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Planning Retirement with a Cognitive Decline

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The Director of Volunteer Programs at the Alzheimer’s Association, Stephanie Rohlfs-Young, explains that families shouldn’t let a diagnosis disrupt proper financial, estate and retirement planning. She recommends several proactive and tactical steps that individuals and families can undertake to address issues related to cognitive decline.

Barron’s recent article entitled “Cognitive Decline Shouldn’t Derail Retirement Planning. Here Are Some Tips to Prepare Your Finances” provides some tips on navigating the financial aspects of cognitive decline. Let’s look at some of them:

Inventory. For budgeting and estate planning purposes, families should conduct a thorough inventory of the individual’s property and debts to create a list of those who have access to each account. Ask about and include online checking, savings, credit-card and investment accounts. These can be neglected, if they aren’t in paper form. Try to work with the individual in cognitive decline to ascertain this information, when they can still be helpful. You don’t want to lose all those assets. This task can be challenging, when children aren’t aware of their parents’ financial dealings. This can include savings, insurance, retirement benefits, government assistance, veterans’ benefits and more. Families should also pick a lead person to be in charge of financial or legal matters.

Calculating future costs. A diagnosis of this nature is the time to figure out and plan for care costs that may include adult day care, in-home care and full-time medical care. These can costs vary widely, and many times families underestimate the amount they’ll spend on care. Families often fail to factor in out-of-pocket expenses that can add up, like prescriptions not covered by insurance. When budgeting, families should see what insurance may be available and if they might add or amend coverage.

Leverage the skills of an elder-law attorney. Partner with an experienced elder law attorney to help get the family’s financial and legal affairs together. Issues can include the titling of assets, trusts, powers of attorney, advance health care directive and more. For some, there’s also Medicaid planning.

Automate finances. Families should devise a plan for routine financial tasks, like bill paying. These are things that will eventually become too difficult for the loved one experiencing cognitive decline. Consider signing up for online banking. That way, an adult child can have easy access to monitor the parent’s account. Monthly bills, including insurance premiums, can be set up for automatic payment to help minimize the possibility of errors.

Organize your important documents. It’s critical after a diagnosis of cognitive decline to name a health-care representative to allow healthcare decisions to be made by someone of the person’s choosing. You should also have a general durable power of attorney for finances in place. This allows the appointed agent to make financial and legal decisions in the individuals’ stead.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Barron’s (Jan. 11, 2020) “Cognitive Decline Shouldn’t Derail Retirement Planning. Here Are Some Tips to Prepare Your Finances.”

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