Family Experiences Can Trigger Planning for Long Term Caregivers

Contributed by: Sandra Adams, CFP®

My grandmother died recently. She was 96 (almost 97) years old. The leading cause of death listed on her death certificate was Alzheimer’s disease. The last years of her life were not what I would call the best of “quality” – she had not been able to get out of bed to walk for several years, and while she did recognize her children until the end of her life, she would forget they had been there to see her within minutes. She outlived all of her siblings and most of my grandfather’s siblings (and my grandfather by almost three decades) and had been saying she was “ready to go” for quite some time.

Most of us familiar with Alzheimer’s and related dementias know that there are many types, and it is often hard to diagnose, especially if there are other health concerns. For many, it is more a result of older age than genetics; for those where early onset can be an issue, the symptoms can be masked by stress or other mental health issues, and the dementia can go untreated for years. Alzheimer’s and dementia causes and treatments are making some real progress but remain more of a mystery than they should for the more than 5.5 million Americans living with the disease.

While we are still being told that only a small fraction of those developing the disease are those that are not inherited (1 in 100 according to the Alzheimer’s Association), witnessing my grandmother spend her last several years in a nursing home floor of a hospital prompted me to make sure I had my Long Term Care plans covered.

When my grandparents were my age, Long Term Care insurance was unavailable. And because of that, my grandmother ended up spending down the assets my grandfather worked so hard for during his working life and living out her last years in a hospital nursing home on the memory care floor. She was fortunate to have ended up where she did — she was so well taken care of in a small town hospital. Some people don’t have it so well.

I want to make sure to have more control if this happens to me — and want to make sure that I can afford for care to be provided for me (rather than to have my kids have to do it), so I recently took steps to make sure I have a long term care policy in place that suits my needs. I am taking care of this now to have a plan in place for later.

As I tell clients all of the time, many of us don’t feel it is important to take action until we have had a personal experience with something. For me, watching my grandmother experience Alzheimer’s and Alzheimer’s care for the last several years has prompted me to put a Long Term Care plan into place for myself. If you have had a personal experience prompting you into action and would like our help, please do not hesitate to reach out — we are always happy to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance and policies are subject to exclusions and limitations. Guarantees are based on the claims paying ability of the insurance company.

Have You Prepared Your Advocates?

Contributed by: Sandra Adams, CFP®

Going through the process of completing your estate planning documents is not an easy process. Working with an attorney to determine what documents you need, how you want the language written so that your assets are handled and decisions are made the way YOU want them, and choosing the best advocates to carry out those instructions can be very involved. No wonder it is a task that many people put off doing – it can be overwhelming!

Common Documents With Named Advocates

The most common estate planning documents that individuals have drafted (and that will require advocates to be named) are the following:

Most clients are so relieved when their documents have been drafted; it is a huge weight off their shoulders to have so many important decisions made and in place. It feels satisfying to have the binder of documents drafted by the attorney in hand and completed. 

Perhaps if you are even more “on the ball,” you follow through and get copies of your documents to your financial advisor and update your asset titling and beneficiaries according to the funding instructions provided by the attorney. If you have done that, you are ahead of the majority of clients, most of whom take the big binder home and file it away in a safe place and consider their estate planning completed! But is it?

Have you taken the final step and communicated to those you have chosen as your advocates that you have named them in your documents? 

The Importance of Communicating With Your Advocates

It is not uncommon for people to name others as future advocates for them in their legal documents, but not to communicate to them that they have been named. If you’ve ever been in the shoes of being that named advocate, and getting that “surprise” call that you suddenly need to make a life and death decision about someone’s health treatment when you had no idea you were named as their health care advocate and had not had conversations with them regarding their wishes around end of life treatment, you might think differently about having those proactive conversations.

It is extremely important to take this last step, and not only communicate with your advocates that they have been named in your documents but also give them the key information that they will need to fulfill your wishes.

