Planning for Couples with an Age Gap

Each estate plan is slightly different, but there are some challenges in estate planning that present themselves to different couples.  One common challenge is planning for married couples who have a significant age difference.

Perhaps the most obvious issue involves overall financial planning.  With age differences, one spouse is likely to outlive the other, perhaps by a considerable length of time.  The younger spouse may therefore feel more comfortable taking certain risks than the older spouse who is more likely to suffer from short-term financial dips.  It is important to balance the interests of both partners.  Couples of different ages require unique planning so that time horizons are meshed.  Retirement planning can be tricky if one spouse plans on working longer.  Similarly, long-term health care planning will be implicated by the age differential.  One spouse may need care earlier, though it is usually not prudent to automatically assume that the younger spouse will be able to provide the needed care.

A recent Morning Star article touched on many of these topics and mentioned a few other issues to consider for couples in this situation.  One point made in the story is that these couples often need to prioritize long-term care and life insurance.  Planning for disability is particularly crucial to couples, because family finances must account for both partners.  If one spouse is injured or faces a medical complication and is disabled, then family finances may be decimated if expensive, long-term care is needed.  In the worst-case scenario, assets are exhausted to care for one spouse while the second spouse remains healthy.  In order for the sick spouse to receive Medicaid support, assets for the entire couple must be below a certain level.  The healthier spouse can be left with little to no assets.  In these situations it is critical to get professional advice, as certain strategies can be employed in order to save as many assets for the second spouse as possible while still allowing the ill spouse to qualify for Medicaid.  This is particularly true for spouses with large age differences, because the younger spouse often needs assets to last for many years to come.

Niche Retirement Communities Becoming More Popular

We've all seen the ads: smiling seniors lounging at the pool or playing golf, laughing, and enjoying the sunshine as a voice-over speaker describes the available space at a new senior living location. Retirement communities have long been popular, but that these assisted living locations are becoming more sought-after than ever. According to a recent US News article, nique senior communities are popping up across the country at a steady clip catering to more and more specific niches in an attempt to closely meet the needs of certain segments of the senior population. Some of the most popular niche senior living facilities (besides those around beaches or golf courses) are "university-based retirement communities." These locations are built around college campuses in order to provide seniors with the opportunity to attend campus events and even sit in on classes.

Many other communities are being built that center around specific hobbies and activities. Across the country new facilities have recently been built targeting seniors who want to become artists, providing help for those seeking to learn how to paint or write their first novel. Another senior facility is even referred to as an "astronomer's village" and is geared toward stargazers with every living unit equipped with a built-in telescope. Yet another targets "aging hippies" where residents are encouraged to make their own living space and practice sustainability techniques. No longer are nursing homes or assisted living facilities the only places where seniors can plan on spending their golden years. Most expect these activity-based living centers to slowly begin branching out to include support for those in need of more and more specialized healthcare.

Costs for these niche communities are somewhat similar to other long-term care options. For example, a recent MetLife Market Survey found that the average national rent for an assisted living facility was about $3,500. Many retirement communities have rent prices that are comparable, ranging anywhere from $2,500 to $7,000 monthly. However, many of these locations also come with "entry fees" which range from $150,000 to $600,000. All or part of the fee may be returned when the resident leaves or dies. Units at these locations can sometimes be purchased.

Missing Your Social Security Statements?

Have you noticed you haven't received one of those green and white social security statements lately?  That's because last April, as a cost-saving measure, the Social Security Administration (SSA) stopped mailing them out.  Later this year they plan to launch an online statement service, although the launch date is still forthcoming.

In the meantime, if you're looking for an estimate of your retirement benefits, try the SSA's retirement estimator. It's interesting to see what you've got - assuming of course it's still solvent when it's your time to retire!

Despite Tough Economy, Baby Boomers Discuss Retirement and Long-Term Planning

It is no surprise that only 9% of Baby Boomers stated in a new Associated Press poll that they were "strongly convinced" that they would be able to live comfortably when they retired. With financial affairs in flux for many members of the 77-million strong Baby Boomer generation, many are beginning to reevaluate their retirement plans. A growing number of local residents find themselves worrying about whether they will be able to live out their golden years in comfort.

One single 47-year old woman profiled in an Associated Press story on the Baby Boomer retirement situation explained that she once planned to retire at sixty and move to the beach. Those plans changed when her pension was eliminated five years ago, her personal investments tanked, and her home of 21 years lost half its value. Now she is not sure what her future holds, but she doesn't expect to move any time soon. When asked about potentially moving when he retired, a 60-year old small business owner explained, "It just depends on what happens to the economy. I'd like to find someplace warmer and doesn't have the high taxes, but we'll just have to see." Many local residents find themselves in the same situation.

The latest poll on the topic found that about 60% of Boomers had retirement plans, personal investments, and real estate that lost value in the latest recession. As a result, more than half of that group expects to delay their retirement. According to the research, 73% of respondents claimed that they will continue to do some work even after they retire. These delayed retirement plans have also led many Boomers to admit that they no longer expect to move out of their current home, and a majority claim that they plan to live out their golden years exactly where they are now. Other priorities for soon-to-be retirees include living near their children and being close to necessary medical care.

The Greening Law Firm knows that while many local older residents would like to age in place, that plan may not be realized if proper long-term care planning is not conducted. The costs of services that a senior may likely need are often quite high. However, steps can be taken ahead of time to ensure that resources are available to pay for those services. No matter how close one is to retirement or how much the recession has affected investments, it is wise to visit with an experienced professional to prepare for long-term living and healthcare needs. Planning adds predictability!