Older parents are becoming more common. Whether it is societal, educational, maturity or debt related (academic debt), our society, in general is having families later in life, sometimes much later. But later-in-life parents have special estate planning and retirement considerations.
The first consideration is to make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will, and this goes double for a parent having children late in life. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. A proper POA is even more important as people in their 60s, 70s and beyond are more likely to need assistance managing their affairs than their younger counterparts.
In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could, for example, provide for a younger child’s college education and then divide the remaining amount among all the children.
Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years. As an older parent retirement plans may change as the old rule of 4% withdrawals of retirement has recently been replaced with the 3% rule (as it is predicted the stock market returns over the next 10 years will lag behind the last 10). And let’s be realistic, unless you are very, very well prepared for retirement, having babies in your 50s, 60s or 70s will likely mean more years in the workforce to pay for the needs of your young children.
When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent’s primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child’s benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.
So prosper, propagate and plan.
About The Author
Named One of the Main Line’s Top Elder Law Attorneys
by Main Line Today
Robert M. Slutsky has practiced Elder Law since 1992 and was one of the area’s first elder law attorneys. Rob Slutsky advises clients on Medicaid and Asset Protection Planning, Guardianships, Wills, Trusts, Powers of Attorney, Estate Administration, Special Needs Planning and General Estate Planning. He has represented for profit and non-profit elder care providers and the Pennsylvania Department of Aging. Rob Slutsky has been the solicitor for the Montgomery County Office of Aging and Adult Services, the Area Agency on Aging for Montgomery County, for more than 15 years.