by Dave Kutcher
Increased life expectancy seems a good thing, yes? We agree. However, with increased life expectancy come new challenges that can bring significant hardship to our loved ones. Putting aside the need to provide financially for more and more years of retirement as we live longer and longer, we also need to recognize the increase in the possibility of cognitive decline. Diminished intellectual capability is prevalent among our oldest and, without good planning, life can get difficult for those around us who care the most.
There are several things that can be done ahead of time to help mitigate this risk in later years. When thinking and planning about your retirement, you should not neglect the non-financial things that can be put in place to make everyone’s life easier.
A significant part of planning for cognitive decline, to do long before there is any decline, is the establishment of Powers of Attorney. There are different types of Powers of Attorney and some or all may apply in your planning priorities.
A medical Power of Attorney allows someone you have designated to make decisions in health-related matters when you are not able to do so on your own.
A financial Power of Attorney, who may or may not be the same person as your medical Power of Attorney, is provided similar decision-making powers, but with more specific direction as to what financial decisions can be made when you are not able to do so. State law may limit some of these Powers, but basic financial needs will be planned for such as paying your bills.
Some Powers of Attorney are what is called “durable”. This means they can be exercised immediately and for the foreseeable future. Other Powers of Attorney may require a specific event to occur, in which case these Powers are referred to “springing” Powers.
In addition to Powers of Attorney, you should consider establishing a representative that can act on your behalf in lieu of a Power of Attorney. As an example, Social Security may not accept a Power of Attorney, but they do allow for you to establish up to three people in advance to help manage your benefits if necessary. If you don’t have a representative on file with the Social Security department, they might assign someone to assist you.
You may also wish to provide “trusted contacts” with organizations that handle your financial affairs. This trusted contact may or may not be a Power of Attorney, but they give your permission for someone to help in the event you can’t help yourself, even if it is just helping to connect your actual Power of Attorney, as an example.
There are many planning tools at your disposal, all of which should be considered in planning for your retirement … Wills, Trusts, Beneficiary Designations, Advanced Medical Directives, Guardianships, and Powers of Attorney.
Planning for our own demise isn’t easy and forces us to talk about things that can be quite uncomfortable. Avoiding these uncomfortable topics, however, can spell chaos for our loved ones. Remember, no decision is a decision unto itself, and we know your preferred decision would be to not make life more difficult for those around you when the time comes where you need help … physically, mentally or both.
My name is David A. Kutcher, a retired Marine Corp Captain. My business partner in the lower 48 is Richard C. Scott, CLU, LUTCF. For nearly 40 years we have been helping folks with their personal retirement decisions. We encourage you to make an appointment and get ahead of your concerns as early as is possible. You can catch us on the radio every Saturday morning, “Retirement in the Last Frontier”, 8:30-9:30 on AM 650, Keni Radio. Frontier Retirement, 10928 Eagle River Road; Eagle River, AK 99577, (907) 795-7452.
