“While retirement planning and estate planning are linked, you need to prioritize for everyone to benefit,” firstcoastadvisors.com explains. If you don’t put retirement first, you risk becoming a burden to your children, yet at the same time you wish to secure the future of your descendants. In between the two, though, is one people of the sequence that benzinga.com calls “the pothole”, which is end-of-life medical care costs.
At Geyer Law, we absolutely agree with New England attorney Jules Martin Hass that the cost of living for those who need end of life care is extraordinarily high. With only four basic ways to pay for care, including paying out-of-pocket, long term care insurance, Medicare and Medicaid, even for those who were financially secure throughout their lifetime, medical costs can “feel like insurmountable financial challenges”.
With proper Medicaid planning by an experienced advisor, families can ensure that all of their assets are not lost to a nursing home, and much of our efforts on behalf of retired clients with children is devoted to this area of planning.
Ed Slott, writing in Financial Planning Magazine, suggests planners explore an additional, lesser known avenue of planning to help their clients arm themselves against “the pothole” between retirement and death: Health Savings Accounts.
“A large percentage of many retirees’ savings will go towards health care costs,” Slott points out, and an HSA can be a valuable tool to pay for these expenses. “Most clients with HSAs use them inefficiently,” Slott claims. Whenever they have a qualified medical expense, their first thought is to turn to the HSA . “In the process,” he explains, “they lose out on the opportunity of tax-deferred growth and perhaps more important, they lose out on potentially larger tax-free distributons in retirement.” For clients 65 and older, HSA distributions are no longer subject to penalty.
While retirement planning and estate planning are linked, the attorneys at our Indiana estate planning firm realize the neither one of these can be secure unless clients prepare to avoid “the pothole” of end-of-life medical costs!
by Ronnie of the Rebecca W. Geyer blog team