Here is the key information you need to share:

Patient Advocate/Health Care Advocate:

• Drug allergies

• Current medications (or where to find your medications list)

• Your primary providers, your wishes on Code Status (i.e. DNR or full Code), and where your estate planning documents are located

• Your past surgical history

• Whether or not there is metal anywhere on your body

• What your wishes are for end-of-life care and treatments (i.e. aggressive vs. comfort treatment)

• Plans for future care and any professional relationships and resources that can be used to assist the advocate in their role (social workers, Geriatric Care Managers, etc.)

Durable Power of Attorney/Successor Trustee:

• Contact information for your professional advisors and, if possible, an introduction to those professionals.

• Instructions on where to find an “open me first” document (ex. Personal Financial Record System) that details your financial life (bank accounts, investment accounts, insurance policies, government benefits, employer benefits, etc.)

• Where to find your estate planning documents and a review of your Trust (especially for your successor Trustee, so they have a heads-up on how they might be managing your assets)

• An overview/general conversation about your wishes regarding handling your assets for future care and your values around money.

Executor/Advocate:

• Contact information for your professional advisors and, if possible, an introduction to those professionals.

• Instructions on where to find an “open me first” document (ex. Personal Financial Record System) that details your financial life (bank accounts, investment accounts, insurance policies, government benefits, employer benefits, etc.)

• Instructions on where to find your Letter of Last Instruction document outlining your wishes for after death.

• Where to find your estate planning documents, especially your Last Will & Testament, which will be the guiding document for your Executor.

• An overview/general conversation about your wishes regarding after-death arrangements, about your Will, and how you would like your assets handled post-death, especially if there is no Trust for assets to flow to.

The more information you can share with your future advocates, the better prepared they will be to make the decisions you would want them to make on your behalf should they ever need to serve. An advocate’s job is to be your fiduciary, which means to make decisions in your best interest; without the benefit of having full information on you and your situation, you make it almost impossible for them to do their job to the best of their ability.

If you have taken the time to draft your estate planning documents, our best advice is to complete the process by fully preparing your advocates to serve in your best interest – they’ll be glad you did!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of Sandra D. Adams, CFP® and are not necessarily those of Raymond James. Securities Offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc., is not a registered broker/dealer and is independent of Raymond James Financial Services.

Most Americans Want To ‘Age in Place’ At Home. Here’s How to Plan Your Support Systems

“None of us knows when that event might happen that will cause us to suddenly need help.” - Sandy Adams, CFP®

Read the full CNBC article HERE!

Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Raymond James is not affiliated with CNBC.

When Volatile Markets Stop You from Moving Forward

Contributed by: Sandra Adams, CFP®

The year 2022 was a historically volatile market, with returns in both the stock and bond indexes ending in negative territory for the first time in many years. While 2023 has been positive year-to-date, we are not without continued volatility and concerns, including a possible recession, tax uncertainties, inflationary concerns, and the continuing military tensions abroad in Russia and Ukraine, amongst others. 

I have a more significant number than normal of clients and prospective clients that seem "stuck" when it comes to making decisions about their money and investments in this market environment, almost appearing paralyzed by fear. The concern is that there could be greater harm in not doing anything in these situations than doing something. Let me explain.

The first situation is clients sitting in cash because that is where they feel their money is "safest." With these clients, as interest rates have begun to rise, they may still have cash sitting in bank accounts earning little to no interest and essentially "losing" buying power, as these dollars cannot possibly keep up with rising costs. Certainly, when markets are volatile, wanting to protect your hard-earned dollars from loss can be a top priority. However, not taking advantage of the rising interest rates on things like money markets, U.S. Treasuries, CDs, and instruments that can help earn extra interest on cash can harm a financial plan's long-term success. A commitment to slowly getting back into the market with a small amount of cash (via a dollar-cost-averaging strategy) can be a great way to ease someone back into a more traditional portfolio allocation once markets become more stable. In doing so, clients can get back on track to keep up with the returns they need to meet their long-term financial goals.

The second situation is clients who were relatively aggressive in their investment accounts prior to 2022 (i.e., in their former employer 401k accounts), and now that their accounts are down, they are afraid to make any changes in the portfolio allocations "until" the market comes back. Again, this is an example of seeming paralyzed by fear. It could take many years for the current account to come back, and the question is, are we in the right allocation for your current situation to be leaving it there? If not, perhaps it is better to move on and reallocate to a more appropriate allocation, or if appropriate, roll the 401k over to an IRA and have someone more actively watch it for you on an ongoing basis.

