It's important to prepare a financial plan for each upcoming year.

October is Financial Planning Month, which is appropriate since the new year will soon be looming on the horizon, and being financially prepared to face another year always makes good sense. Your area home caregivers emphasize the importance of seniors and their loved ones being prepared for all the possibilities of the coming year because more often than not, life tends to deal out surprises when we don't take the time to prepare for them. Professional health care personnel in Stanwood and elsewhere urge you to give some thought to preparing or updating the five important documents identified below so that you don't get dealt an unpleasant setback in the new year.

Health Care Directives

If you don't have a legal document prepared which outlines your wishes regarding major health issues, you should have one prepared as soon as you can arrange it. If you were to become disabled and unable to express your health wishes, would family members know your feelings on the matter? Without any legally binding directive from you, medical personnel would be obliged to do everything possible to sustain life for as long as possible, regardless of your quality of life. When you have this document prepared, make sure someone in the family knows where it is, so it can easily be accessed and consulted.

Beneficiary designations

Probably one of the more important documents that you need to have updated and accessible is the paperwork identifying beneficiaries for your financial assets, including bank accounts, 401K, and any other assets of value that you own. If this document is not kept updated or is inaccessible for any reason, it's doubtful whether your actual wishes would get carried out, regarding the distribution of your assets. Make sure you include contingency plans, in the event that anyone listed as a beneficiary should pass prior to your own death. If this situation does occur, and is not accounted for on your beneficiary document, the courts might very well decide something that you did not intend and might disagree with.

Financial Plan

Your financial plan is one of the most difficult documents to accurately prepare and update because it's generally based on the amount of money you think you're going to need at retirement time. If you're already retired, you may have a pretty fair idea already of how much money you spend every month, and every year, but even that can be questionable. When you try to predict how much money you'll need for each year of your retirement, you'll probably be basing that on monthly bills and payments - but what about all the unexpected little expenses that can come up? 

The older you get, the likelier it is that you'll incur additional medical expenses, many of which you just won't be able to anticipate. Of course, some of these will be handled through Medicare, but then again, there's an awful lot that can slip through the Medicare cracks. When you are reviewing your planned expenses for the next 5, 10, or 15 years, you should build in a 'miscellaneous' factor which will cover all those unexpected expenses that you can't possibly predict ahead of time.

Assets inventory

You may have acquired several assets since the last time you updated your Inventory List, or you may have lost some, but in any case now is a good time to update that list to make it is as accurate as possible. Don't overlook the less obvious things like insurance policies, bonds, stocks, CD's, jewelry, coins, and possibly antiques of value. Any caretakers or overseers for these assets or accounts should be clearly identified, and their contact information should be listed right alongside the assets.

It's a good idea to also list any 'negative assets', i.e. debts which you are responsible for, and which could be legally passed on to your heirs - you won't want to leave a nasty surprise for them at your passing. Make sure one or more people whom you are close to, know where your Assets Inventory is kept, and be sure to update it at least annually, if not more often.

Milestones calendar

Almost everyone has at least a few important milestones on their calendar every year, and these should be written down ahead of time, so you don't forget them. For instance, you may have children or grandchildren who reach the age of 21 in the coming year, and that will entitle them to full control over any accounts which have been put under their names. If you will reach the age of at least 59-1/2 yourself this year, you would be entitled to take distributions from your IRA account, without incurring any penalties.

If you or your spouse will reach the age of 62 in the coming year, some decisions must be made about Social Security, and if 65 is the magic number for one or both of you, it will be time to review and understand the whole Medicare picture. Minimum distributions must be taken from your IRA account if you will attain the age of 70-1/2 sometime during the upcoming year. Any other dates important to your financial status should also be listed on this milestones calendar, so you don't forget about them, and cause yourself some problems.