Money 404: Coming To The End

Back To Main
Money 403: Passing The Wisdom On

Once you’ve started nearing the end of your career, you’re going to want to cash out the investments

  • Make plans for your retirement
    • How are you going to spend your time?
    • What kind of lifestyle will you be having?
    • How much money will you be spending each month?
    • How much will your healthcare cost?
  • You should be aware on how long it will take to get your money after you’ve retired
  • Keep investing, even if you’re nearing the end of your career
  • When collecting for retirement, be sure you don’t get hurt from doing it too early
    • Do not collect on any after-tax retirement accounts until after age 55 or you will pay an excise (penalty) tax on it
    • Don’t collect Social Security until at least age 67, but preferably age 70
      • The longer you wait, the higher the amount you’ll collect
      • Don’t expect Social Security to help you much, it will barely allow you to survive
    • Don’t dump all of your savings out of the stock market, since non-invested money can depreciate a lot from inflation over a decade
  • Be ready for the taxes that will come from any tax-deferred investments
    • Sometimes moving the money into an after-tax account from your rax-deferred accounts may be the best idea to avoid massive taxation
  • If the situation is complex enough, it’s best to go over the details with a financial analyst

Pay attention to what your body is telling you

  • If you can, keep working for a few more years to delay your retirement and boost your lifestyle after retiring
  • Though you may be able to work for a long time, have an approximate timing of when you’re finishing your career
  • If you’re not excited about retiring, then don’t; most people who retire have no idea what to do with themselves

Make arrangements for your new lifestyle

  • Downsize your home if you need to make your money last longer or the kids are gone
  • If you plan to move to another city or country, start making plans years prior to moving
  • Increase your health insurance to be prepared
  • Re-evaluate your life insurance once your kids have grown
  • Increase your charitable giving if you don’t see your lifestyle needing as much as you’ve saved
  • Start decreasing your work hours in preparation for your new lifestyle

Prepare for the end

  • Decide what will happen when you are ill and unable to handle yourself
    • Designate a power of attorney
      • There are many different types, but typically you should have a durable power of attorney
    • Designate a medical power of attorney for unforeseen medical expenses
    • Designate a trustee to carry out the will honestly and accurately
    • Prepare a living will to minimize taxation
      • If you’re not sure how your beneficiaries will respond, run an experiment with a smaller gift and see how they respond
      • Set incentive rules on assets held in a trust, such as reaching a certain age, getting a college degree or having a child
      • Try giving indirectly like funding towards a college they will go to
      • Start a non-profit family foundation or charity with the beneficiaries as the co-directors
  • Update your will to be sure that your family and friends are still alive and want the assets you’re giving
    • You need to get a will if any of the following happen
      • Marriage, remarriage or divorce, since it automatically revokes a former will
      • Buying a house or other valuable asset
      • Having children
      • Setting up or owning part of a business
      • Receiving an inheritance or large gift
    • Look into the different types of trusts you can set up
      • Make a revocable living trust to allow flexibility in your decision
      • Have a marital trust to allow your spouse to receive assets
      • Set up a pet trust if you need your pets to be taken care of
      • Make a spendthrift trust to limit the trust disbursements to installments
    • Self-made online wills are a one-size-fits-all solution and can’t always account for the complicated situations of real life
      • If you don’t know what you’re doing, you may unintentionally give someone more power over your estate than you want
      • Name the executor, who should be someone you trust while you’re alive as well
      • Get signatures from at least two witnesses who aren’t beneficiaries listed somewhere on the will
    • Speak to a lawyer about getting a more advanced will written up
      • Be sure you research exactly what you’re getting into
    • Specify what will happen at your funeral and consider prepaying it
      • A burial will need a grave plot, and you will need to purchase a plot
      • If you want cremation you’ll need to work with a funeral director
    • Decide if you want to pre-pay anything while your family waits for access to your money
    • Consider a living will to have more control of the transfer of your assets
  • Make preparations for your digital life
    • Set up a master file of everything important related to social networks or internet accounts
    • Include passwords and links to everything that you want managed or erased after you’re gone
  • Put all of your papers in one place
    • Will
    • Letter of instruction
    • Birth certificates
    • Marriage certificates
    • Citizenship papers
    • Divorce/separation papers
    • Adoption papers
    • Social security numbers/cards
    • Passports
    • Driver’s licenses
    • Military records
    • Names/address/telephone numbers of healthcare professionals
    • Healthcare proxies/living wills
    • Medications, dosages and prescribing physicians
    • Address and phone numbers of hospitals of choice
    • Medicare and Medicaid numbers
    • Social worker or caseworker names and contact information
    • Passwords, web sites, and other digital information
    • Income sources
      • Retirement and/or disability benefits
      • Social Security
      • Dividends and Interest income
    • Financial assets
      • Cash
      • Bank accounts
      • Stocks, bonds, mutual funds, money market funds
      • Retirement and pension plans
      • IRAs
      • Annuities
      • Life insurance and other insurance policies
      • Real Estate (property addresses, location of deeds, form of ownership, current value)
      • Automobiles, boats and other vehicles
      • Inheritances
      • Precious gems, collectibles, household items, hidden valuables/items in storage
      • Loans to family members or friends
    • Liabilities
    • Trust documents
Next: How To Be Healthy