“So many people spend their health gaining wealth, and then have to spend their wealth to regain their health.” Variously attributed to A.J. Reb Materi and the Dalai Lama, these words ring true for those climbing the career ladder. But what happens when someone has diligently saved and invested, and loses it all due to a health crisis?
Sixty-eight-year-old Lynne FitzGerald is a prime example. Still young by today’s “senior” standards, FitzGerald found herself bereft of retirement savings after being diagnosed with stage-four colon cancer twelve years ago. Told she had a year to live, unable to work, and with a mortgage and a child in high school, FitzGerald liquidated her investments.
But she beat the odds, becoming a cancer survivor. Yet more than a decade on, she hasn’t been able to recoup her lost savings.
Face the Fear — and the Finances
“There is much to be said about tackling financial arrangements for elders, and what they can do to protect their assets and makes things easier upon their deaths or encroaching poor health,” observes one seasoned HECM loan originator, citing our recent post on the family money discussions that do not take place nearly often enough.
He continues, “As a former banker and investment adviser, plus through a lot of personal experience, I have learned much. When I do Reverses, I am able to touch upon this material in relaxed conversation, mixed in with the reverse product presentation. It shows my clients I know what I’m talking about, and that I’m there for them on a personal level. So many seniors are unaware of what they could and should do to protect themselves and their loved ones.”
He recommends ticking the boxes on these six pro-active steps:
- Beneficiaries: Be sure you have named current beneficiaries on your investment accounts, life insurance policies, IRAs and 401K accounts.
- Set up POD (pay on death) on your bank accounts, or create a separate checking account with a trusted child or sibling to meet the financial needs upon your death, while your estate is being settled.
- Probate or revocable trust? Decide now how you wish your estate to be handled.
- Select a Certified Elder Law attorney to learn more about your options and to be certain all your paperwork is up to date and meets the requirements of the state in which you reside. If you moved within the past several years, you may not have a valid will.
- Locum tenens: Consider adding a trusted resource person to a bank account so they are able to write checks for you in case you become incapacitated at some future date. Sudden illness and accidents can be difficult enough without accumulating unpaid bills and other expenses.
- Learn about Hospice in your location if you are failing, or a loved one is facing death. They can do much to support you and your family through these difficult times.
Increasing Retirement Income
Besides part-time or even full-time gigs, The Motley Fool suggests a dozen ways to generate more retirement income — with number eight being a reverse mortgage. For seniors facing health challenges, this can be one of the better forms of “health insurance,” because if someone opts for a line of credit (HELOC) they need only “pay for it” (i.e., activate the loan) when they need the money. If Lynne FitzGerald had had such information, perhaps she would still have her home today.