VOL. 130 | NO. 250 | Thursday, December 24, 2015
Rays of Wisdom
Dana and Ray Brandon
Protect Your Retirement From The Unexpected
By Ray and Dana Brandon
Ray’s Take We plan carefully during our years in the workforce to create a solid income for our retirement. But how can we protect that plan after we retire and have less flexibility and increased vulnerability to unexpected events? We want to avoid finding ourselves in the position of having to go back to work.
It’s important to prepare for setbacks and have contingency plans in place before you retire. Here are some things to consider.
Rebalance your portfolio. If you haven’t been an active investor over the years, it’s time to review where, exactly, your money is invested. Continuing a higher-risk portfolio that worked well for you during the accumulation phase could spell disaster in retirement. We know stock market corrections can and do happen, which is why you should diversify away as much of the risk as possible.
Carefully consider your exposure to long-term health risks. This is not the garden variety health issues that go with every life. We are talking about if one of you suffers a debilitating event and you aren’t able to provide care at home. Many people believe Medicare will save the day without realizing that there are some pretty strict limitations involved. The ideal is to be self-insured, but this may not be realistic for everyone, and long-term care insurance should at least be considered. Be sure to pay special attention to the clauses regarding pre-existing conditions; coverage limits, like max cost per day in a nursing home; and waiting/elimination periods.
Consider the financial repercussions upon the death of a spouse. Some retirement assets pass on to the surviving spouse, but not all. Traditional pensions may be generous while the former worker is alive, but that typically changes or ends when they pass away. The same is usually true with Social Security. Consider life insurance to cover any gaps.
Meeting with a financial professional can help you make the best plan for protecting your retirement.
Dana’s Take In Justin Timberlake’s #1 song “Mirrors,” he sings to his beloved, “I’m looking right at the other half of me.” Indeed, a life partner can seem like half of one’s self. In the event that that other half unexpectedly dies, the grief can seem overwhelming.
Transitioning through the loss of a spouse can require a lot of support. Have you and your mate discussed supports in the event that one of you unexpectedly passes away? Have you retained an estate attorney, financial planner or accountant to help the surviving spouse settle the estate and sort out life insurance and other benefits? Do you already have a clergy member in mind or counselor to help your mate with emotional struggles?
Ray Brandon, CEO of Brandon Financial Planning, and his wife, Dana, a licensed clinical social worker, can be reached at brandonplanning.com.