I PARTICIPATE IN Facebook groups for retirees from my old employer. Having worked in employee benefits for decades, I know or at least recognize the names of many of the people.
Frequently, someone posts an obituary. It used to be that they were much older than me. No longer. Now they’re near my age—or younger. It’s all a bit unsettling. Often, a picture is posted of the deceased. I think to myself, “What happened to Joe?” Then I avoid looking in a mirror for a few days.
I recall during my working days when a new widow would call me. She would ask about her survivor annuity, and there would be none. Or she would ask about life insurance, and she wasn’t named as beneficiary. People who don’t plan for their demise—and don’t consider their family—don’t realize the hardship they leave behind.
That got me thinking about my own estate plan. I want to leave a legacy to help my children with their retirement. There’s just one snag. My oldest son is age 51 and my youngest child is 46. To make my estate plan work, my wife and I can’t be here when they retire, which may be in just 10 years or so.
Here’s the thing: My personal target date is July 4, 2040. That would put me at 97, the age at which my great, great grandfather died. July 4th is also the anniversary of the death of two presidents, Thomas Jefferson and John Adams. Okay, a little weird, but I like having goals.
By at that point, my oldest would be 70 and probably retired several years. To make things more challenging, when he’s 60, his oldest child will be a sophomore in college. And his two younger children will be right behind, still in high school. Another of my children will likely face college bills later in life, too, which isn’t unusual these days.
There appear to be only two solutions to this problem. One, we can start gifting money to our children during our lifetimes. But that means I must violate my lifelong “what if” strategy. I want to be prepared for any event, particularly living a surprisingly long life and the possibility of requiring long-term care.
Meanwhile, I’ll pass on the second solution: a premature Facebook appearance.
Interesting article. I turned 77 today. Our kids are 52 and 48. I am thinking of beginning gifting an amount to them each year. The one 52 can use the money and the other one can do what she wants but will probably save it. We should still have enough to augment their retirement if we live a much longer life. Like Richard, this was not our original plan but investments have grown as we are still managing to live well off pensions and SS.
My wife and I are in a similar situation. One son will be 65 when his son graduates from college and the other will be 71. While we hope to be around to see both grandchildren receive their diplomas we realize that our longevity would delay when they receive their inheritances.
However, knowing that a sizable inheritance is on their horizons will allow them to withdraw considerably more from their retirement savings.
Great article, Dick. I’m 64, and my sons are 38 and 36. So I’m just a few years behind you, and have similar thoughts. My sons, as far as I can tell, have good careers and likely stronger earning potential than my wife and I ever had. And my wife has longevity on her side – her grandmother also made it to 97. So I suspect we will keep watching the situation and adapt as we see how things go for all of us. A big part of this is open and honest communication within the family.
Years ago my wife became the POA for her widowed aunt, who had no children. She was quite well off, but dementia claimed her previously strong financial knowledge. We were working with a very good elder attorney making sure we had a good plan for her. The Aunt was in her early 80s, so the attorney suggested we consider gifting money to the Aunt’s heirs. Her heirs were my wife and her 4 siblings. We agonized over whether this was right – we felt it was a conflict with my wife’s POA responsibility. And we also worried about how much a long illness would cost. We had a family meeting and agreed to try a small amount to each heir. Their Aunt had always been a very generous person and treated my wife and siblings like they were her children. But we all agreed that, if down the road it was needed, we would all provide financial support to the aunt. As it turned out she passed away suddenly 6 months after the first gifting, so we never had to test whether each of us would be there if needed. I had faith we would.
Dick – count me in for another two decades of curmudgeonly articles – keep on writing.