A Financial Wellness Check-Up for the Golden Years

Managing our finances always feels daunting, and as we age and come into our later years, there are even more new things to think about. Who will my assets and accounts go to after I’m gone? How have my investment goals changed? Do I know who will make healthcare or financial decisions for me if I am unable to?

There is a lot to consider, but you are certainly not alone. We talked with Wealth Management Advisor Robb Clasen from U.S Bancorp Investments to help break down the important topics into bite-sized chunks. He is an active member of Twin Cities Quorum, an LGBTQ+ business Chamber of Commerce and is also a certified member of the National Gay & Lesbian Chamber of Commerce.

Here are some important things to be thinking about as you check in with your financial side…

Make sure your beneficiary designations are up to date. Beneficiaries are designated people, charities, or trusts that specific accounts will go to should you pass away. Parts of your estate that need beneficiary designations can include, but are not limited to:

• Retirement accounts
• Life insurance policies (including those provided by your employer)
• Bank and brokerage accounts
• 529 education plans
• Investment and mutual fund accounts
• Real estate, including your home and any investment properties
• Business interests
• Personal property

It is important to note that a beneficiary does not have to be relative. It could be a close friend, business partner, a trust, or even a charitable organization. Naming a trust as a beneficiary is an option that can give you more control over how an asset is distributed. With a trust you can distribute an asset slowly, over time, instead of all at once. Clasen says that if you’re charitably inclined, “naming a charity as a beneficiary of a retirement plan can also be a good tax-saving strategy.”

“Failing to designate a beneficiary can be a costly mistake,” Clasen points out. If you do not designate a beneficiary for your assets, or if your primary beneficiary dies and you have not named a secondary one, your assets might become part of your estate and may have to go through the legal process called probate. The probate process may mean extra time and additional costs, which could have easily been avoided with an updated beneficiary designation.”

Make sure you have a will in place. Wills document how you want your assets distributed after you die, and include everything else that does not have a designated beneficiary. A will can also include information like who you want to care for your children. Assets passed according to the terms of a will are supervised by the probate process, a court-supervised process that is public record.

Designate a healthcare power of attorney. A healthcare power of attorney is someone you designate to make healthcare decisions for you if you’re unable to. If something happens and you are unable to make these decisions yourself, you want to know your health is in the hands of someone you trust.

Create a healthcare directive. This is a legal document that outlines and states your wishes regarding life-saving medical events. This can include things like where you want to receive care, your wishes regarding life support, organ donation, etc.

Designate a financial/property power of attorney. “This person will handle your property and financial matters if you’re unable to do so yourself,” Clasen says. Should a health emergency or accident happen, this person could pay your bills or manage other financial considerations on your behalf.

Decide who will be the guardian of your children (if you have any). Be sure to talk about this with your spouse or partner if you have children who are not yet adults.

Start taking your retirement distributions. The IRS requires us, at age 73, to start taking distributions from our Individual Retirement Accounts (IRAs) and employment retirement accounts (401(k), 403(b), 457, SIMPLE IRA, SEP IRA) if you haven’t started taking distributions out of these accounts already. This is called Required Minimum Distribution or RMD. If you do not take the Required Minimum distribution and you’re 73 or older, the IRS will charge you a penalty.

Review your investments and make sure they are still in line with your financial goals. “Something to think about, especially as you get older, is this question: is my money working for me? This means, are my investments producing the returns that I am hoping for? Investing in the financial markets does not guarantee return, and investing in financial markets does include risk and may include loss of principal investment,” Clasen reminds us. “There are many financial vehicles available to you that do not have market exposure; talk to a professional who can educate you and help you select the right financial vehicle. Some of these financial vehicles offer a guaranteed return.” Also consider reviewing your risk tolerance and re-balancing your portfolio if necessary.

And, some final questions for Robb…

Is there anything else that you think is important to consider for financial wellness in one’s later years not discussed above?

Robb Clasen: Some of the issues that our LGBTQIA+ community faces as we get older are the following questions: Who’s going to take care of me as I get older? How am I going to pay for this care? What happens to my assets if I pass if I do not have family or our loved ones to pass these assets to? These are some of the many conversations I have with my clients throughout our relationship, and as we build their financial journey…continuing past their life. Take inventory of what your needs, wants, and wishes are and how are they going to acted on.

Navigating this can be really intimidating and overwhelming, any final words of wisdom for peace of mind?

RC: Final words would be you do not have to travel your financial journey alone. There are many resources available to you. Regretting things that we “should” have done will not serve us to get us where we want to go. Just one step in front of the other and you will be running before you know it. The first step is the hardest. Start now.

Seeking a financial advisor from a banking institution is one great resource for navigating finances, but others include AARP, Money Cava, Nerd Wallet, and LSS of MN and WI.

You can book a free consultation with Robb Clasen at usbank.com/wealth-management

Click “find a wealth specialist” and search him by name.