Solving the Uncomfortable Enigma of Retirement: Transferring Financial Control
Making decisions about when and how to hand over control of your money during retirement can be daunting. It requires self-awareness and trust in others to make important choices on your behalf. The stakes are high if you make the wrong decision or lack a trustworthy person to step in.
Key Takeaways
- According to recent research conducted by Vanguard, many retirees over the age of 55 are not confident in recognizing the ideal time to transfer control to someone else, such as an adult child.
- There is a common fear of waiting too long, either due to a lack of awareness or a reluctance to give up control.
- Protect yourself by freezing your credit reports, involving people you trust and start discussions early on.
According to recent research conducted by Vanguard, many retirees over the age of 55 are not confident in recognizing the ideal time to transfer control to someone else, such as an adult child. There is a common fear of waiting too long, either due to a lack of awareness or a reluctance to give up control.
Even when individuals acknowledge cognitive decline, very few are willing to immediately transfer control. The survey found that 84% of participants preferred to handle their own accounts until signs of further decline were evident.
The challenge lies in determining when that tipping point will occur.
So, what options are available if you don’t have someone to turn to? Hiring a professional fiduciary is a viable solution. Fiduciaries are licensed and regulated agents who can handle various money management tasks and provide assistance with financial decisions.
It is crucial to start discussing this matter early on. Communicate the state of your finances, account details, sources of income, debts, and bill payments. Sharing this information before cognitive impairment becomes an issue gives a trusted individual a wider window of opportunity to respect your wishes.
Don’t delay in preparing important legal documents. This includes a will or trust, a power of attorney for finances, a power of attorney for healthcare, and an advanced directive.
Protect yourself by freezing your credit reports. Contact Equifax, Experian, and TransUnion to make it more difficult for others to fraudulently use your identity. This lowers the risk of exploitation.
Involve people you trust, whether it’s a family member or a fiduciary, from the beginning. Take stock of your financial assets by listing your accounts, the locations of property titles, and your debts. Provide information about insurance policies, as well as the names of professionals such as estate planning attorneys, financial planners, and accountants.
Take steps to block solicitation and unwanted phone calls. Sign up at dmachoice.org to stop commercial mail solicitations, and consider registering the name of your loved one on the “do not contact” list. Opt out of credit and insurance offers at optoutprescreen.com. To stop unwanted phone calls, add your number to the National Do Not Call Registry.
By following these recommendations, you can navigate the process of transitioning control of your finances with confidence and peace of mind.
Rees Bridges brings a unique value to the IFW as both a highly accomplished creative professional and a successful financial services executive to serve in his role as Senior VP, Marketing & Communications.
Over the last decade Rees has served as the lead marketing & communications professional for a Fortune 500 Financial Services firm. He oversaw all advisor marketing strategies, client communications, and the entire firms branding and marketing initiatives.
Rees continues to pursue his passions as a creative professional & musician for over 30 years, with an impressive profile and reputation as a designer, performer, teacher, and studio musician. Here is a little secret: He serves in the role as an international clinician for Mapex drums, Paiste Cymbals and held the record for world’s fastest drummer between 2006 and 2007.
Rees grew up in London, England and currently resides in Miami, Florida. When not at work, he enjoys spending time with family and friends, traveling, and indulging in his passions for music and creative pursuits.
