One of the most im💖portant, but easily neglected, steps in preparing for retirement is communicating your plans to other people who will be affect💜ed by them. In particular, if you have children, you may want to share certain financial and other information—for both their benefit and yours. 

How much detail you choose to provide can depend on how close you and your kids are. If you have one or more 🌳children who are up to the task, you may also want to give them the legal authority to make financial and medical decisions on your behalf, should you ever become unable to. A good time to do that is before you retire, as part of the planning process. However, if you’re already retired and haven’t yet done this, then the sooner, the bett🌺er.

It makes sense to take charge of your future and ma🌺ke your plans and feelings known while you’re very much in control of your life, before health or other issues make that more difficult. This article provides a checklist of topics to help facilitate that conversation.

Your Home

For many people, retirement is a time for downsizing to a smaller home. Your current abode may be larger than you need or too costly to maintain. The property taxes may be too high. You may be considering moving to another part of the country or 澳洲幸运5官方开奖结果体彩网:to another country altogether. Or you might be considering a 澳洲幸运5官方开奖结果ꦓ体彩ꦍ网:continuing care retirement community—if not right away, then in a few years.

This is both an emotional and a practical matter. On the emotional side, you and your kids may be attached to the old place and reluctant to part with it. On the practical side, one of them might🍌 have dreams of owning it themselves someday. Perhaps you even have an adult child who’s currently living with you. If nothing else, the kids may still be storing possessions in your home that they’ll need to move elsewhere.

Ultimately, of course, it’s your home and your decision. Your home may be the most valuable asset you possess, and you may need the equity you’ve built up in it over the years to fund a comfortable retirement for yourself. If you’re in the enviable—and unusual—position of not needing that equity, then 澳洲幸运5官方开奖结果体彩网:giving the home to a child can be an option. Bear in mind, however, that if they receive the home as a gift while you’re living, then they won’t benefit from the same 澳洲幸运5官方开奖结果体彩网:step-up in cost basis that they would if they inherited it after your death. As a consequence, they could face a big t🌠ax bill if they later sell the home. 

If you wish to, you can also sell your home to a child—although, if they pay less than the home’s market value, the difference is considered a 澳洲幸运5官方开奖结果体彩网:gift of equity.

Either giving the home away outright or selling it at a substantial discount can trigger 澳洲幸运5官方开奖结果体彩网:gift taxes—which you, not your child, would have to pay. However, in 2023, you’re allowed a lifetime limit of $12.92 million on gifts and inheritances combined (twice that for married couples), so you may be able to avoid gift taxes unless you plan to make other substantial gifts and leave a very large inheritance.

Your Debts

More and more Americans head into retirement these days with mortgage debt, 澳洲幸运5官方开奖结果体彩网:credit card debt, and even 澳洲幸运5官方开奖结果体彩网:student loan debt. It’s worth making your children aware of this debt, because unless you pay it off before you die, your estate will have to, reducing any 澳洲幸运5官方开奖结果体彩网:inheritance that they may be anticipating.  

If they inherit your home and you still have a mortgage on it, that mortgage may not be 澳洲幸运5官方开奖结果体彩网:assumable, so your heirs will have to pay it off, possibly by taking out a new loan on their own. Same for any ho꧅me equity loan or🅠 home equity line of credit (HELOC).

If you have a 澳洲幸运5官方开奖结果体彩网:reverse mortgage, your children will need to repay its balance if they wish to keep the home in the family. In fact, if you have to move out of the house for more than 12 months, such as to receive rehabilitative care after an injury, 澳洲幸运5官方开奖结果体彩网:the loan will come due.

Your Retirement Acco🐽unts and Other Financial Assets

Chances are that you’re counting on the money you saved and invested during your working years to supplement your 澳洲幸运5官方开奖结果体彩网:Social Security and pension income (if you’re lucky enough to have a 澳洲幸运5官方开奖结果体彩网:defined-benefit pension). In fact, the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) rules on 澳洲幸运5官方开奖结果体彩网:required minimum di♊stributions ⭕(RMDs) mean that you’ll have to withdraw a certain amount of money from your traditional (non-Roth) retirement accounts each year starting at age 73 whether you need to or not (the age was just raised from 72 with passage of the SECURE Act 2.0, part of the Consolidated Appropriations Act of 2023). (As of 2024, RMDs are no longer required for 澳洲幸运5官方开奖结果体彩网:Roth 401(k)s.) You’ll also have to pay 澳洲幸运5官方开奖结果体彩网:income tax on those withdrawals.

Just in case you’re incapacitated at some point or die suddenly, you may want to give your children a list of the financial institutions wh൩ere your money is held. That can save them a lot of detective work and reduce the possibility of any a🐠ccounts getting lost.  

You can leave whatever money remains in your 澳洲ꦚ幸运5官方开奖结果体彩网:individual retirement account (IRA) to your kids by 澳洲幸运5官方开奖结果体彩网:designating t☂hem as your beneficiaries with the financial institution that serves as the 澳洲幸运5官方开奖结果体彩网:account's custodian. Those designations take precedence over your will and can allow your heirs to receive the money before your will is probated. In addition, you might call your beneficiaries’ attention to the rules of 澳洲幸运5官方开奖结果体彩网:inherited IRAs, which also involve required minimum distributions, so they aren’t surprised when the time comes and don’t run afoul of the IRS. 

