Its never too early to address postretirement plans

May 29, 2012
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One of the jokes that surfaces periodically among senior citizens is the one where a person tells his friend he has been having some trouble with the “hereafter.” The friend, who is also getting up in age, knows that people after their active years often turn to religion for a variety of reasons. So he inquires about more details. Unexpectedly, his friend explains that several times a day he will walk into a room and say to himself, “What am I here after?”

Obviously a different problem. But both issues are important to people.

The issue of religious concerns generally is very personal and requires a different framework than what we normally deal with in the human resources arena. However, the issues of aging do fall into our bailiwick. Physical and mental aspects can affect people on the job. Frequently, there are emotional elements to consider, as well. Those of us in HR often escape many of these matters as they tend to be more acute after the person leaves the organization. Sometimes, however, we do have to address such matters if performance issues come into play.

More planning

Last month we discussed the issue of pre-retirement planning as a subject people and organizations should be involved with as older employees approach the transition from full-time employment. That discussion focused mostly on getting ready for a new phase of your life; a stage of life that, with some good planning, could be very interesting and worthwhile. Unfortunately, there is also a period that comes after that one. It’s a point when you need special care or support and eventually involves the matters of dying and death.

This period should be addressed earlier rather than later. It is often one many people don’t want to deal with and avoid talking or even thinking about. Usually it can be better handled, if it is part of a larger planning process. My proposal is to integrate these topics with pre-retirement planning as an extended aspect of the planning. For example, we previously mentioned the matter of where you are going to live. The extension could be handled as, where will I live while I’m active, and then when I need special support? Can they be the same? If you are considering a certain retirement village, look into the services there for people with special needs. Are the homes built to accommodate people with disabilities? Giving consideration to such things may allow you to make better decisions from the start.

Financial ramifications of funding special-care needs are another aspect to long-term planning. It brings into play items such as long-term care insurance. If you think this is part of the solution, don’t wait until your need for benefits is just around the corner. Investigating this solution requires analysis of expected needs, affordability, longevity and sustainability of the carrier, and operational or regulatory factors. Such plans may not be workable if living outside the U.S. is part of your plan. Maybe after you investigate the ins and outs of such long-term care insurance, you will be better equipped to look for other options. They are out there.

Legal and tax considerations

You also will need to keep in mind tax matters as you focus on the funding issues. Getting the game plan in place with wills and trusts doesn’t sound like much fun, but it can avoid a lot of headaches down the road involving health care, life-support decisions and asset management. If you are thinking about maximizing government programs to pay for your nursing home stay, you might want to think about how you qualify and what that nursing home looks like.

Finally, the last aspect of pre-retirement planning might be to give some thought to what happens when you die. Are you trying to build a big estate to pass on to someone, or are you hoping to arrive at this point with just enough to pay for a party for the folks who care about you? This decision could make a terrific impact on those active retirement years. It may mean the difference between some real enjoyment and setting up a situation with struggles between people who are important to you or your estate and your friendly government agency.

The last decisions also may allow you and your loved ones to know how best to work through the sensitive decisions of how you will be remembered, buried or cremated, how will you relate to your life’s work, what will make you think happy thoughts before the end. It is a matter of thinking and planning and sharing with others your wishes in thought and documentation. (We HR folks just never give up on paperwork.)

Once the plan is in place, it just needs to be reviewed periodically and adjusted as circumstances and priorities change.

Ardon L. Schambers is principal of P3HR Consulting & Services LLC.

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