Advisor answers readers’ questions regarding saving for the golden years
Published in the June 25-July 8, 2014 issue of Morgan Hill Life
Marisa Otto
By Marisa Otto
Edward Jones financial advisor Marisa Otto answers readers’ questions.
My husband and I are retiring in a few years and would like to know how to prepare for health care costs in retirement?
In preparing for retirement, many of us overlook health care costs, possibly because we think Medicare will pay for everything. But that’s not the case. In fact, you could eventually face major health care-related expenses. How can you cope with these costs?
For starters, identify the age at which you plan to retire and estimate your out-of- pocket costs for health care. Then, as you near retirement, review your insurance options.
Also, develop a strategy to protect yourself against long-term care costs, such as an extended stay in a nursing home.
These costs can be extremely high, so consult with your financial advisor about your options.
Finally, health care costs typically rise as you move further into retirement. So you’ll need to allocate a reasonable portion of your assets to investments with potential for both growth and rising income.
Preparing for health care costs can help you avoid unhealthy surprises when you reach retirement. So start thinking about what moves you may need to make.
What should you do with an inheritance?
You can’t plan on it. But if you do get one, make the most of it.
Once you get word of an inheritance, don’t rush to act, especially if you’re in the middle of a grieving process. Consider “parking” your inheritance temporarily in a liquid vehicle, such as a cash account.
After some time has passed, you could use your inheritance to pay off some debts. Or you might want to set up an emergency fund containing three to six months’ worth of living expenses. And if your inheritance is large enough, you can invest it to help meet an important financial goal, such as helping your children pay for college or building resources for your retirement.
You may only get one inheritance in your life — so put it to good use.
My fiance and I are getting married soon and I’d like to get advice on how to handle our finances as a newly married couple.
June is a popular month for weddings. If you’re getting married this month, you have many exciting details to discuss with your spouse-to-be. But you’ll soon want to have another discussion — about your finances.
For starters, decide how you’ll handle your money. Will you have joint or separate checking and savings accounts? There’s no one right answer, but you should both know where your money is kept. Also, review your debt situation. If you have student loans or credit card balances, create a plan to lower this debt load so you’ll have more money to invest.
Speaking of investing, you’ll need to build an investment strategy to help you achieve your joint objectives, such as a comfortable retirement. And if you have different investment styles — that is, if one of you is an aggressive investor while the other is conservative — you’ll need to find common ground so that you make decisions that benefit both of you.
By communicating regularly and working together, you and your spouse can build a solid financial foundation for your lives together.
This column was written by Edward Jones for use by local Edward Jones Financial Advisor Marisa Otto CFP@, who has been a financial advisor with Edward Jones in Morgan Hill for more than 11 years. Her office is at 275 Tennant Ave. Ste. 206A. She is available for consultation. Email: [email protected], phone: (408) 778-4400.
