications as well as Medicaid ramifications and you should be aware of them before they become something you cannot undo.

Additional article:

Should you move a parent in with you?

Financial advisors warn of possible debt crisis at the Bank of Mom and Dad

A Wall Street Journal article recently reported that withdrawals from 401(k) plans exceeded new contributions in 2013 (the survey is a biennial survey with reports conveyed on odd years) after decades of expansion. That trend is expected to continue as Baby Boomers reach retirement age and begin drawing down their retirement savings. Of concern isn’t that the Boomers are drawing money down for the purpose that they put money in but that they are doing so to support their children. About a third of Baby Boomers support children or other family members. An Employee Benefit Research Institute study released in June found that the amount of money being transferred was large enough to be considered a major spending item in a household budget. This follows a trend that began in 1998. Not surprisingly, the money flow doesn’t usually go the other way around. According to the study, only 4 to 5 percent of older households receive money from their families whereas 38 to 45 percent transfer money to younger family members.

The average cash transfer for two year period when looking at all groups was around $15,000 for those who gave money either as a gift, a loan or support. The tongue-in cheek remark in a Barron’s article about the phenomena was that the silver lining for the parents was that they wouldn’t have to worry about estate taxes. What wasn’t said was that such contributions are likely to affect the retirement security of the parents. What is of concern is that existing surveys analyzing the financial security of older adults do not look at transfers between generations as a budget item. It’s not readily apparent whether such transfers will affect older adults because the surveys also show that the likelihood of transferring goes up with household income and often disappears at much lower income levels.

Finally, assuming that the Bank of Mom and Dad remains fiscally sound until the death of both founders, there’s still the risk that gifts now will reduce the inheritance for children and create a larger opportunity for family fights should one child appear to have benefitted more from his or her line of credit.