By Mitch Adel
What are your new year’s resolutions this year? Are your resolutions, like most of us, focused on spending less and saving more? Unfortunately, that can only take you so far. There is so much attention given to small financial worries that many seniors neglect larger issues that can have a significant impact on their lives and their families. Now is the time for you and your loved ones to think about the big picture, to take steps to protect your assets and to start 2012 off on the right foot.
1. Take advantage of state and federal programs to help pay for medical care, prescription drugs, at-home care or nursing home care.
Seniors have access to a multitude of state and federal programs, but many do not take advantage of them because they don’t know they exist or they don’t know how to enroll. In the realm of health care alone, ensuring coverage for prescription drugs and utilizing programs that pay for at-home care can significantly impact your monthly finances.
Most Ohioans can utilize Medicare Part D to help pay for prescription drugs, and your local State Health Insurance Assistance Program (SHIP) can point you toward the best overall coverage. There are a lot of options, so it’s important to take the time to find the best one for you and your family. It also may make sense to work with a professional with a thorough understanding of the possibilities and drawbacks of each program.
Nursing home care can be even more burdensome—as Medicare pays for only the first 20 days before requiring co-payment. To qualify for any coverage, there also must be a prior 3-day hospital stay. With average Ohio nursing home costs at more than $6,000 per month and all healthcare costs spiraling upward, it’s critical to have a plan to use all of the resources at your disposal to keep expenses from affecting your savings.
2. Make sure you have a comprehensive strategy to protect your assets from taxes and probate.
While clipping coupons can make a dent in your weekly grocery bill, ensuring that your savings are secure can make a much bigger long-term financial impact for you and your family. Tax planning and estate planning are part of a comprehen- sive approach to protecting your finances and your future.
Tax laws are changing dramatically in 2013 with many rates going up. While standard tax advice would encourage deferring payments into the future, the prospect of higher rates in 2013 means that, in many cases, you may want to pay now rather than later.
Probate costs are another way your family can lose assets if you don’t plan ahead. It’s critical to understand the limitations of having a will as your only planning strategy. With only a will, you’ll likely face the poten- tial problems of probate—including high costs and inevitable delays. For many families, planning with different types of trusts and gifting strategies can ensure that your spouse and children receive what they need without the hassles and fees of probate court. These tactics are not only for the wealthy— it may be even more important to the average farm family, for example, who may be land rich but cash poor.
3. Stop worrying about your finances and start enjoying retirement.
The most important reason to plan is so that you can stop worrying. If you know your assets are secure—that your spouse will have enough to live on when you’re gone, that you’ll be able to pass something along to your kids—then you can focus your energy on the most important part of retirement: making these years great. Start thinking bigger and planning now to make 2012 the time you started truly enjoying your golden years. That’s a resolution we’d all like to achieve—and you can.