Positive markets are indeed much easier to invest in and to make decisions around. However, when we have volatile markets, we cannot get stuck and be paralyzed by fear, causing our financial plans to fail in the long run. If you or someone you know is feeling stuck and needs to talk to someone about options, please reach out to one of our financial planners for a conversation. We are always happy to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The information contained in this letter does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Sandra D. Adams, CFP®, and not necessarily those of Raymond James. Expression of opinion are as of this date and are subject to change without notice. There is no guarantee that these statement, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Individual investor’s results will vary. Past performance does not guarantee future results. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Widowed Too Soon

Contributed by: Sandra Adams, CFP®

When we hear the term widow or widower, we picture someone older – someone deep into their retirement years. The reality is, according to the U.S. Census Bureau, the average age of a widow or widower in the U.S. is currently 59-years-old. In my recent experience with clients, I have seen the statistics become reality. Clients becoming widowed well before their retirement years has, unfortunately, become increasingly common. The issues involved with this major, and often unexpected, life transition are not simple and are hard to go through alone.

If you are one that is left behind, there are several action steps that should be taken to get back on your feet and feel financially confident. In most cases, this is the woman (according to the U.S. Census Bureau, 32% of women over age 65 are widowed compared to 11% of men). There is no timetable for when these steps should be taken – everyone grieves in their own time and everyone is ready in their own time to move on and make sound financial decisions at different times. No one should be pushed into making financial decisions for their new normal until they are ready.

The first step is identifying sources of income. For young widows or widowers, you may still be working, but may have lost a source of income when your spouse passed away. Looking at where income might come from now and into the future is important. For young widows, life insurance is likely the source of the replacement for lost income. If you are closer to retirement, you may also have Veteran’s benefits, employer pension benefits, savings plans, home equity, income from investments, and Social Security.

The second step is to get your financial plan organized. Get all of your documents and statements put together and review your estate documents (update them, if needed). A big part of this is to update your expenses and budget. This may take some time, as your life without your spouse may not look exactly the same as it did with him/her. Determining what your new normal looks like and what it will cost may take some time to figure out. And it won’t be half the cost (even if you don’t have children), but it won’t be 100% or more either – it will likely be somewhere in between. Figuring out how much it costs you to live goes a long way toward knowing what you will need and how you will make it all work going forward. Your financial planner can be a huge help in this area.

The third step is to evaluate your insurances (health and long-term care). These costs can be significant as you get older, and it is important to make sure you have good coverage. For younger widows, those that are still working may have health insurance from their employer. If not, it is important to make sure you work with an agent to get counseling on the best coverage for you through the exchange until you are eligible for Medicare at age 65. And for long-term care, if you haven’t already worked with a financial planner to plan coverage and are now widowed – now is the time. Single folks are even more likely to need long-term care insurance than those with a partner.

The fourth step is to work on planning your future retirement income. Many widows don’t think enough about planning for their own financial future. What kinds of things should you be talking to your adviser about?

• Income needs going into retirement

• The things you would like to do in retirement/their retirement goals (travel/hobbies, etc.)

• What financial resources you have now (assets, income sources, etc.)

• Risk tolerance

• Charitable goals, family gifting goals, etc.

You can work with the adviser to design a tax-efficient retirement income plan to meet your goals with appropriate tools based on tax considerations and risk tolerances, etc.

And the fifth step is to evaluate housing options. We often tell new widows not to make big decisions, like changing homes, within the first year or two. However, many decide that they want or need to move because the house they are in is too big or they just need to make a move. Housing is roughly 40 – 45% of the average household budget – decisions need to be made with care.

For all widows, going it alone can be difficult with a lot of decisions and time spent alone. For many, it is going through the process of redesigning retirement all over again, now alone, when it was meant to be with your long-time partner. And learning to live a new normal and planning the next phase of life that looks entirely different than the one you had planned. With the help of a professional financial adviser, the financial side of things can be easier – the living part just takes time.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Raymond James and its advisers do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc., is not a registered broker/dealer and is independent of Raymond James Financial Services.

