By Greg Sullivan

When I talk about health matters as a retirement disruptor, I’m not talking primarily about bankrupting yourself as a result of a medical condition. That can happen, certainly, and it’s critical to protect yourself by carrying adequate medical coverage and adjusting financial plans in the event of a serious diagnosis, but I’m referring in part to the lost potential to enjoy the retirement you desire—for you and, possibly, for your spouse.

Unfortunately, life may throw us a curveball, and we have to do our best to adjust. Sometimes couples plan to travel extensively in retirement or to live at a golf resort and enjoy their time together. But a person whose activity level becomes severely curtailed by health problems will need to alter his or her expectations for what life will be like.

An adverse health event is an interruption to your retirement that you don’t have full control over; if you or your spouse are confronted with chronic or catastrophic illness, your retirement is going to be affected. The best thing you can do is be prepared with contingencies so that you can be supported—physically, emotionally, and financially.

In Retirement Fail, I explore a number of different health-related scenarios, from health insurance to Medicare to long-term-care insurance to healthy aging, but here I’m going to talk about making sure that you have the appropriate documents in place.

Be Prepared

Thinking about illness and death is not something we like to do, so we tend to put it off. But making your wishes clear before a health crisis happens is often the kindest thing you can do for your loved ones, and it ensures that your medical and financial affairs proceed as you’d like.

Advance directives guide both family and doctors to the types of medical interventions you want and clarify who you empower to act on your behalf if you are not able to make decisions for yourself. Not having your estate documents in good order is a major fail if something should happen to you or your spouse. We have seen this occur too many times; a person dies or is incapacitated and the family has no estate documents or has documents that are outdated. This causes enormous stress at a time that the family should be focused on caring for loved ones and themselves.

If you have not updated your estate documents in the last three to five years, I strongly urge you to talk to an experienced estate attorney and your financial advisor and get this done.

Advance directives consist of two types of documents:

1. Living will. A living will, sometimes called an advance healthcare directive, details your preferences for life-sustaining interventions.
2. Power of attorney (POA). This document designates a trusted person to act on your behalf (as your “agent”) if you are unable to do so.

You may choose one person as your power of attorney for health-care decisions and a different person to handle financial matters. Any power of attorney can be made “durable” with the inclusion of language that extends the agent’s authority in the event you are incapacitated or mentally incompetent at the time the POA expires. Depending upon the jurisdiction and on how the document is drafted, the POA may be effective immediately or it may go into effect at a future point.

Advance directives must be in writing, and each state has its own forms and requirements for creating these legal documents. Some states combine a living will and a medical power of attorney into one advance directive. Be aware, too, that the terminology may vary from state to state, so the POA designated to handle health care may be called a medical or health-care power of attorney, durable power of attorney for health care, health-care proxy, or another term.

Your power of attorney and your health-care providers should have copies of any advance directives. Your POA should also have contact information for your health-care providers as well as your financial and legal advisors, and each should know how to access your important accounts. Make sure to keep your power of attorney document up to date, and designate a new POA if yours should become unavailable for any reason. If you do update your documents, be sure to distribute new copies are destroy any outdated ones. Your attorney and your financial advisor will be able to help you navigate the specific forms your state requires and be sure that all legal conditions are met.

Live Long and Prosper

If you are lucky, you will spend decades in retirement living the life you’ve planned. And sometimes we make our own luck—or at least give it a firm push—so commit to doing what you can to stay healthy for as long as possible. But whatever your future holds, make sure that you are prepared to meet it by putting the proper safeguards for your health needs in place and by properly executing your living will and POA documents.

Cheers,
Greg

To learn more about Greg or want discuss retirement visit, SBSB Financial Advisors.