Preparing for the Later Years of Retirement: Part 2

David Ruedi, CFP®, RICP®

Preparing for the cognitive and physical decline that takes place in the later years of retirement is important, but most people spend significantly more time planning for the early years of retirement. This failure to plan often creates problems that could have easily been avoided.

Last week I suggested people preparing for the later years of retirement designate a financial caretaker, create a diminished capacity letter, and keep their spouse in the loop on their finances. Below are four more tips for people preparing to enter this phase of retirement.

Many people accumulate multiple investment accounts over time and have their money spread between various institutions. This makes things more complicated to manage and increases the likelihood an account will be lost or neglected when your health declines or you pass away. Consolidating your assets into as few accounts as possible simplifies your life, makes things easier to manage, and minimizes the chance that something will slip through the cracks.

If you want to stay in your house as long as possible, you will likely need to make modifications that enable you to do so. This may include installing a ramp to your front door or lifts that move you up and down the stairs. You may also want to consider downsizing, moving to a ranch, or moving to a condominium to reduce the amount of upkeep required.

If you plan to stay in your home, you will probably need professional in-home care at some point. These services can be expensive, and it is important to consider the cost of having a caretaker come to your home part-time or full-time in your financial plan.

It is important to research long-term care facilities before you have a serious health issue. Many assisted living communities will have waiting lists to get in. Signing up for the list early can ensure they have a spot for you if your health turns suddenly. Scrambling to find a long-term care facility after someone’s health has declined can make an already stressful situation even more problematic.

People often find it unpleasant to think about the later years of retirement when they won’t be in their best health. But it is even more unpleasant to deal with the problems that arise from failing to prepare for this phase of life. By taking steps in advance to prepare for the later years of retirement, retirees can set themselves up for success during all phases of life.

David Ruedi is a Certified Financial Planner™ professional with Ruedi Wealth Management in Champaign, Illinois.