By Sue Yoon
Special to the NW Asian Weekly
1. What mistakes do most seniors make about finance?
There are a lot of things that come to mind, but to sum it up, I’d say the lack of a comprehensive plan with a trusted advisor. When you aren’t working with a financial advisor, I find that many decisions are made quickly due to either lack of planning or urgent needs. Working closely with an advisor can help you plan for these unforeseen events, prioritize your expenses, and educate you on various options that you may not have considered.
Here are a few tips to help you with your plan for retirement:
Organize your resources
By the time you retire, you may have a number of retirement accounts at former employers and across multiple financial institutions. It may make sense to consolidate your retirement savings with one provider to ensure your investment plan is coordinated, and to make it easier to track your savings.
Get serious about your retirement paycheck
Refine your plan for how you will generate a reliable income stream from your savings and other resources.
At this point, you will want to carefully determine the expenses you will need to cover and how and when you will withdraw money from your retirement plan account(s).
Take steps to ensure you’ll be able to cover essential expenses
Depending on your situation, you may want to convert a portion of your savings into an annuity to help create a guaranteed income stream.
Contact a financial advisor to determine if an annuity is right for you.
2. How would you advise them so they don’t feel overwhelmed?
I would advise them to prioritize their goals and revisit them often. Coming up with a comprehensive financial plan doesn’t always happen in one day. Take things slowly and work forward from today.
Consider these questions; be honest and open about your answers:
· What do you want to do in retirement?
· What is most important to you?
· Who do you want to spend time with?
· Where do you want to live?
· Would you like to continue working in retirement, whether it’s a part-time job, a second career, or your own business?
· How do you see yourself supporting family members (parents, children, siblings) in the future?
· How will you balance your travel or entertainment needs with other expenses like food, housing, and health care?
3. What’s your financial advice for rich and poor elderly?
Whether you are well off or not, it’s important to plan for contingencies. Retirement often brings unexpected challenges and opportunities. When you experience the unexpected, it helps to have your finances and financial documents in order. Do you need — or have — the following financial tools in place?
An up-to-date will — in some states, it may also be necessary to set up a trust.
Appropriate updated beneficiary designations on insurance policies and retirement accounts — these designations take precedence over wills.
A financial safety net to care for a surviving spouse or partner — in many cases, pension and Social Security payments are reduced when one partner dies while expenses remain about the same.
Durable powers of attorney for your finances and health care — these documents ensure that someone you know and trust is appointed to make decisions for you when you are unable to do so.
Trusts established to address special issues like blended families, caring for family members with special needs, or charitable giving.
Secure, easily accessible storage for important documents — such as tax documents, trusts, and insurance policies — to give family members the peace of mind that comes from knowing copies of all your documents are in order. (end)
Sue Yoon is a Wells Fargo’s Private Banker.