As people approach the later stages of retirement, their “elder years,” they typically face a number of difficult decisions. Although we always want to believe that we’ll make the right decisions when the time comes, none of us can be sure that we actually will. Unfortunately, making the wrong decision in those later years can have severe consequences for us, our loved ones and others.
Some of the difficult decisions elders face include:
- Should I still work? This decision arises frequently with professionals, such as doctors and lawyers, who identify strongly with and have a deep love for their profession. However, professionals who continue to work after their skills have faded risk committing malpractice and facing all its associated consequences.
- Should I continue to manage my investments? Many retirees have long been skilled at handling their own investments. However, managing many complicated transactions when one’s judgement is compromised can lead to poor decisions, like the failure to rebalance a portfolio or holding stocks in companies that have deteriorated badly. This ultimately may lead to a decline in portfolio value.
- Should I still pay my bills and handle other personal financial matters? As with investments, other financial matters that were once easy to handle may become more difficult in the later years of retirement. The risks here include consequences of failing to pay bills, such as cancellation of insurance coverage; penalties for not paying income, real estate, and other taxes; and being victimized by scammers.
- Should I keep driving? Deciding to stop driving is particularly difficult for some retirees because it represents a real a loss of independence. However, the risks of continuing to drive when it’s no longer prudent are sobering. They include the possibility of injuring yourself or others, and potential legal liability.
As we think honestly about how likely it is that we’ll make the right decisions when the time comes, we must acknowledge that not facing these issues is, in and of itself, making a decision. For example, if we wait until next year to decide whether we should stop driving, we are deciding that, for the time being, it’s okay to continue driving.
A Proposed Solution
You can improve your chances of making good decisions by thinking about these issues before you reach your elder years, when you can approach the decisions with clear eyes and sound judgement. Then discuss these issues with others who will be able to help you make the right choices when the time comes. They should be people who have your best interests at heart, and whose judgement you respect. The group may include your children, but it should also include other trusted advisors to increase the odds that you will follow their advice. Once this group has been gathered and briefed on your wishes, you should confirm in a written document that you will follow their advice regarding various difficult decisions.
To make this process as easy as possible, Fiduciary Trust has developed such a document. We call it a SAFE Plan™, which stands for “Sound Advice for Elders.” In a SAFE Plan™ you list the decisions you are most concerned about making wisely as an elder and name the individuals whose advice you pledge to respect. The document states your commitment to follow their advice, and your advisors’ willingness to assume this role for you.
Download The SAFE Plan™ Template
Click here to download the SAFE Plan™ Template.
If you would like to discuss these difficult decisions in greater detail, or if you are interested in creating a SAFE Plan™ for you or a loved one, please contact your Fiduciary Trust officer today.
Click here to view the pdf version of this article.
The opinions expressed in this article are as of the date issued and subject to change at any time. Nothing contained herein is intended to constitute investment, legal, tax or accounting advice, and clients should discuss any proposed arrangement or transaction with their investment, legal or tax advisers.