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Lauren's Updates

The following content originally appeared in an article by Diane Franklin on OurParents.com on June 11, 2016. Copyright © 2016 OurParents.


Financial Planning for the Assisted Living Resident

Many seniors sell their home when they transition to Assisted Living and use part of the equity for move-in costs and other initial expenses. However, this regularly means a leftover sum from the home sale and uncertainty regarding the most effective way to manage the money. With proper planning, seniors can make these residual funds last for many years to come...

Lauren Klein, a certified financial planner and president of Klein Financial Advisors in Newport Beach, California, stresses that investment decisions for Assisted Living residents depend greatly on such factors as age and health. “There’s a difference between a person moving into Assisted Living at age seventy and someone who moves in at age ninety-three,” says Klein, whose broad-based clientele includes many who are over sixty-five. “The decisions regarding how to make the money last depend on how long the person is going to live.”

Except in cases of terminal illnesses, the remaining lifespan of specific individuals in their seventies, eighties, or even their nineties is difficult to predict. This would explain the attractiveness of an income annuity, which provides a guaranteed monthly income to individuals no matter how long they live. However, Klein cautions against a deferred annuity, which typically begins a year or more into the future and may not allow your loved one to recoup the entire investment.

“Income annuities are like a pension,” Klein says. “They’re reliable, predictable, and do exactly what they say they’re going to do.”

Putting a Team in Place

Financial planning requires the careful consideration of various options, and in some cases, older adults may have diminished mental capacity that may curtail their ability to look after their best interests. In other cases, they may just want confirmation that they’re doing the right thing with their assets.

Financial planning requires the careful consideration of various options, and in some cases, older adults may have diminished mental capacity that may curtail their ability to look after their best interests. In other cases, they may just want confirmation that they’re doing the right thing with their assets.

For that reason, Klein suggests putting in place a team with the senior’s best interests at heart. This team would typically include:

1. A family member or close friend whom the individual greatly trusts
2. A financial planner, preferably someone who has experience working with older clients
3. An estate-planning attorney who can work in tandem with the financial planner to meet the individual’s goals.

Estate-planning considerations often affect financial-planning decisions, but Klein observes the importance of planning for any unexpected situations that may occur in the elderly individual’s life. “For instance, you may need to prepare for unexpected medical or long-term care expenses,” Klein says. “The first priority should be for individuals to take care of themselves. Ideally, many of these decisions should be made before the person actually moves into Assisted Living so that you can factor in the affordability of your Assisted Living choice.”

Click here to read the full article on OurParents.com.

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >