Financial Wellness Checklist

2 minute read

“Whealth” Risks of Aging

As we age, the physical, behavioral, and cognitive threats to our financial well-being increase. Poor physical health, memory loss, cognitive decline, overconfidence, and loneliness, among other factors, can all contribute to poor financial decision-making. In fact, a major study showed that the peak age of financial decision making is 53, well below the average retiree’s age of 62 (2009 Brookings Papers-The Age of Reason). These growing threats to our financial wellness are especially risky in retirement because most people have to generate income from their own savings and investments.

Baby boomers, the wealthiest and healthiest generation in U.S. history, are living longer than any prior generation. Numerous studies over the years – including the Alliance’s Protected Lifetime Income Study – show that running out of money in retirement is one of the top fears retirees have. It’s important to remember that your life expectancy is the foundation of your financial planning.

A Financial Wellness Score

These health issues, combined with the ongoing challenge of solving for income your clients cannot outlive, create both challenges and opportunities for the financial services industry. The Alliance For Lifetime Income’s Financial Wellness Score is a great way to help your clients get a clearer picture of their financial wellbeing. It can help identify physical, mental, and behavioral threats to their retirement security, and provide personalized recommendations to help them more effectively protect themselves.

Discussing the following topics can help ensure that your clients are prepared to face their later years of life with financial security:

• Do you have trusted family members or friends who can help you make safe financial decisions?
• Have you drafted a Durable Power of Attorney?
• Do you have a will? A trust?
• Have you drafted a Health Care Proxy and a Living Will?
• Does your family have contact information regarding your professional resources, including medical specialist(s), caregiver(s), attorney(s), and accountant(s)?
• Have you researched continuing care facilities in your area?
• Do you have long term care insurance?
• Do you have a credit card and financial accounts monitoring service?
• Have you set up an automatic bill pay service?
• Does your family know your critical passwords?
• Have you done a credit freeze?
• Do you have an investment policy statement (IPS)?
• Have you reviewed/updated your beneficiary information for your insurance policies, retirement accounts, etc.?
• Does your family know where all of your legal and financial documents are?
• Do you have co-signatories on your financial accounts: banking, investments, insurance?
• Have you made plans to donate to your favorite charities?
• Have you made necessary renovations to your home to make it possible to age in place?