The information contained in this blog has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Financial Literacy Never Stops!

Contributed by: Sandra Adams, CFP®

April is Financial Literacy Month. When many of us think about financial literacy, our thoughts immediately go to our children and educating them on the basics of money – debt, credit, budgeting, and the like. But the reality is that financial literacy is a lifelong process and applies to all of us at all ages and stages of life – the learning never stops. From a child's earliest spending to a senior citizen's retirement decisions, individuals apply their knowledge and skills to financial choices, and it is important that they are making informed decisions at all stages.

What we know:

• People who are financially literate are generally less vulnerable to financial fraud.

• Research shows that financial illiteracy is very common, with the Financial Industry Regulatory Authority (FINRA) attributing it to 66% of Americans.

• In its Economic Well-Being of U.S. Households in 2020 report, the U.S. Federal Reserve System Board of Governors found that many Americans are unprepared for retirement. More than one-fourth indicated that they have no retirement savings, and fewer than four in 10 of those not yet retired felt that their retirement savings are on track.

• Low financial literacy has left millennials—the largest share of the American workforce—unprepared for a severe financial crisis, according to research by the TIAA Institute. Over half lack an emergency fund to cover three months' expenses, and 37% are financially fragile (defined as unable or unlikely to come up with $2,000 within a month in the event of an emergency).

A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending. The earlier one can begin to learn the basics, the better. However, there is always time to learn and apply lessons learned when it comes to handling one's own finances. 

Benefits of Financial Literacy:

Holistically, the benefit of financial literacy is to empower individuals to make smarter decisions. More specifically, financial literacy is important for several reasons.

• Financial literacy can prevent devastating mistakes: Seemingly innocent financial decisions may have long-term implications that cost individuals money or impact life plans. Financial literacy helps individuals avoid making mistakes with their personal finances.

• Financial literacy prepares people for emergencies: Financial literacy topics such as saving or emergency preparedness prepare individuals for the uncertain. Though losing a job or having a significant unexpected expense are always financially impactful, an individual can cushion the blow by implementing their financial literacy in advance by being ready for emergencies.

• Financial literacy can help individuals reach their goals: By better understanding how to budget and save money, individuals can create plans that set expectations, hold them accountable to their finances, and set a course for achieving seemingly unachievable goals. Though someone may not be able to afford a particular goal today, they can always make a plan to better increase their odds of making it happen.

• Financial literacy invokes confidence: Imagine making a life-changing decision without all the information you need to make the best decision. By being armed with the appropriate knowledge about finances, individuals can approach major life choices with greater confidence realizing that they are less likely to be surprised or negatively impacted by unforeseen outcomes.

If you are like we are at The Center and are interested in helping spread the word about Financial Literacy, organizations like Junior Achievement, The JumpStart Coalition, and The Consumer Financial Protection Bureau are great places to go to start.  

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the Sandra D. Adams, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Examples used are for illustrative purposes only.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.

Plan Now for Your 100+ Life

Contributed by: Sandra Adams, CFP®

Between 1900 and 2020, the average life expectancy in the United States rose by more than 30 years. This was due, in part, to improvements in multiple health measures and medical advances such as vaccines and antibiotics. As of 2021, there were 89,739 centenarians living in the U.S., nearly twice as many as there were 20 years ago, according to data from the Population Division of the United Nations. According to research by Dr. Michael Roizen, emeritus chief wellness officer at the Cleveland Clinic and Al Ratner, former CEO and chairman of Forest City Enterprises, as published in their book: “The Great Age Reboot: Cracking the Longevity Code to Be Younger Today and Even Tomorrow,” there are promising medical breakthroughs happening now that could prolong life even more in the near future. According to Dr. Roizen, there is a point in the near future when “90 will be the new 40” in which people will live to be 150 and retire at age 75!

Whether you WANT to live to 100+ may be irrelevant — it may be happening whether you desire to live that long or not. If we will truly be living to age 100+, how should we begin to plan for this? Not only from a financial perspective, but from a personal, psychological and emotional standpoint so that we can have meaningful and valuable long lives? Most of us need to make some changes to prepare for a longer life.

