Plan for the Future

Go to Planning Checklist

Go to Timeline to Retirement

Printer Friendly – Planning Checklist

Are you prepared…

• for an injury that would leave you incapacitated and unable to work?
  • who would care for the people who are dependent on you?
  • who would manage your finances and your care?
• for a long-term illness
• for retirement?
• for death?

Find out how well-prepared you are…

Here’s a checklist of retirement planning tasks you can use to figure out how prepared you are for your future. If you need more information about one of the tasks in the checklist, click on the task.
 

Savings Options

Most financial advisors say you’ll need about 60 to 70 percent of your pre-retirement earnings to comfortably maintain your pre-retirement standard of living. According to the Social Security Administration, under current law, if you have average earnings, your Social Security retirement benefits will replace only about 40 percent. In order to live comfortably, you would need to supplement your benefits with a pension, savings or investments. 

A number of different savings options exist.  Each option has unique characteristics related to taxes, interest rates, penalties and savings opportunities.  It is best to consult with a financial expert who can help you figure out the best combination of savings options for your situation.

Savings accounts.  A savings account with a bank or financial institution pays periodic interest on balances held through the year. Some savings accounts pay higher rates of interest if a minimum deposit is maintained.  Most banks give access to savings accounts by Internet or telephone and allow transfers between savings and checking accounts.  Savings accounts generally pay lower interest rates than other investment options. 

Certificate of deposit (CD).  A CD is a type of savings account that earns a fixed interest rate over a specific period of time usually from 3 months to 5 years.  There is usually a penalty for early withdrawal.  The penalty is most often 90 to 180 days interest and the penalty can taken from the initial investment.  CD’s are unique to each bank and may have a variety of options associated with them including the ability to trade in a current CD for one at a higher interest rate or to cash a CD without penalty for nursing home payments.  CD’s often rollover into new CD’s if action is not taken within 10 days of the maturity.  Once the CD has rolled there may be new options associated with the CD and the penalty period starts over so it is best to check with a banker on each investment.  CD’s and savings accounts are covered by the Federal Deposit Insurance Corporation (FDIC) up to a specific balance.

Individual Retirement Account (IRA).  An IRA is a long-term investment account that is established with a bank, credit union, brokerage house or other financial institution that permits tax-free accumulation of its assets. An IRA may have both deductible and non-deductible contributions, in which earnings grow tax-deferred, but will be taxed as ordinary income on withdrawal. Taxes are paid, "deferred", at a later date.  When it comes time for you to withdraw the money for your retirement — after age 59 1/2 — then the withdrawal will be taxed as income at your ordinary income tax rate.  If you withdraw money from your IRA before you turn 59 1/2, you will most likely have to pay both income tax and a 10% penalty on the withdrawal; however, there are several exceptions.

Roth Individual Retirement Account (IRA).  The Roth IRA offers the opportunity for tax-free growth of investment earnings and allows a person to make tax-free withdrawals of the assets at retirement or earlier for special purposes.  The money a person places in the account has already been taxed; therefore, the money can be withdrawn tax free.  Contributions (money paid into the Roth IRA account) are not tax deductible. Many of the IRA rules also apply to Roth IRA’s so it is important to obtain good advice.

Mutual Funds.  Mutual funds are a pooling of many investors’ money for specific investment purposes. The fund is managed by a management company, which is responsible for adhering to the purpose of the fund. Some mutual funds charge fees when purchased or withdrawn – these are “front end load” or “rear end load” funds. Others charge no fees for purchase or withdrawals and are known as “no load funds.” All mutual funds charge a management fee and may have other fees associated with them.  Each fund must send a prospectus to the investor and information about fees is in the prospectus.  Each fund also sets an investment objective and then invests in a variety of stocks, bonds and other investments to meet the stated objective.  The value of a mutual fund changes on a daily basis.  Mutual fund shares are also subject to income and capital gains taxes unless held in a protected account like an IRA that is taxed only on withdrawals.

Bond.  A bond is a certificate representing creditorship; the issuer pays interest on specific dates and redeems by paying the principal at maturity.  Bonds can be issued by the federal government and its agencies and by cities, counties, special purpose authorities or other taxing authorities.  Bonds can also be issued by corporations for the purpose of raising money on a short or long term basis.  Short term bonds are usually less than 2 years, intermediate term bonds 2 to 7 or sometimes even 10 years and long term bonds over 10 years.  Some bonds are callable which means the issuer has the option on certain dates to pay back the principal and stop paying interest.  The principal value of a bond changes daily with interest rates but an investor will always receive the face value of the bond at the maturity date.  Many bonds are rated by a nationally recognized service.  The highest rating is AAA or Aaa, then AA, A, and BAA or Baa.  Baa is the lowest rated bond allowed in a bank portfolio and many people consider that a good rule of thumb for personal investments.  Some bonds have tax advantages and are not really suitable for IRA accounts. 

