You Shredded Your AARP Card. Now What?

People say that 50 is the new 40, but delivered along with your birthday cards when you turn 50 will be your membership card to AARP. Yes that’s right, your official “pass go” into the American Association of Retired People. Quite ironic, given that retiring at 50 isn’t plausible or realistic for 99.9% of us.

So, after you’ve shredded your AARP card (no early-bird dinner specials needed), it’s time to get realistic about what you need to do to get your insurance and financial life in order. Here is a quick checklist to help you do just that.

Make sure your retirement planning is on track. Hiding your head in the sand because your 401(k) took a hit over the past several years is not a retirement plan. While it may be painful to dissect what you currently have and what you need to save (probably much more than you are), it’s better than the alternative: living in poverty in retirement.

Review your life insurance coverage. Rates for life insurance have come down recently and it is often less expensive now than it was 10 years ago. Sit down with an agent to make sure you’re not overpaying for your coverage and that you have appropriate coverage for your risks.

Explore long-term care insurance. It’s important to understand that this isn’t “nursing home insurance”—80% of people who need long-term care services are receiving them in community settings, which for many of us will be our home. Long-term care insurance protects against the significant financial risk (aka draining your retirement funds) of potentially needing extended care services, at home or in a facility, due to a chronic illness or disability.

Examine your estate plan (or get one if you don’t have one). I know this is daunting, because it is for me, too, and I’m in this business. Keep in mind that the plan you had in place 20 years ago (when choosing a guardian for your children was key) needs to be reexamined. Now it’s about more about managing your assets, mitigating estate taxes and debt. Your advisor may be able to help you with this, or can refer you to someone who can.

Get your legal documents in order. Make sure you have durable power of attorney, which is a legal document that gives someone you trust the ability to act on your behalf if you were to become disabled or incapacitated. In addition, make sure you draft a health-care directive, which gives instructions about medical treatment if you were terminally ill or permanently unconscious.

You don’t have to go this alone. If you don’t have an advisor, you can find one in your community here.

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