Change Your Mindset About Work

We need to start by changing our mindset about working. Retirement needs to be thought of as more than just the end of your first career/working life at the age of 65 and moving into a life of leisure. If we plan to live to 100+, most of us will need to work past age 65 in some capacity. But can that allow us to work in the same career with a more flexible schedule, or start a business, or do something completely different — something we have always wanted to do, but didn’t feel we could take the risk when we were younger? This is the time to make our next phase of life your best phase of life, starting with making your work meaningful and challenging. For some, this may be by finding our purpose and passion and putting it to work first by finding a way to continue to support us financially a little longer than we originally planned; by doing this, we put ourselves in a better position to be financially independent for the full extent of our long lifespan. For others, this may mean putting our time and talent to work volunteering for causes that mean the most to us and giving back to our communities.

Change Your Mindset About Health

Making a priority of health and well-being is another change we must make if we are to thrive in our quest to live the 100+ life. In order to maintain overall well-being, the following are important steps you need to follow:

• See your doctor(s) regularly for check-ups and proactive testing and vaccinations.

• Maintain a healthy diet (learn to cook or purchase healthy meals if you don’t now).

• Drink plenty of water.

• Avoid unhealthy habits (smoking, drinking too heavily, etc.)

• Maintain a healthy weight.

• Maintain a regular sleep schedule (6 – 8 hours of sleep nightly is recommended).

• Maintain social engagement; avoid social isolation.

• Keep your mind active (continuous learning).

• Maintain a safe living environment.

• Get regular exercise, including cardio, weight training and stretching.

• Get fresh air as much as possible.

• Use stress reduction exercises, including meditation.

• Maintain good mental health; seek a therapist, if needed.

• Seek resources for care assistance, when/if needed.

Change Your Routine and Pursue Your Passions

Determine now what you will do in your next phase of life. When and if you do stop working (some of us will work in some capacity forever), what will you do that means something to you? What are the goals you want to accomplish during your lifetime that are meaningful, personally satisfying, and psychologically rich? All of these components need to exist in your mix of goals and it is important to have a good balance. To fill your life of 30+ years of retirement, you will need to come up with a long list of goals and activities to fill your years. Start now to think of the things you might want to accomplish and the timeframes in which you might want to accomplish them. List anything that you’d like to make happen - getting these wishes down on paper makes them that much more likely to happen! Your “wish list” may include:

• Travel to a particular destination.

• Writing that novel that you always said you’d write.

• Starting a non-profit or working for one that supports a cause that matters to you.

• Taking a mission trip.

• Taking a ride in a hot air balloon.

• Going back to school and getting your college degree.

• Visiting the town where your great grandmother was born in another country and starting to put together your family history.

There are so many possibilities! And the goals that are meaningful to you will be different than those that are meaningful to someone else. The sooner you get started, the better. None of us know our future health trajectory — so get working on those goals and make them happen while you can. The good news is, for many of us, the longer we stay mentally engaged, healthy, and active, the better chance we have to keep going strong!

Change Your Social Engagement

It seems that who we engage with as we age is important. First, stay engaged — with SOMEONE! Staying engaged with people from different generations is a key to staying active and healthy in your next phase of life. This engagement may come in the way of activities with the many generations of your family. Or it may come by being intentionally engaged with other generations — by where you choose to live, how and where you choose to volunteer, engage socially, etc.

Start now!

The 100+ life is truly something most of us should be thinking about, anticipating and planning for. How can we start planning now in order to have to have the most engaging, meaningful and healthy long life possible? One in which we thrive during our entire life, give back to ourselves and our communities in a meaningful way, and are able to support ourselves financially for our entire lifespans? Only by starting the planning process now and anticipating a long life can we be prepared. Work with your professional planning team to start designing your Longevity Plan now. Be prepared for your 100+ Life!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc., is not a registered broker/dealer and is independent of Raymond James Financial Services.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Any opinions are those of Sandra D. Adams, and not necessarily those of Raymond James.

