How many times have we heard (or maybe even said) these words? One look at the typical lottery winner will prove that all the money in the world will not make people happy.
As an Elder Law attorney, I work with seniors and their adult children to give them peace of mind about their future. It may revolve around protecting their assets from the cost of nursing-home care, or it may focus on caring for a Special-Needs child. Regardless of their reasons, the vast majority of seniors have some sort of financial plan in place. Some of them have fairly sophisticated plans and work closely with their financial advisor, who may even be in our meeting with them. Others have simple savings accounts with no advisor involved. The common theme though is that they have been disciplined about saving their money and now that they are retired, are relying on that money to be there for the rest of their lives.
Having a sound financial plan is a good thing. However, even the best financial plan in the world is not a comprehensive retirement plan! Every senior I have met with is confused about this. They assume that just because they have been thrifty and have saved their money, that is all that is required for them to have a happy, successful retirement. As the title to this essay suggests though, money alone will not assure them of a happy, successful retirement. A more comprehensive plan is needed.
We talk with our clients about the three main areas that every senior should address- 1) Financial, 2) Legal and 3) Personal. Most financial advisors have a broad knowledge of their client’s financial picture. They know how the funds are invested, how they are performing and who, if anyone, is named as a beneficiary. Many financial advisors also know enough about the legal needs of the typical senior and ask whether their client has a valid Will in place. Even if the client indicates she does have a Will, it might make sense to refer her to an attorney who works with seniors. There are techniques available that will allow the client to pass their estate to loved ones without having to pass through probate and without creditors (and Medicaid) having a claim to those assets. Too, an attorney might find mistakes in the old documents that can be corrected before it is too late to make a correction. Many attorneys (like us) meet with your referrals at no charge and will review their documents at no charge. It therefore doesn’t cost a thing to get a 2nd opinion! The typical financial plan does not address the issues of estate planning, asset protection or end of life care by the way.
The third area of concern is the Personal. This includes where they live, whether they can live independently, whether they can drive, how they will get around if they can’t drive, who will escort them to the doctor, who will make financial decisions, what their wishes might be for their funeral and burial or cremation. These little details are very important to everyone and a typical financial plan does not address these details.
In the real world, many couples have to deal with the loss of one spouse and the economic and personal consequences of that loss. In the real world, people develop chronic diseases, which require caregivers at a cost of $20 per hour. People lose their sight and become dependent on another person. People lose their child or children, leaving them without a caregiver. People lose their cognitive ability and can be taken advantage of by others. These are all issues that can be addressed ahead of time but are not usually addressed in the typical financial plan.
So, if you are a financial advisor, I encourage you to consider reaching out to your clients and discuss with them the need to have a comprehensive retirement plan in place. It will not alter your financial plan at all but will work in tandem with that plan to give your clients what they think they already have, which is a comprehensive plan.