Watch Out for 7 Big Planning Mistakes!

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Already retired or thinking about doing so?  Not at all ready, but want to prepare?

Here are mistakes that couples make in retirement that you want to avoid.

1.  What are you hoping to do in retirement?  Does it match your partner's wishes?  Make sure that your goals allow each of you to enjoy your time after leaving the workforce.

2.  Make sure you have a fund set aside for emergencies:  3 to 6 months of projected expenses.

3.  If you have a blended family, decide what you can both agree on when children need money.  Estate Attorney, Ann-Margaret Carrozza, advises that we not cosign loans for children or grandchildren. And the partners need to clearly decide whose children will receive what inheritance if you have separate assets.

4.  Remember that financial resources are limited in retirement.  Carrozza points out that her "clients fail to properly calculate the amount of money they will need in retirement" and cautions that living below our financial means will help us to prepare for escalating costs.

5. Medicare and private health insurance may not cover the medical center or the physician we want to consult in a serious illness.  And "Eight out of every 10 couples will have an individual who requires long-term care." Setting aside funds to cover a long-term insurance plan might be prudent for most of us.

6. Carrozza suggests that all couples have "health care proxy and power of attorney over each other";  not doing so can result in costly problems in the event that one of the partners becomes incapacitated.  In a cited instance, Carrozza remembers that one partner had to go to court to become the other's court-appointed guardian, costing thousands of dollars and taking months to complete. Don't just assume that you will be able to sign or make decisions for your partner without a legal proxy.

 7.  A big mistake is allowing only one partner to handle all finances. Carrozza advises that couples make financial plans and decisions together, periodically reviewing and making certain that "life changes and law changes are properly accounted for in the plan."

(USA Today for the Arizona Republic, Sunday, April 13, 2014, 7B)