The Challenges of Living Alone in Retirement

Contributed by: Sandra Adams, CFP®

Recently, an article in The New York Times titled "As Gen X and Boomers Age, They Confront Living Alone" has gained widespread attention. As a financial adviser, I have noticed a trend of more clients entering and living in retirement alone over the past five to ten years. This is a topic worth considering, as the number of people living alone in retirement is increasing.

The statistics speak for themselves. According to the U.S. Census Bureau, 36% of American households are currently occupied by single individuals aged 50 and older, a total of nearly 26 million people. This group has traditionally been more likely to live alone, and now that age group, including baby boomers and Gen Xers, makes up a larger share of the population than ever before. Additionally, changing attitudes towards gender and marriage have caused individuals aged 50 and older to be more likely to be divorced, separated, or never married. One in six Americans aged 55 and older do not have children, and because women tend to live longer than men, over 60% of older adults living alone are female.

The challenges of living alone in retirement are real. Here are the top 5 challenges and how to plan for them:

1. Living alone can lead to social isolation

According to the Census Bureau, a higher proportion of older women live alone in retirement. However, men are more vulnerable to the negative effects of solitary living, such as social isolation, which can increase the risk of health issues and a higher mortality rate. Those living alone and not engaging socially may be at risk for general, mental, and cognitive health problems. 

To combat the challenges of social isolation that come with living alone, it is important to make intentional plans. This is especially crucial for those who may not have children or many family members. Finding social groups to be a part of, whether in the community, through hobbies or volunteering, or with current or former colleagues, can keep you connected and engaged with the outside world.

2. Managing the home can become a challenge over time

According to a 2021 AARP study, over 90% of older adults want to continue living in their own homes during retirement. While this desire for comfort and privacy is entirely understandable, managing a home can be financially and physically overwhelming for single individuals as they age. If the home is not designed for "aging in place," it may become difficult to manage if the individual experiences health or mobility issues. To address these challenges, many single individuals may choose to:·

• Pay off their home before retirement. 

• Make home modifications in advance to accommodate future needs. 

• Build flexibility into their financial plan to pay for help with managing their home once they are unable to do so themselves.

3. Single retirees living alone have no built-in partner to be their advocate for estate planning purposes

Deciding on a power of attorney for financial affairs, patient advocate, successor trustee for a trust, and executor for a will can be difficult for single older adults, especially those with no children or family. Those with no family or close friends to ask for these roles may struggle with the decision. 

There are now professional advocates who can fill these roles, such as attorneys for financial power of attorney and successor trustee (or third-party financial and bank Trust departments that can serve as successor trustees), attorneys or geriatric care managers/social workers as patient advocates, and attorneys as executors. However, it is important to note that hiring professionals to serve in these roles requires advanced planning and incurs a cost.

4. Single retirees living alone have no built-in partner to care for them

According to the Department of Health and Human Services, someone turning 65 today has nearly a 70% chance of needing such long-term care in their remaining years. On average, women need care longer (3.7 years) than men (2.2 years). 

For those older adults who are part of a couple, they can avoid paying for professional care longer by caring for each other for some time. Single individuals living alone will likely need to pay for care needs from day one of their needs. One way to address this challenge is to prepare well in advance for this potential need by planning for long-term care needs. 

While you are still working, make sure that you have long-term disability insurance that covers the expense of potential care needs. For the costs that may occur in your retirement years, consider long-term care insurance and/or carve out a portion of your retirement savings earmarked for long-term care expenses. Have a plan for what you will do if you ever have a long-term care event, and have your plan in written form for your advocates. If you aren't able to live in your own home due to your future health, have a plan for where you might consider going and how that will be paid for.

5. From a financial aspect, single retirees rely only on one set of resources and assets

Single individuals living alone are in a unique financial situation. They have only themselves to rely on for the remainder of their lives. There is no spousal Social Security or pension to be a backstop on the income side. It is only their savings and assets that they have to rely on — no one else has anything to leave them. 

Financial planning needs to be very intentional to ensure they can support themselves for the remainder of their lives first and foremost. Planning for the goals of what they want to do and accomplish during their retirement years and for their potential long-term care needs is crucial.

Living single and alone in retirement is a choice, not without challenges. It is especially important for single individuals approaching retirement to work with the appropriate professionals to plan for their second stage in life. With proper planning, living alone and single and alone in retirement can be done successfully.

