We recently sold our home and are in the process of buying another one. Dealing with the finances involved with moving from one home to another combined with the almost-weekly articles I read about how ill-prepared many baby boomers are for retirement remind me of how financial issues affect our lifespan. In addition to taking care of our physical and mental health, taking care of our financial health contributes to a secure and rewarding second half of life. In the guest article below, Beverly Cox, (www.simpleinsurancesolution.com) shows us how to think through and address what can be an overwhelming topic for many.

Wealth Preservation

What is wealth protection? In very simplified terms, it is life planning. On the surface it is asking yourself questions about the "what ifs?" that may occur and then running through the scenarios to deal with them. But more deeply it is about being a good steward over the fruit of your labor, taking advantage of opportunities as they are presented and knowing thy self intimately. Below are several keys that will unlock the process for you.



What is it that you feel most unable to manage or face on your own? Where is your fear?

Identify this and you have the starting point to begin the process of protecting your assets, your income and your retirement savings. Notice that I asked about only you... not a spouse or a family member. What do you lose sleep over personally? The vast majority of plans I am asked to develop have multiple parts to them because what is stressful for one member of a family is not at all for another. So this brings us to the first rule, take it very personally, and only consider yourself as if you had to manage all by yourself. Later on we will combine them but for now only consider yourself.

The common answers that I hear are: What people often forget is the greatest wealth that you have is freedom and the ability to have a choice in what you do. Wealth protection is a process where you intentionally create barriers that will stand between you and the list of concerns that we all have. It will, by its very nature, create choice and provide options that can make the stress of dealing with the challenges of money, relationships with family, and health issues reduced or eliminated altogether.



What is your risk tolerance? Identify and do the math.

What resources do you have to protect and where are you in the retirement process? Those who are newly retired usually will have a higher risk tolerance than those who are advanced in age and facing health, mobility, and lifestyle changes. Here is our second rule, know honestly where you are. Quality time with talking truthfully to yourself can help. If you are a control freak by nature and are facing long term care issues, deciding to ignore them as a possibility and choosing to let someone else decide your fate will make both of you miserable, not to mention exposing your financial resources to ever-changing government and social systems. Actually, in my opinion, this is the time you need the most control as normally you have lost it in so many other areas. If you have no resources, you still need to have this moment of truth so that you can adjust to the possibility of limited options and begin to identify what programs may be able to help you. Planning for long term care, critical illnesses and the need for assisted lifestyle options is something over 70% of us will face as we age. Many people are surprised that I refer to this as risk tolerance but it is. Money is only a factor of risk tolerance, no different from your health, your personality and age. Circumstances are a result of planning or lack thereof. The factors that influence the choices you will have were developed many years ago. Ask what you can still do about developing choices today! So if you are still healthy and have the financial resources to fund your own long term care, you will need to be truthful with yourself and ask if paying for it yourself is the best use of your money? If you are desirous of leaving your options open, then you may want to consider transferring that risk or part of it to an insurance carrier either in a standalone long term care policy or a rider on a life policy. Setting aside money in an annuity for that purpose is also a common option. The point is to know where you are. You cannot wait till you need it and then rush out and have someone else pay for it. Responsibility matters here.



Choose to clearly define goals of your plan, and know the importance of each.

The planning options will greatly differ for someone whose goal is to conserve money than it will be for someone who wants to create wealth to leave to family. On the surface the two goals appear to be similar, however how to best accomplish them is very different. Knowing what the goals are and the order of importance are vital to success. This will set the direction and determine some of the safeguards that will need to be in place to enable the goal to occur. This does not mean that you have to have one single focus, but you must realize that there will be tradeoffs that will need to be made. When electing processes, this needs to be considered carefully. Here the third rule is rate importance. Try using this format: think of stairs If you manage to get four steps down, it is awesome, but you must first get the first three goals satisfied. Then and only then, move on to the fourth step. So many financial plans forget this, as they only deal with money. Remember a large part of your wealth is choice. It is the existence of options, the ability to elect the lifestyle that the money provides for. If you have money and cannot use it to grant you the first three steps in your goal, it is not going to work in reducing your stress or addressing your fears. And never ever put a third step in front of a first one. You set the goals. Do not allow others to do this for you.



Now explore the options.

Look at it as a journey that you will want to learn where step each will take you. Ask about choices more than focusing on features, be proactive and do not forget to shop more than one source! Talk with your professional advisors and seek outside opinions so that you have a broad range of solutions that are different. It is the differences that you need to be aware of and how they will impact you. If choosing to use insurance as a protection barrier, get multiple quotes on both similar products and at least one that may have a uniquely different twist. Be open to methods that may be structured differently than you expect.

Wealth protection is about managing risk, how to recognize it, how to deal effectively with it and to make the decision as to how you will address it. You will recognize somewhere in the process if you will be happier transferring it, avoiding it, or mitigating it. And remember real wealth is about so much more than money, it is freedom, choice, and peace of mind, having resources on hand to deal with life emergencies, and knowing where you are going. The process will reveal so much that you will want to share with your loved ones so that they can begin the process of wealth protection today.