No matter your age, the pressure of preparing for retirement is always there. You are constantly saving, planning, and thinking ahead to the time that should be the most relaxing and restful of your life.
But there’s one mistake that people make that can cost them their entire retirement if they aren’t careful.
Don’t let yourself fall into the trap that everyone else does—not only can it cost you your peace of mind, but it can cost you a fortune as well.
In all the preparation for retirement, it’s easy to forget that you’ll have reached a certain age when you step away from the office and into relaxation.
Because of this, many people disregard one essential safeguard that is the key to protecting your health, your way of life, and your savings.
Most people have heard of power of attorney, but very few realize just how essential it may be. Whether you are nearing retirement, or you have a parent who is, power of attorney may mean the difference between stability and grueling court cases and money lost.
You see, as life expectancy rises, so do instances of Alzheimer’s and Dementia in senior citizens, which in turn means a question of autonomy.
If you or a parent begin suffering from the effects of one of these conditions, there is a chance you will be deemed unable to make financial and medical decisions.
If you have a parent suffering from one of these diseases, you may find yourself in the middle of an expensive court battle, fighting for the right to make decisions for your elderly parent.
If you yourself begin showing symptoms and haven’t taken the proper steps, you may find yourself without the ability to make decisions for yourself, and without anyone to make them on your behalf.
However, with power of attorney, you can avoid all the frustration, complications, and costs of retirement and the conditions that come along with it.
Now, it can be hard to talk to parents or children about finances and the sad subject of mental and physical health issues, but that doesn’t mean the conversation should be avoided.
It turns out, 73% of Americans haven’t had conversations with aging parents about finances, and 22% never plan to have this conversation.
But this conversation is essential to your parents medical and financial security as well as your own. And when you are nearing retirement, it’s worth reaching out to your own children to have the conversation for yourself.
Though many people have heard of power of attorney, not many know the details of how it works. There are several different ways to bestow power of attorney, depending on your personal needs.
There is general power of attorney, which gives financial and legal responsibility to the chosen party, but excludes medical decisions. However, you can add a clause to include power to make medical decisions, which is highly recommended in case you are in need of treatment and unable to decide on action for yourself.
The second type is limited power of attorney, which gives the appointee a specific task or assignment where they have the power to make decisions for you.
The third option is durable power of attorney, which gives the appointee control from the moment it is signed by both parties. With this type of agreement, it is usually decided that the appointee will not make decisions for the person assigning the power unless they ask the appointee to do so or the assignor is unable to make decisions.
The last option is springing power of attorney, which does not go into action until a specific date or event. This can be a good option for seniors, as it allows you to retain complete control over your life until a certain age.
You can also have springing power of attorney set to go into action only if you are diagnosed with a degenerative condition like Alzheimer’s.
The way in which you choose to bestow power of attorney and the person you bestow it to is completely up to you.
The person you give the power to should be someone you trust absolutely, and though it may be difficult, it’s important to share how you would like your appointee to decide on certain matters.
It can be a difficult subject, but once the conversation has been had, you and your loved ones will be protected from the financial hit of an unexpected illness or situation, and you, your family, and your finances will be safe.
Everyone worries about retirement, but with power of attorney, you can be sure that no matter what happens, you are well cared for.
So, if you haven’t already, it’s time to think about who you want to hand decision making power to so that you can have a stress-free and peaceful retirement.