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A rising number of senior citizens live alone. Sandra Adams, CFP® offers ways to cope with the social and financial aspects of solo living. Watch the video version of the blog HERE!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Raymond James is not affiliated with and does not endorse the opinions or services of Karen Kurson or Retirement Daily.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services. 24800 Denso Drive, Ste 300 // Southfield, MI 48033 // (248) 948-7900

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

How Doing Your Retirement Planning Can Put You in the Driver’s Seat

Contributed by: Sandra Adams, CFP®

I have had some fascinating conversations in meetings with prospective clients over the last several months. Most of these clients have never previously worked with a financial planner, choosing the DIY (“Do It Yourself”) route until now. And for most, now that they are within a few years of retirement, knowing if they truly have the assets and income resources to be able to retire and support themselves throughout their life expectancies is something they do not want to leave to chance.

Going through the in-depth retirement planning process with the assistance of a financial planning professional can help answer the many questions that so many clients have trouble answering on their own or can only guess without accurate analysis. Things like:

• When should I take Social Security (or when should each of us take Social Security if we are a married couple)?;

• When is the best time to draw pensions and/or should I take the lifetime income benefit (if I choose this option, do I take a straight life payout vs. a payout with a spousal benefit if I am married) vs. the lump sum payout from my pension benefit?;

• If I have an annuity(ies), should I use them for income during retirement, and when?;

• What accounts do I draw from, and when do I draw from them to pay the least amount of taxes during retirement?

• How will I pay for Long Term Care if I do not have Long Term Care insurance?

• And most importantly, will I be able to financially support the lifestyle I desire for as long as I may live without running out of money?

Many potential clients I have met recently have come in assuming they will need to work until they are at least 70 (the age of their maximum Social Security age). While they may value their work, in many cases, it has seemed apparent that there was a fair amount of stress involved with the work they are doing. Knowing whether the client could retire earlier than 70 and giving them the CHOICE about when they could retire would undoubtedly put them in the driver’s seat. Knowledge is power!

Doing your retirement planning earlier than later allows you to make the choices you want to make when you want to make them. Knowing where you stand financially, now and into the future, allows you to decide what you want to do and when you want to do it — you are the driver, and you choose the route to your retirement destination!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of Sandra D. Adams, CFP® and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Preparing an Emergency Action Plan

Contributed by: Sandra Adams, CFP®

Unknowns are a part of all of our lives, and the potential for the big "unknowns" becomes more significant as we age.

It is a best practice to have a full aging plan in place as we go into our retirement years. This includes:

• Where we might consider living as we age;

• Where, how, and whom we would consider having care for us as we age if we need care;

• How we will use our money, and whom it will go to once we are gone; and

• Who will help us with all of this if we cannot manage things as we age

An aging plan should also include an Emergency Action Plan. What is this, you may ask? It is the minimum provisions you should have in place in case an unexpected event occurs. Even if you don't have a full aging plan in place, an Emergency Action Plan is crucial. So, what should be part of an Emergency Action Plan?

• Name Advocates. By this, we mean having your Durable Power of Attorney in place for your financial affairs and your Patient Advocate Designation. If you have no one to name or if your family/friends' advocates need assistance, there are ways to have professional advocates in place to serve or assist (talk to your financial planner to discuss these options).

• Document Your Important Information in Advance. This includes your financial and health information so that your advocates are prepared to serve on your behalf without missing a beat. Our Personal Record Keeping Document is an excellent place to start this process.

• Communicate to Your Advocates that they have been named and verbally communicate your wishes. Your advocates can only make the best decisions for you and carry out your wishes if they (1) know they have been named your advocate and (2) are aware of the decisions you'd like to have made on your behalf.

Planning ahead is the best gift you can give yourself and your family. Having a full aging plan in place, but at a minimum, an Emergency Action Plan can put the pieces in place to allow for decisions to be made on your behalf in the way that you want them to. It can also provide resources for your best interests in your most critical time of need. If you need to put an Emergency Action Plan in place, ask your planner for assistance!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of Sandra D. Adams and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.