There are many myths
in Financial Planning.
My personal
favorite is the myth that the Last Will and Testament overrides your
beneficiary assignments.
Often a client will
go to the effort of meeting with an attorney and drawing up a perfectly
adequate Last Will and Testament only to have it undermined completely by the
beneficiary assignments in their retirement accounts, annuities and life
insurance policies.
This can be a real
problem if there is a special needs beneficiary in the family. Beneficiary
assignments should be discussed (and amended if necessary) with your attorney.
My second
favorite myth is that there is no need to plan for long-term care because it
will all just work out fine. I have been approached many times by families in
desperation after they realize that a loved one is going to spend down all of
their assets. There is not
much they can do about it at that point in time. Whether the client decides that Long
Term Care Insurance is part of the solution or not, they should have a concrete
plan of action. They should have a family meeting where these issues are
discussed. The
decision to purchase Long-Term Care Insurance is a family decision based on the
client’s financial assets and health and their viewpoint. I often create
a Retirement Scenario Report looking at how long the assets will last with or
without Long-Term Care Insurance to help clients decide if they can afford to self-insure
or they need the coverage. The important thing is that people need to think it
through and make an informed decision.
Finally,
the third myth is that you can continue to save very little AND still have
enough to live comfortably in retirement. This is one of the things YOU
have direct control over. My goal for all of my clients is to save 15%
each year.
If
you have additional questions, please feel free to call my cell phone at
201-650-0753. Also, check out our website at:
Timothy
Watters, CFP
