Financial Planning for Those 80 and Older

Written by: Andrew V. Tignanelli, CPA, CFP®

Financial planning is seasonal. The seasons can be early career, young parents, business owner, executive, pre-retiree, and retired. The last season of our planning can be the most complex of them all, especially if you are generationally minded. Some of the complexities of clients over 80 include income taxes, required minimum withdrawals, healthcare, estate planning, eldercare planning, tax-efficient transfer of assets, Roth conversions, assurances of legacy, best living arrangement, proactive steps, withdrawal rate, Social Security, and the sense of fulfillment.

Most of us have no desire to think about or plan around the inevitable end of our own life. This is season of life in which it is most important to build upon family wealth efficiency and minimize invisible losses. Family wealth efficiency is the act of maximizing generational wealth. Invisible losses are financial mistakes that you have no idea happened because of lack of knowledge in tax laws, estate laws, Social Security, insurance, healthcare, and much more. Many times, I have seen people in a zero percent tax bracket with IRA monies that could have been converted 100% tax-free. This mistake is going to cost the family 20-40% in taxes someday in the future.

These mistakes take place not because you failed to understand, but because of the failure of the financial services industry in being too sales-focused and not true professionals of personal finance. A professional financial advisor should be like a general practitioner of medicine. In our opinion, the key components of a professional advisor are being independent of brokers, banks, and insurance companies; educated, credentialled, and experienced in taxes, estates, risk management, Social Security, company benefits, eldercare, education, and all comprehensive personal finance advice; unable to take commissions or referral fees for advice rendered; and always acting in a fiduciary capacity when advising a client.

I will be going over many issues the client over 80 needs to be dealing with in the weeks ahead. Investments are the easy part of the equation, but many of these other issues can be more costly to the family wealth efficiency than a bear market.  Stay tuned as we go through each one.

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