Retirement isn’t a Place, It is a New Way of Life

Barbados or Myrtle Beach? Retirement has become a part of life for most Americans. However, most think of retirement as a move to a less-expensive state and a change to a more frugal lifestyle. The reality is that a lot of factors should come into your plan for retirement; not just the place, but the new way of life that retirement brings with it.

Factors such as housing and daily living expenses are primary factors, but individuals and couples may forget about tax laws and updating their estate plan in their new home state or they may overlook an area’s healthcare options. All in all, retirement encompasses a lot of important questions.

Housing and Daily Living

Most people planning for retirement want to make sure they have enough money to live out the rest of their days comfortably. The biggest and easiest way to start that journey is to focus on affordable housing. Retirees oftentimes move to another area, another state, and even other countries and their primary goal in the move is to downsize to allow them to gain some equity through the sale of their current home and cut down on large expenses such as property taxes and insurance. Some individuals decide to move to new states or countries, as sometimes housing costs are relatively low in these areas. This way retirees can stretch their hard earned dollars a lot further than they could in their home states.

However, it is important to keep in mind the other expenses that come with moving, including expenses back home to see the family as well as unknown costs, such as costly flood insurance in beach areas. These expenses can add up over time and it is important to remember them when looking to move.

Cultural and Hobby Needs

Another important factor to think on is entertainment. After all, the golden years are supposed to be enjoyed, and living expenses cannot be the sole determining factor. Some retirees have moved to places of particular artistic fervor or to communities, like beach areas where golf resorts, spas, and festivals abound. Others may actually choose a college town, like Boone, NC, or Winston-Salem, NC, so they can take advantage of cheaper housing and also the educational and cultural opportunities around the town. The more a town has to offer, the more enjoyable retirement can be.

Other retirees, and most that have young grandchildren, choose to move closer to family. This can be a win-win for most families as grandparents can provide assistance with childcare and the older parents can help out the grandparents through health care needs.

Health Care Needs

Speaking of healthcare needs, more and more retirees are putting health care at the top of their list when making retirement decisions. It’s no surprise that people are living longer and with that, there comes an increase in the need for healthcare. Places like Raleigh and Chapel Hill, offer great healthcare options, but these areas can also bring a higher cost of living. However, some retirees may live in more rural areas outside of these cities to take advantage of the lower cost of living but also to be within driving distance of excellent healthcare providers.

NC Planning – Food For Thought: Having a Sound Estate Plan

At NC Planning, we assist retirees and those who are entering retirement and even those who are far from retiring. We do our best to work with individuals to put together an estate plan so by the time they enter retirement, they can rest easy to know that their wishes and desires are set.

Powers of Attorney

Healthcare Powers-of-Attorney and Financial Powers-of-Attorney are becoming progressively important for retirement. As people age, health needs become more and more of a necessity and sometimes a person’s mind can fall away. Thus, these Powers-of-Attorney are vital to have as retirees move and start their golden years in other states and even other countries.

Although most Powers-of-Attorney and directive documents are uniform throughout the many states, some nuances and details can vary from one state to another. Thus, we advise our clients to talk with an estate planning attorney in a state or area that they move to as your North Carolina Power-of-Attorney could be ineffective in another state.

Updating Your Will and Trust

We advise that everyone have their estate plan reviewed often, as changes in life and law occur frequently. People change and state and federal statutes change routinely, so having your plan reviewed by an experienced attorney is key. This is true after moving into retirement. For example, if a retiree makes a move to a new area, they will need to have their entire estate plan reviewed by a local attorney who practices estate planning. This includes your will and/or trust, to make sure it complies with that state’s laws.

Even if the attorney’s review shows that the will or trust complies with the new state’s laws, other reasons for changing an estate plan may come after hitting retirement age. For instance, a retiree who made a move close to family may soon realize that her grandchildren are a little too unripe when it comes to handling a potentially large inheritance. In that situation, the retiree may need to put in place provisions to ensure that a trustee can oversee and manage funds for the inexperienced grandchildren.

Reviewing Beneficiary Designations

Another great way to ensure your assets are in line with your changing lifestyle is to review your beneficiary designations on a bi-annual or an annual basis. When you retire, you may forget about your 401(k) or your IRA’s beneficiary designations because you begin receiving the required minimum distributions. You may also experience changing of relationships as you grow older. It is best to remember that the remainder of that large qualified account will transfer upon your passing. It is best to review this account to ensure the right relatives or friends receive what remains at passing.

Maintain Your Advisory Relationships

One of the last good pieces of advice that we give all of our clients is to maintain a relationship with an estate planning attorney, financial advisor, and other trusted advisors. Whether you meet new advisors in your new area or whether you keep in contact with those who assisted you to retirement, it is important to keep up with these trusted individuals as they can help ensure you do not run out of all of your retirement funds! Retirement is supposed to be fun and having a sound estate plan in place prepares one for all that entertainment. It is vital to maintain your relationships with your trusted advisors, and it is important to stay in tune with your beneficiary designations.

Our team at NC Planning approaches this as an advisory team concept to holistically assist our clients, and we can help assist you to retirement and beyond with your estate planning needs. Our practice is built around an ongoing relationship with our clients’ to give them peace of mind in all areas of their lives well into retirement and beyond.