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August 03, 2003 at 08:00 PM
Opportunities Abound In The Post-Retirement Planning Market
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Post-retirement planning does not seem to get the same level of attention as pre-retirement planning. Perhaps its because the financial professional views the tools necessary to work in this market as too different, or because the need for planning is considered less urgent in the later years.
Given the increasing longevity of our population, however, and the acknowledgement that total return and equity participation are still very important in the later years, there are numerous opportunities to provide a valuable service to retired individuals–and get paid for your efforts.
Planning needs in retirement are actually very similar to pre-retirement needs. For example, it becomes even more important for seniors to be sure they have a properly drafted will, which reflects their current situation and evolving tax laws. Dying without a will can force some very awkward property distributions, depending upon state intestacy laws.
Likewise, retired individuals need to be sure they have a durable power of attorney, health care power and living will, just like the rest of us.
Beneficiary designations for 401(k)s, IRAs, pension plans, deferred compensation, annuities and life insurance should be carefully reviewed on a regular basis to be sure they reflect the clients current situation and desires. They also need to be coordinated with any other planning tools the client has in place.
Trusts are often created in the post-retirement years, to benefit grandchildren (dynasty trust); disabled children, siblings, grandchildren or parents (special needs trust); to encourage and reward responsible behavior by family members (family incentive trust); or to protect assets (asset protection or spendthrift trust).
Remember that the retired grantor(s) need not be the insured(s) if life insurance is used to fund any of these trusts. The younger, and perhaps more healthy, children can be insured for the benefit of the grandchildren.
