What the Coronavirus Crisis Says About the Power of Financial Planning
This Influencer in Aging shares money lessons from the pandemic
(Across caregiving and community, business and intergenerational attitudes, the pandemic and how we respond to it could change us forever. Next Avenue turned to some of our Influencers in Aging, a diverse group of thought leaders, for their insights, counsel and opinions of what could lie ahead — if we choose.)
The number of COVID-19 cases continues to climb as the stock market also becomes increasingly volatile. Aging resiliently in these times requires planning ahead for the “what if’s” of retirement and not shying away from difficult conversations.
Before the coronavirus outbreak, I, for one, was not considering the value of a health care directive if quarantined from my family or how my power of attorney could tend to financial matters while social distancing. And yet, these basic planning essentials have proved invaluable for me and for those who have them.
We often think of these as “end-of-life” documents, but in reality they are “live-your-life” documents.
4 Questions to Ask Yourself
Financial planning during the pandemic can come in many forms, but at its crux it begins by asking yourself these four questions:
1. Am I prepared to fund a 20+ year retirement and does that plan account for “less than ideal” circumstances (such as medical expenses and long-term care)?
2. Are my family, financial institutions and medical providers aware of who has decision-making authority on my behalf should the need arise?
3. Do I have provisions in place to protect myself (insurance) and my assets (a will and possibly a trust)?
4. Have I sat down with my family or other trusted people to discuss how I have done my financial planning?
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As the reality of this pandemic continues to unfold, don’t allow it to render you powerless. In the weeks and months ahead, use the time to prepare for life after COVID-19. Consider the following:
3 Areas for Financial Planning
Finances. The most fundamental component to retirement planning is making sure you will be in a position to have a fulfilling and meaningful post-full-time work life. This includes considering worst-case scenarios — such as market tumult, significant medical expenses and now…global pandemics.
You may want to work with financial professionals to help you stress-test your retirement plan by considering long-term needs that may require significant funds or build in cash reserves for unforeseen expenses.
Legal Documents. The power of your estate planning documents rings true now more than ever, as the Next Avenue article “The Dangers of Dying Without a Will” explains.
Have you assigned someone power of attorney or written a medical advance directive? These documents can give a trusted person the ability to pay bills remotely on your behalf or receive medical updates by phone if you are quarantined. We often think of these as “end-of-life” documents, but in reality they are “live-your-life” documents.
Protective Measures. From scammers selling fake vaccines to crooks with bogus investing “opportunities,” COVID-19 is yet another reminder that bad actors will stop at nothing to get their hands on your hard-earned dollars. Consider implementing protective measures with your financial institution, such as listing a trusted contact or setting up large financial-transaction alerts. You might also want to get your banks and investment firms to mail family members duplicate statements for your accounts.
As the pandemic is showing us, planning ahead works both for mundane matters as well as unexpected events. Taking the right steps now can help you rest assured no matter what happens.