Top 5 Non-Financial Planning Concerns for Retirees-(5) Family and Intergenerational Concerns
Top 5 Non-Financial Planning Concerns for Retirees-(5) Family and Intergenerational Concerns
Finishing up our Top 5 series with non-financial reasons why some folks struggle in their retirement transitions. “Failure” in retirement does not necessarily mean having money issues. In fact, many retirees who are financially independent just don’t feel that they are “winning” in retirement. And one major reason is that things are just different than they had been for a very long time.
(5) Family and Intergenerational Concerns
The final concern in this series that does not directly relate to financial matters is that retirees often worry about being a burden on their children in the event of financial or health issues. Another common concern is dealing with family expectations regarding the role of the grandparents or other relatives with childcare or, on the other side of that equation, the role of the children or other relatives with caregiving for the retiree.
For these non-financial issues I recommend a family meeting, perhaps facilitated by an elder care expert, retirement coach, or a therapis,t or simply using some of the guidance in some of the reference materials I have cited to in previous articles. This would include the Conversation Project materials (https://theconversationproject.org/) and books such as “The Four Phases of Retirement: What to Expect When You're Retiring,” by Dr. Riley Moynes.
And, of course, there is another financial issue lurking in the background for many folks, a possible inheritance and either an expectation on the part of family members they will receive something, or a sense of obligation on the part of the retiree to ensure they do leave an inheritance as part of their legacy.
Even though I come to this concern from a financial and legal perspective, I advise my clients to think about an inheritance or a legacy as an opportunity to pass on values and wisdom — and not just money — to the next generation. That can be a truly lasting legacy for loved ones.
This should go without saying but no one should have an expectation of receiving an inheritance. There is no legal entitlement to one, and if someone chose to do so, they can disinherit (or simply not provide for) anyone with the exception of a currently serving spouse, as they have legal rights under the laws of their state against total disinheritance. So, since there is no entitlement, a person can decide whether or not to provide an inheritance, and can set (legally valid) conditions including supervision by an independent custodian or Trustee, and can make unequal distributions to beneficiaries based on any criteria they want.
But before we even get to the details of the legacy planning, I recommend that clients think about the big picture as to what they would like the end result to be. This is along the lines of Stephen Covey’s “begin with the end in mind” rule. And then we discuss what the potential legacy amounts and types might be. Of course this is done in general terms with projected amounts since we don’t know when the legacy will be distributed. But if we put some real numbers to the possibilities, then the clients can see what an inheritance might actually look like. And sometimes those amounts are very surprising to them! It helps them understand they have more to spend for themselves in their own retirements and still provide a significant financial legacy if that is what they want to do. And then we can get into more detail about the different “flavors of money” (https://admin.capegazette.com/affiliate-post/different-%E2%80%9Cflavors%E2%80%9D-retirement-money%E2%80%93and-cost-choosing-wrong-flavor/298150) in their investment portfolio to look at tax efficient means of spending and preserving assets.
One visual image I like to use for this is the classic foil swan you used to get in some restaurants for leftovers. I advise clients that their inheritance amounts should be considered their leftovers, and they probably don’t want to leave behind a giant swan for their loved ones, particularly if it meant they did not fully enjoy their retirement years for fear of running out of money!
Thank you for reading this series of the Top Five Financial and Non-Financial Concerns of Retirees. Please reach out to me to learn more about what a specialized retirement-focused, fiduciary, fee-only financial advisor can do for you. You can start by visiting our website at www.SafeHarbor.financial where you will find information about our cash flow approach to retirement planning, the value of using a Retirement Success Advocate, and a list of our standard projects and fees. Or you can call Safe Harbor at 302-313-6644 or email us at info@safeharborfinancialadvisors.com for an initial no-cost, no-obligation assessment meeting.
I feel the need to end this series with another quote from that famous philosopher, Yogi Berra, "We made too many wrong mistakes." By working with financial and other professionals maybe you can avoid making your own “wrong mistakes!”
