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Category: Wisdom

Important Topics for Older Parents to Discuss with Adult Children

Important Topics for Older Parents to Discuss with Adult Children

How do you talk to your adult children about your financial plans and future health-care needs? Both you and your children may view this type of discussion as uncomfortable, awkward, or even confusing. It can be difficult, but putting it off only makes matters more complicated later.

Having these types of financial and end-of-life discussions, ironically, instills a sense of confidence and comfort in everyone involved. Parents who talked with their adult children about their concerns about aging were pleased with the discussions: 95% reported experiencing peace of mind, compared to 63% of parents who didn’t discuss their concerns with their children.[I]

Here are some topics to help get you started.

Caregiving Wishes

 

Making preparations for health-care needs during later years in life is important.

Preparing for future health problems that may affect your independence is a good topic to discuss with your adult children. Most seniors—7 in 10—will require some form of long-term care as they age.[ii] Elderly people generally need some form of assistance with basic daily tasks, such as bathing and dressing. Some 90% of people over 65 prefer to stay at home as long as possible.[iii]

Here are some talking points:

  • Do you intend to stay in your home with a caregiver?
  • Do you prefer to move to a retirement community or nursing home?
  • Do you have long-term care coverage to help your caregiving costs?

End of Life Discussions

Despite the challenges, many families still haven’t taken the opportunity to talk about end-of-life issues. More than half of adult children say they haven’t discussed wills or their parents’ estates.[iv]

Here are some questions to begin the conversation:

  • Do you prefer hospice care, and if so, at a hospice facility or at home?
  • What do you intend to do with your estate?
  • How do you want your family to remember or celebrate your life?

Important Document Locations

It’s important to let your adult children know where you store important documents. Without knowing where documents are, your adult children will have a difficult time upholding your wishes without court interference.

Here are some questions:

  • Where do you keep your will?
  • What passwords do you have for protected accounts?
  • Where can your children find information on the power of attorney?
  • Click here to learn more about estate planning

Ultimately, you should address these and other topics with your adult children soon to help ensure they’re able to carry out your wishes. Your unique life and goals will determine what topics you need to address. Feel free to contact CapSouth Wealth Management at 800.929.1001 for more information. It’s our goal to help you make the most of your financial life.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/Family-Finance-Study-Executive-Summary.pdf

[ii] https://www.phca.org/for-consumers/research-data/long-term-and-post-acute-care-trends-and-statistics

[iii] https://assets.aarp.org/rgcenter/ppi/liv-com/aging-in-place-2011-full.pdf

[iv] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/Family-Finance-Study-Executive-Summary.pdf

Keep Your Finances in Order When Divorcing Later in Life

Keep Your Finances in Order When Divorcing Later in Life

Divorcing later in life is becoming more commonplace among people 50 and over. Divorce among older couples has more than doubled since the 1990s. In 2015, 10 of 1,000 married people filed for divorce. Five of 1,000 married filed for divorce in 1990. The divorce rate for people 65 and older has tripled since 1990.[i]

For older couples thinking about “gray divorce,” ensuring your finances are in order may help ease the strain.

Here are four tips to help make it easier and less stressful:

  • Identify your individual incomes. The impact on older women may be especially difficult. Gray divorce forces many older women between the ages of 50-74 to continue full-time work, rather than retiring.[iii] Calculating future income and assets as a divorcee is important. Getting a divorce can devastate a couple’s finances.
    1. Determine income levels of each spouse. Divorced spouses will no longer be able to rely on their partners’ incomes. In gray divorces, men average income drops of 23%; women’s incomes drop by 41% on average.[ii]
  • Manage your retirement accounts
    1. Divorcing couples will also have to manage how they’ll divide their 401(k) and IRA accounts. After years in the workplace, many retirement accounts have grown substantially in size. Dividing those accounts while maintaining two households can get complicated and expensive. Often, workers listed their spouses as beneficiaries on retirement accounts and insurance policies.
  • Consider downsizing your home
    1. The home is one of the largest assets of older couples. It also generates some of the biggest expenses, especially if retirees maintain mortgage debt. Many older couples are going into retirement with mortgage debt, which can drain cash reserves. A better option might be downsizing to a smaller house or renting a place to offset the reduced household incomes.
  • Stay focused in more contentious divorces, long-time friendships can disintegrate and rifts can form in otherwise amicable families. Begin establishing relationships with your most trusted and loyal friends, which can help fortify your emotional stability and may help protect you against failing health from increased stress.  
  1. Overall, your individual needs and retirement goals will define the financial strategies you should address if divorcing later in life. If you have questions about the options available, or how a divorce could impact you financially, feel free to contact us.
  2. Sometimes divorces, even later in life, can get messy. While financial and budget management is important, guarding your emotional condition and ensuring you maintain a strong support network are important in sustaining long-term security and comfort. Establishing a firm emotional support system helps newly single individuals move forward and adapt to lifestyle changes.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

