CHECKLIST

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Financial Resources Checklist

Here is a checklist to help you consider the basic steps - which could apply to multiple generations - toward assessing financial resources

Simplify family finances.

Consolidate multiple retirement accounts, reducing the need for active management of assets and decreasing the exposure to investment risk as parents age.

Consider automatic products that provide regular monthly income and bill payment via electronic accounts.

Estimate family income FROM ALL SOURCES.

Calculate total monthly income from sources such as retirement savings plans (IRAs, 401(k)s, pensions), Social Security benefits, personal savings and investments.

Create a tax-efficient strategy for withdrawing money from various funds to make sure it lasts as long as possible.

Review monthly/annual household budget.

Separate “needs” from “wants” and adjust the budget accordingly

Minimize high-interest household debt. Check out www.aarp.org/money/credit-loans-debt for helpful articles on managing debt.

Plug “leaks” in the budget; cut unnecessary expenditures and unproductive spending habits.

Set aside an emergency fund equal to at least three to six months of living expenses.

Make SURE housing COSTS ARE part of the plan.

The financial outlay for a house often remains steep because of mortgage debt and increasing maintenance costs for aging homes. Aging in place is desirable, but your parents need to plan ahead for housing transitions.

Sell, donate, or throw away unnecessary stuff accumulated over the years. This is easier said than done; my family didn’t address this task until after our Mom died—a costly, time-consuming mistake.

Take advantage of eligibility for New York State’s STAR and Enhanced STAR programs to reduce school taxes (www.tax.ny.gov/star/).

Consider selling if it could help get control of expenses without touching retirement savings.

Re-evaluate insurance policies.

With the help of financial advisers, assess your family’s “protection planning”—that is, insurance policies, including life, disability, homeowners, health and long-term care. Make sure insurance needs are adequate and beneficiaries are updated. For more information about beneficiary designations, visit the National Endowment for Financial Education website, www.nefe.org and search for “beneficiaries.”

Focus on health care coverage.

Health care costs—both planned and unexpected medical expenses—will likely consume a significant portion of your loved ones' financial resources during their later years.

Make sure your loved ones have a realistic picture of their health status, and what care is likely to cost if they live for 30 years or more in retirement.

If your spouse or other loved one has not yet retired, does their employer offer an HSA (Health Savings Account)-eligible health plan that could help save tax-efficiently for health care costs in retirement?

Make sure family members (both older loved ones and caregivers) are familiar with basic Medicare programs Parts A and B, Part C (Medicare Advantage, plans administered by private insurance companies)—particularly what expenses the programs will not cover, such as long-term custodial or companion care. Medicare Part D, prescription drug programs, also vary widely in coverage and costs, so do some homework.

If your loved ones have limited income and assets, see whether they can qualify for Medicare Savings Programs designed to help Medicare beneficiaries. Also, to save on prescription drug costs, check out the New York State Health Department’s Elderly Pharmaceutical Insurance Coverage program (EPIC), which helps seniors pay for Part D coverage. (See “Medicare Assistance for Families with Limited Incomes,”)

Consider supplementing basic Medicare coverage with private Part B Supplemental (Medigap) health insurance plans to reduce the risk of unreimbursed medical costs. (See the sections on “Navigating Medicare,” and “Long-Term Care Planning,”)

Consult with your loved ones and their financial advisers about strategies to reduce overall expenses and cover long-term care costs, such as long-term care insurance or Medicaid planning.

ESTIMATE A BUDGET FOR CAREGIVERS, TOO.

Whether you’re being cared for or a family caregiver, creating a budget plan on both sides of the equation may help minimize out-of-pocket costs, while also meeting the needs and expectations of care recipients.