Most of us who are middle-aged or older have competing demands on our financial resources: our children, our aging parents, and ourselves. How do we handle it all?
Pay yourself first: Start with yourself. Using your retirement funds to cover current expenses can threaten your financial security. So make a commitment to pay yourself first. Employer sponsored 401(k) plans, Individual Retirement Accounts (IRAs), and variable annuities allow your investment earnings to grow, tax-deferred, until they’re withdrawn; this could mean your assets may grow faster than if you made the same contributions to a taxable account.
Education costs: If you have children, plan for their future. Estimate how much money they’re going to need for college, then consider whether they’ll qualify for financial aid, scholarships, grants, loans, and student work study programs.
Subtract the amount he or she can get from other sources from the total amount required, then work with your financial advisor to develop an investment plan that will make up the difference.
Long-term care costs: Consider your parents’ finances. Do they have the resources to support themselves in a long-term situation? Do you, if they need your financial help? Contrary to popular belief, Medicare only covers about three months in a nursing home after a hospitalization, and Medicaid won’t cover nursing home costs until your parents have exhausted virtually all of their hard-earned personal resources. Careful planning can help you prepare, but it starts with finding out if your parents are prepared for such expenses. Your financial advisor can help.
Yann Kostic is a Financial Advisor (RIA) and Money Manager with Atlantis Wealth Management, specializing in retirees (or soon to be), self-reliant women and Expats in Mexico. Yann works with TD Ameritrade Institutional (custodian). He splits his time between Florida and Ajijic/Manzanillo in Mexico. Comments, questions or to request his Newsletter “News You Can Use”. Contact him at Yannk@AtlantisWealth.com, in Mexico: (376) 106-1613 or in the US: (321) 574-1529.