Planning  for the “what-ifs” in retirement with Sara Finkelstein

Liz Miller

Planning  for the “what-ifs” in retirement with Sara Finkelstein
Sara Finkelstein.

Sara Finkelstein moved from New York to Florida after visiting her father there and fell in love with it. She initially enjoyed working in her

own home-based business, providing clients with hand calligraphy services. But eventually, she started to feel isolated and wanted a career that allowed her to interact more with people. That's when one of her clients suggested the financial planning field and how rewarding it is to help others reach their financial goals. As a result, Sara obtained the proper licensing to become a financial professional with Prudential Insurance and Financial Services.

After entering the field, she also worked for several companies before striking out on her own and forming the Signature Advisory Group. While working in finance, she focused on Medicare and Social Security planning. Knowing that 11,000 people in the US turn 65 daily and become eligible for Medicare and need help with their Social Security claim, she wanted to be of use.

Sara saw a trend working with the senior population - people are living longer and longer than ever before. Her own husband's grandmother is currently age 98, and his great-aunt lived to 106, and many of her clients live well into their 90s. Most don't expect to live to such ripe ages and are unprepared financially. 

Americans' #1 fear in retirement is running out of money before running out of life. However, living a long life requires appropriate planning, so you have the funds for extended healthcare costs and are prepared financially to live well!

"I learned as a trainee - People don't plan to fail, they just fail to plan. So much of what I do and how I help people are planning for the "what ifs" that happen to us down the road, as we retire, as our relative's age, as we live longer lives."

What healthcare costs should you plan for as you age?

As we age, there are lots of things to consider, including long-term care. According to Morningstar, 52% of people over the age of 65 will need long-term care. Some people may only require these services for a short time, but others will need them for years to assist with diseases like Alzheimer's or Parkinson's. So an essential part of retirement planning is long-term care - because if you don't have a plan in place, it can wipe out your retirement nest egg.

Women especially need to pay close attention to planning their retirement and not leaving it until the last minute or up to a spouse to plan. Unfortunately, Sara found that many women are not actively involved in their own financial planning.

"They don't know what they need to know about their finances and goals. Plus we, women, are already at a disadvantage as we get smaller social security checks, since most women take time off from work to raise children or care for family members."

Social security is an integral part of retirement planning. Like it or not, many of us may not be able to work forever.

"If people haven't planned for the what-ifs or the holes in their financial plans they and their family members may get hurt."

Sara knows this first hand as her mom needed help. She moved her mother to Florida from New York so that she could check in on her. Her mother needed assisted living for six years, followed by two years in a nursing home. Since the pandemic, nobody wants to have their relatives end up in a nursing home more than ever. 

"I realized it could happen to me, just like it happened to my mom - one day I may need long-term care. I had a personal family experience through my mom, but for many the potential need for long-term care doesn't enter their mind because they haven't had an experience with it."

The bottom line, discuss long-term care needs ahead of time before they are required.

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Planning  for the “what-ifs” in retirement with Sara Finkelstein
Planning  for the “what-ifs” in retirement with Sara Finkelstein
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4 Key concepts when planning for long-term care

1. Get A Long-Term Insurance Plan - These written plans provide the funds to pay for care once the insured goes on a claim. These plans are "customizable" to fit one's budget. Some people may not want to purchase the coverage because they don't want to spend money on premiums if they never need the service. A viable solution to this is a life insurance policy with long-term care benefits. Then if you don't need it, the funds pass to your beneficiaries. Still, if you do need it, you have assistance for long-term care and don't have to rely on informal caregivers or retirement savings.

2. Consider Housing Arrangements - Options include aging in place at home, independent living in a community, assisted living, or renting, and having an aide as you age. Factor in these costs in addition to more serious care like a nursing home or hospice care.

3. Long-Term Care Is A Family Affair - Decide who to call when you need help ahead of time. Create a contact plan, services strategy, and consider chipping in as a family to assure you have long-term care if you haven't already planned. It's easier to have a plan in place than deal with a crisis.

4. Your Health Matters - You have to qualify for long-term You must be in good health to qualify for long-term care. Some people aren't eligible at 50 because of poor health, and others qualify at 80 because of good health. The younger you are, the easier and cheaper it is to get long-term care. Plus, long-term care isn't just for older adults 37% of the people using it are between the ages of 18-65 due to a variety of health factors or accidents. Anyone over 40 should consider looking into long-term care.

There's no time like the present to start planning.

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Top 5 Reasons To Start Planning For Your Long Life  Today

3-legged stool for retirement planning.

1. Assure Your Ability to Pay For Care - Make sure you are aware of what healthcare costs in retirement. Fidelity and AARP have done studies on how much to allocate for healthcare in retirement. It’s a big number that doesn’t include long-term care.

2. Guarantee An Income In Retirement - Make sure you can afford to maintain your desired standard of living in retirement. To do this you can combine a variety of assets - if you have them from planning ahead. Whatever your plan make sure you have more than 1 stream of income. Ideally, the 3-legged stool for retirement planning is

- Social Security  - Pay attention to when you start collecting so that you maximize your cumulative benefits.

- Pensions -  Many people don’t have pensions anymore, they have 401k plans instead.  If you do have a pension plan, consider yourself very lucky.

- Personal Savings - Consider your personal savings, market investments, and other assets you have kept invested in for your retirement.

3. Protecting Your Loved Ones - If you are providing for spouses, children, or grandchildren make sure you have the money needed to provide for them. Make sure your health and financial wishes are documented appropriately per your local regulations. Be sure others have access to your wishes.

4. Update Care and Beneficiary Forms - Make sure all the documentation necessary for wills and care wishes are up-to-date so you receive the treatment you desire when you need care and your assets go to the people and organizations you wish them to.

5. Account For Inflation - Inflation erodes our purchasing power so make sure you have a plan in place to keep up with inflation.  The Rule of 72 states that if inflation is only 4%, you will need twice as much money in 18  years to maintain the same lifestyle.

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Planning  for the “what-ifs” in retirement with Sara Finkelstein

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