Question: T.H. in Warren County: I am 62, not married, and do not have any kids. Do I need to be doing anything special with my retirement planning?
A: You are part of a cohort that some have dubbed ‘Solo Agers.’ And there are more of you than you may realize: According to the American Society on Aging, about 20% of Boomers fall into this category. From a retirement planning perspective this means, yes, there are a few specific areas you should focus on to help make sure you age on your terms.
First, take a look at your support system. Do you have strong, healthy relationships outside of work? And while you might not have adult children who can provide you with care when the time comes, do you have any other family? Younger siblings? Nieces or nephews? If not, what about a younger, trusted friend?
This then dovetails into your finances and estate planning needs. Every adult should have what’s called a ‘power of attorney’ document for both healthcare and finances. In these documents, you name a trusted person to make healthcare and financial decisions on your behalf, respectively, if you are no longer able. This doesn’t have to be the same person, but it can be. As a ‘solo ager,’ it’s vital that you figure out what your legal guardianship looks like in the future.
You should also think about your home. While most people would like to age-in-place, is this going to be feasible, especially if you don’t have an adult child to provide care? You could consider hiring an in-home aide, assuming you can afford to do so. There are also several types of retirement communities from which to choose, including assisted living and independent living. There are even now some communities that promote ‘co-housing’ – yes, just like the Golden Girls.
Here’s The Simply Money Point: As you approach retirement, it’s critical you start thinking about – and deciding – who to trust with your personal directives and assets. We highly recommend working with an estate planning attorney to arrange the proper legal documents.
Q: Chris from Anderson: I’ve used a bank forever, but I recently changed jobs and now have access to a credit union. Is using one better than the other?
A: First and foremost, it’s important to understand that credit unions and banks have two entirely different business models. Banks are for-profit and have shareholders. Credit unions, on the other hand, don’t have stockholders and are considered non-profits. Why does this distinction matter? Credit union members are also the ‘owners,’ allowing the credit union to return more profits to members.
This ‘member-owned’ approach also helps credit unions typically offer higher interest rates on savings accounts and lower interest rates on loans. They generally have lower fees and are more flexible if you have less-than-stellar credit.
However, banks come with their own set of advantages. Banks are typically larger with a more extensive branch and ATM network. They may also offer more account and service options, as well as technological perks.
As for safety, both types of institutions federally insure deposits up to $250,000: the FDIC (Federal Deposit Insurance Corporation) insures banks, while the NCUA (National Credit Union Administration) insures most credit unions (some are privately insured, so be sure to do your research).
The Simply Money Point is that you need to prioritize what matters to you (Higher interest rates? Easier access to ATMs? Technology? Lower fees?) and make your decision based on these insights.
Note: In last week’s column, we mentioned you should work with an estate planning attorney if considering a post-nuptial or pre-nuptial agreement. We should have said a family law attorney.
Every week, Allworth Financial’s Nathan Bachrach and Amy Wagner answer your questions in their Simply Money column. If you, a friend, or someone in your family has a money issue or problem, feel free to send those questions toyourmoney@enquirer.com
Responses are for informational purposes only and individuals should consider whether any general recommendations in these responses are suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional adviser of his/her choosing, including a tax adviser and/or attorney. Retirement planning services offered through Allworth Financial, an SEC Registered Investment Advisor. Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Call 513-469-7500 or visitallworthfinancial.com.