Investment & Wealth Management

 

[i] http://www.pewresearch.org/fact-tank/2017/03/09/led-by-baby-boomers-divorce-rates-climb-for-americas-50-population/

 

[ii] http://time.com/money/4229581/divorce-after-50/

[iii] http://www.cbsnews.com/news/the-devastation-of-divorce-for-older-women/

Financial Readiness for College Graduates

Have a new college graduate? Give your loved one the gift of financial readiness.

This is the time of year when college graduates prepare to make their career dreams and goals a reality. Despite their degrees, however, they may be ill equipped to face financial challenges. According to an ongoing study by the National Financial Educators Council, the average level of financial literacy in 19-24 year olds is 69%.[1]

College graduates may not be as confident in their abilities to earn, save, and invest their money as you had hoped. Here are 3 tips that can help you prepare your new college graduate:

Tip 1: Consider buying them life insurance.

New graduates are typically excited about their independence and sense of accomplishment. You can help by buying life insurance policies in their names. Buying life insurance now also increases your chances to obtain the lowest, initial rates.[2]

College graduates are generally healthier now than they’ll be in 10 years. Policies increase in cost over time and provide added financial security later in life.

Tip 2: Encourage your graduate to focus on college debt repayment.

College loans compel graduates to make repaying their debt a priority. For the class of 2017, the average graduate debt was $39,400, an increase of 6% from the previous year.[3]

Graduates may in rare cases, such as enlisting in the military, be granted a postponement in repaying their college debts.[4]

Encouraging graduates to work with financial professionals in creating debt-management plans is one of the best approaches. Developing a financial plan early in life helps create disciplined habits of responsible money management that should last a lifetime.

Tip 3: Discuss the importance of starting to prepare for retirement.

Just to sustain an annual $40,000 income, one would need to have saved nearly $1.2 million. However, only 25% of millennials say they believe they’ll need at least $1 million to retire comfortably.[5]

While graduates have several decades of income earning potential, reinforcing the discipline of saving and investing for retirement will pay dividends in so many other areas of their life. By starting early in their careers, millennials will have more opportunities to build and meet their retirement goals.

The statistics are bleak: About two-thirds of Americans say they expect to outlive their retirement savings. Nearly a quarter of Americans have nothing saved. About 10% have less than $5,000 saved for retirement.[6]

Helping today’s college graduates avoid becoming part of that statistic will provide a lifetime of benefits.

All families, including college graduates, face financial challenges. If you would like to learn more about preparing financially for every stage in life, we’re happy to help.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[1] https://www.financialeducatorscouncil.org/national-financial-literacy-test/

[2] https://www.investopedia.com/articles/personal-finance/100615/getting-life-insurance-your-20s-pays.asp

[3] https://studentloanhero.com/student-loan-debt-statistics/

[4] https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance

[5] https://www.cnbc.com/2018/01/16/how-much-money-millennials-think-they-need-to-retire.html

https://aperioncare.com/blog/millennials-on-aging/

[6] https://www.cnbc.com/2018/05/11/how-many-americans-have-no-retirement-savings.html

Check out CapSouth Wealth Management blogs at http://capsouthwm.com/blog/

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