On a more delicate topic, you might also want to discuss how much o⛄f that money you ho🔥pe to leave them someday. Just insert one big caveat: If you live long enough, you could end up spending all or most of it.

Your Life Insurance

As with your investments, it’s wise to tell your children about any 澳洲幸运5官方开奖结果体彩网:insurance policies you have and where they are located. 澳洲幸运5官方开奖结果体彩网:Life insurance, like retirement accounts, becomes payable upon your death to the beneficiary or beneficiaries you’ve chosen. 💯It can, among other things, provide cash to cover funeral expenses or pay off outstanding medical bills. 

Your Healthcare Plans

You may enter retirement in tip-top shape, but somewhere down the line begin to face one or more serious health issues. ༒Having a child who can drive you to appointments, if necessary, or help you deal with all the paperwork can make life a lot easier.

At that point, if not sooner, you should brief them on the health coverage you have available to pay the bills. If you’re age 65 or older, that's probably Medicare.

As you likely know, but your kids may not, Medicare is the federal health insurance program for most Americans age 65 or older. You can choose an 澳洲幸运5官方开奖结果体彩网:original Medicare plan (Parts A and B) or a private 澳洲幸运5官方开奖结果体彩网:Medicare Advantage plan (Part C). In addition, you have the option to buy 澳洲幸运5官方开奖结果体彩网:Medicare drug coverage (Part D) or a 澳洲幸运5官方开奖结果体彩网:Medicare supplement plan (Medigap) to cover some of the costs that original Medicare does not.

It’s worth noting—and informing your kids—that while Medicare covers many things, it will pay for nursing home care or nonmedical home care only in extremely rare instances. A private 澳洲幸运5官方开奖结果体彩网:long-term care (LTC) policy, if you have one, may defray some or most of those costs. If you do have an LTC policy, also tell your kids where you keep it or make a copy for them. If you become disabled, they may have to file the papers that trigger LTC payments from the insurance company♊.

If you end up largely depleting your assets during your retirement years, you may become eligible for Medicaid, the federal and state health insurance program for low-income Americans. It provides more coverage for long-term care than Medicare does. Even without becoming impoverished, retirees can sometimes 澳洲幸运5官方开奖结果体彩网:make themselves Medicaid eligible by establishing trusts, strategically spending down their assets, making gifts, and other means. If you have any s♔uch plans in mind, let your kids know.

If You Become Incapacitated

At some point, you or your spouse might bec🅠ome physically⛄ or cognitively incapacitated.

As a precautionary measure, you could give one or more of your children the authority to make medical or financial decisions on your behalf, through a 澳洲幸运5官方开奖结果体彩网:power of attorney, 澳洲幸运5官方开奖结果体彩网:healthcare power of attorney,ಞ or similar legal documents. Because events can move quickly in these situations, it’s smart to prepare the papers—and your kids—well in advance.

Part of that is making sure that your kids understand your preferences: Would you be comfortable moving into an assisted living facility or a nursing home (and do you have a particular one picked out)? Or would you rather stay in your own home with the he🉐lp of an aide, if that’s possible? Depending on the severity of your condition, they may not be able to honor your wishes, but you will at least have made them known.

Your Will

If you don’t have a 澳洲幸运5官方开奖结果体彩网:last will and testament (and many Americans do not), you should make one. If y✅ou have a wilജl that was drafted years ago, it could be time to revisit and revise it.

You don’t have to share the contents of your will with your kids, but there are some good reasons why you might want to. One is if you’re splitting your estate unevenly. There’s nothing wrong with leaving your underpaid schoolteacher son a greater share than your set-for-life investment-banker daughter, but you’ll avoid hurt feelings if you explain yourself while you still can. Similarly, if you have a child who is unable to care for themself, you’ll want to make appropriate provisions for them and let their siblings know about it. If you’re making substantial 澳洲幸运5官方开奖结果体彩网:charitable bequests that would otherwise go to your kids, that’s alꦐs♏o worth discussing.

Finally, you’ll also🔯 do your kids a favor if you write out instructions about how you want your funeral, burial, or other final arrangements to be handled. Be sure to include information on whatever financial resources you may be providing to cover the costs.

Any Business That You Own 

If you have a business, you may intend to sell it🌳, either to fund your retirement or because none of your kids is interested in taking it over from you. Whatever you expect to do, you’ll want to discuss it with your children well beforehand and put a plan in place as soon as possible. Both selling a business and succession planning are complex topics beyond the scope of this article, but Investopedia has practical information and advice about them, including:

• 澳💝洲幸运5🎶官方开奖结果体彩网:7 Steps to Selling Your Small Business
• Succession Planning Basics: How It Works, Why It’s Imp♚ortant
• 澳洲幸运5官方开奖结果体彩网:How to Crꦯeate a Business Succession Plan

The Bottom Line

If you 澳洲幸运5官方开奖结果体彩网:plan to retire soon (or already have), consider briefing your children on your finances, including how you expect to pay for 澳洲幸运5官方开奖结果体彩网:costly healthcare should you need it. How much you divulge is up to you, but you can head off some unpleasant surprisꦐes, ill feelings, and sibling squabbles if your children at least have the big picture. You may also be helping them prepare for their💫 own retirement.