6 Steps You Should Take to Prepare for Retirement
If You Don't Have Children to Help You in Your Post-Career Years
Children often play a major role in their parents’ retirement. Sons and daughters help make important medical and money decisions while providing emotional, logistical and sometimes even financial support.
But an increasing number of Americans are choosing not to have kids. About 19% of U.S. women currently finish their childbearing years without having a baby. If you don’t have children, you should consider that circumstance when planning for retirement. You need to create a system of legal measures and trusted people to ensure your health, money and well-being are protected, especially when you aren’t able to manage your own affairs. Here are six steps to consider:
Assign Power of Attorney
The person who holds your power of attorney has the authority to manage your finances when you are incapacitated. This should be someone you trust completely to have your best interests at heart. If you don’t know anyone who fits in that bill, you can set up a revocable trust and appoint your bank as your trustee. It would then handle everything from paying bills to filing insurance claims to maintaining/selling your home when you are unable to handle these tasks.
Make a Will
It’s particularly important for people without immediate family to detail their wishes for the distribution of property, burial arrangements and even guardianship of any pets. You will need to ask a trusted someone to carry out your final wishes as executor of the will.
Name a Medical Proxy
This person will have the legal authority to make decisions about your health care when you are deemed incapacitated. This includes whether to move you out of your home and into a nursing facility. So, again, choose carefully. A spouse or domestic partner is an obvious choice. It’s good to have a backup proxy in case you outlive your primary one. If you don’t have children, ask a trusted relative (sibling, cousin) or friend to fill the secondary role.
Write a Living Will
This document details what type of medical care you want in certain dire situations, mostly related to end-of-life treatment. This is where, for example, you will formally tell your medical proxy and doctors that you don’t want to linger on life support.
Plan For Long-Term Care
The cost of senior care is sky-high and rising. Assisted living centers charge an average of $3,300 per month. Nursing homes typically cost $75,000 per year. Staying in your home as you age isn’t cheap either. The cost of daily visiting help adds up. Home health aides can charge $21 per hour. Adult day care averages $67 per day. Consider this reality when calculating how much you need to save for retirement. If you haven’t saved enough to cover that kind of expense consider long-term care insurance.
Such coverage is expensive and gets more so as you get older. Prioritize this in your retirement planning.
Make The Livin’ Easy
That bungalow at the end of a country lane was a great place, but your circumstances will change in retirement. Think about moving to a more convenient location. Consider things like public transit, cultural activities, nearby health care facilities and, of course, proximity to friends and family.
While everyone should take these six steps in preparation for retirement, addressing these issues will provide an added peace of mind for those without the safety net that loving children can provide their aging parents.