Aging is inevitable, but if you are like most people, you probably haven’t planned for it as well as you could. Sure, you may worry about whether you’ll have enough money to last for the rest of your life but have you really analyzed your finances in depth? Do you have essential legal documents to protect yourself and your family? What are your long-term care plans and does your family know about them? Where do you want to age and will it be appropriate to your future needs? Creating a plan for aging helps ensure that you maintain control over your life to the extent possible rather than having others make decisions for you. It also relieves some of the burden on your loved ones should you need assistance one day.
Your plan should include the following:
Key Legal Documents
Every adult regardless of age should have these estate planning documents prepared by an attorney:
- A healthcare proxy in which you designate someone to make medical decisions on your behalf if you are incapacitated.
- A living will that outlines your wishes regarding medical treatments and interventions if you cannot communicate your decisions.
- A power of attorney giving someone you trust the authority to manage your financial and legal affairs if you’re unable to do so yourself.
- A will that states how you want your assets to be distributed upon your death and names guardians for children or special needs adults.
In addition, a trust may be helpful in protecting your assets, setting aside money for children, avoiding probate, and other reasons.
As you age, do you want to stay in your present home, downsize but stay in the area, or move elsewhere? Before you make that decision, you should consider issues like:
- Cost of living (buying/renting and maintaining a home, taxes, insurance, food, utilities, etc.)
- Social connections (activities and organizations nearby)
- Ease of getting around especially if you are unable to drive (walkable location, public transportation and/or local assistance for seniors, private taxis)
- Accessibility of your home and whether you could renovate it if needed (stairs, narrow doorways, small bathrooms, etc.)
- Availability of quality healthcare providers in the area (hospitals, doctors, healthcare aides)
- Distance to family and friends
Importantly, you must think about how the above factors would change if your health deteriorated. How easy would it be to age in place? Is moving in with family members a possibility if needed? What about assisted living? You cannot plan for every contingency but you should investigate different options before you need them.
Long-Term Care and Finances
Your aging plan should consider how you would pay for long-term care should you require it. Medicare does not cover nursing home care except in limited instances. Do you have enough saved to pay for professional care either in your home or in a nursing home? If not, you may want to consult an attorney about Medicaid planning which allows you to preserve some assets and still qualify for Medicaid. Long-term care insurance may also be an option.
You should also work with a financial advisor to ensure that you have a solid financial plan in place and you have considered potential healthcare expenses. Also, prepare a monthly and annual budget and closely monitor your income, expenses, and savings so you always understand where your daily finances stand and can make adjustments as needed.
Communicating with Your Family
It’s important to discuss your plans and wishes with your family. If you expect to be relying on them in any capacity, you need to know their perspective and concerns, if any. You also want them to understand your feelings about end-of-life care and explain who you have selected for key roles, such as healthcare proxy, power of attorney, trustee, and/or executor. Good communication will help avoid misunderstandings and family conflicts later on.
Your loved ones should also be aware of where you keep legal and other essential documents. A “just-in-case box” should be prepared with relevant information for family members so they can handle your affairs in the event of your death or incapacity.
Taking these steps is crucial to ensuring that your wishes are followed and you are as prepared as possible for the future. The more you plan for aging, the better off you will be, and so will your family.