Wedded Bliss: The Marriage of your Retirement Finances

When my clients approach me in preparation for retirement, they are interested in the idea of guaranteed retirement, but don’t exactly know how to make it happen. Honestly, I could give them all the financial advice in the world, but if they don’t have the correct legal documents in order, they could lose everything they’ve put away.

So why waste time and money? Conduct your financial plans properly.

A Revocable Trust, with all of the necessary Elder Law ancillary documents, is the foundational legal document of a retiree’s Financial House. If that is not in order, all of their assets contained in a Financial House, is built on a bed of sand. Hidden underneath that sand bed are usually a person’s health issues, serving as a major sink hole to their preparation.

Unfortunately, in America, we don’t have a Justice system, we have a Legal system. The better the legal documents, the safer the assets are. (If you don’t believe me, just ask OJ Simpson!) A good Revocable Trust will help avoid the issue of probate and taxation. Ironically, dying is the easy part. What if you get sick? For most individuals, getting sick is a much bigger threat to their finances than even the act of dying.

The leading cause of bankruptcy in America in 2009 and 2010 was linked to health issues. Yet, people turned a deaf ear when considering the issue of getting sick; much less, sick enough to need full time care.

AARP reports there is currently a 7 out of 10 chance that an individual will need assisted living or nursing home care in their lifetime. Forget about asking the kids to take care of you. If you love your kids, do what you can to avoid being a burden to them down the road. So, how do you protect yourself from the issue of dying and illness robbing you of your hard earned assets? You have to marry your legal house with your financial house.

Unfortunately, investment advisors and attorneys have adverse relationships, where they refer clients to each other, but, do so only as a necessary evil of their respective professions. Seldom do they work together for the good of the client. A professional insecurity exists, and that is only to the detriment of the client’s successful estate and financial planning goals.

I advise my clients that I will be happy to develop a financial plan for them to follow, but only if they have a qualified Estate/Elder Law attorney that is working with us. That is how important it is in developing a proper financial plan.

Unless unusual circumstances exist, my clients follow the fundamental Rule of 100, a basic financial planning rule that is terribly abused by Brokers. Did you ever hear the phrase, “The longer I’m with my Broker, the broker I get?”

The Rule of 100 means that for every year of life, you have that amount of assets, guaranteed. If it’s your IRA, or any qualified money, it’s usually 100 % guaranteed, especially if you are already retired. You can’t go back and remake what they might lose.

I use the concept of Index Averaging with my clients’ guaranteed assets. Index Averaging has the highest Guaranteed Rate of Return available, usually between 7-9 percent.

To use Index Averaging, I usually integrate Fixed Indexed Annuities. They are usually structured for Medicaid eligibility purposes. These annuities will allow an income stream over an individual’s Social Security Life Expectancy Table and would be exempt from Government attachment for nursing home costs. With this, assets are kept safe from one of the biggest of all health issues—nursing home costs.

Naturally, I believe it’s best to invite an attorney to look over my shoulder on behalf of my clients and their better interests. I’m happy to have someone there to bless what I am recommending to my clients!

When looking to guarantee your retirement security, don’t forget to address the impact from potential health issues. The marriage of your legal and financial houses should work well when attempting to accomplish this.

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