Stocks.  Stocks are a security that represents ownership in a corporation and is issued in "shares". Many stocks pay dividends on a quarterly basis but are not required to and they may skip, raise or lower a dividend.  Stocks are traded on exchanges and are usually purchased through a broker or directly from the issuing corporation.  Stocks can be among the most volatile of all investments yet, used appropriately can be extremely effective in protecting savings against rising inflation. 

Asset Allocation.  Asset allocation is a process by which an investor determines how much of the total amount available for investments should be allocated to each type of investment.  Factors which influence the asset allocation for an individual are generally risk tolerance and time frame – when the money will be needed.  A trusted advisor can assist with determining asset allocation and reviewing it as circumstances change.  It has been proven over and over that investors who have a well thought out plan and adhere to it have far greater returns than those who invest in a random way.

The following Web sites can provide additional information on savings options:

• Financial Facts Tool Kit – Produced by the Securities and Exchange Commission to better inform consumers about saving and investing. Tips are included on planning for retirement, advice on investing, guides to mutual funds, market risks, corporate and municipal bonds, and workbooks such as "Get the Facts: The SEC’s roadmap to Saving and Investing."
   
• MyMoney.gov – The Federal Government’s Web site dedicated to helping Americans understand more about their money – how to save it, invest it, and manage it to meet your personal goals. http://www.mymoney.gov/
   
• Plan Your Retirement – Another online resource from the Social Security Administration is Plan Your Retirement, which will help you find information on your retirement age and deciding when to retire.  http://www.ssa.gov/r&m1.htm
   
• Social Security Administration Calculators – The Social Security Administration has made available a number of web-based calculators that will help you estimate your potential benefit amounts using different retirement dates and different levels of potential future earnings. 
  http://www.ssa.gov/planners/calculators.htm
   
• Ballpark E$timate – How much will you need to save to retire in comfort?  The Ballpark E$timate worksheet made available by the American Savings Education Council can help you figure that out. Ballpark E$timate http://www.asec.org/ballpark/

Back to Top

Options Counselor

Do you have someone you trust who can help you sort out your options? Professionals such as elder law attorneys, financial planners, investment advisors, life coaches, or insurance agents may be in a position to help you sort out your long-term financial options. 
 

The Minnesota Department of Commerce has put together some basic information about Securities Agents, Financial Planners and Investment Advisers.  These tips should help you pick the type of options counselor or professional to meet your needs.

Financial Planner

BEWARE!! Anyone can call themselves a Financial Planner. Minnesota currently does not license or regulate Financial Planners. However, if a Financial Planner provides specific investment recommendations for a fee, they may be required to be registered by the Department of Commerce as an Investment Adviser. Financial Planners may also be licensed as securities and/or insurance agents. Financial Planners generally coordinate and monitor your investment concerns and they may work with specialists in various fields.  Don’t hesitate to ask for credentials and references when deciding about entering into a relationship with a financial planner.

Investment Adviser

An Investment Adviser makes specific investment recommendations based on your needs and circumstances. They may simply give you advice that you can implement on your own or they may hold your funds in an account managed by the adviser. The Investment Adviser is paid a fee for the service they provide or may charge a percentage of the market value of the securities in your portfolio. Investment Advisers are federally licensed by the Securities and Exchange Commission. In addition, the Minnesota Department of Commerce approves licenses for Investment Advisers for business conducted in the state.

Securities Agent

A Securities Agent represents a securities broker/dealer. They make recommendations and sell various securities for which they are paid a commission. You do not "hire" a Securities Agent. The agent is required to make suitable recommendations based on your objectives and needs. The final responsibility for any securities purchase remains with the consumer. The exception is if the client gives written authority to the agent to manage their account. Securities Agents and Broker/Dealers are licensed by the National Association of Securities Dealers and licenses are approved by the Minnesota Department of Commerce.

Selecting someone to manage your money

Selecting a financial planner is a decision that deserves careful thought and attention. It’s your right and responsibility to investigate their background, credentials, and how they operate.

One way to obtain information about your Financial Planner is to call the Department of Commerce. If they are licensed as an Investment Adviser, insurance, real estate, or securities agent, you will be able to learn if any disciplinary action has been taken against them, their firm, and whether they are properly licensed. An industry organization, such as the Institute for Financial Planners, may provide more information.

Questions you should ask an adviser:

Before entering into an agreement or deciding to invest your money, make sure you have answers to some important questions. Call the adviser and schedule an initial consultation. Ask if they will be charging a fee for the first meeting. Then follow up with these questions:

• Will the person you are meeting with be your adviser or will they be supervising others that will manage your account?
• Are the recommendations based on your individual situation? Ask to see a sample of a written plan that you will receive.
• Does the adviser receive a commission or have a vested interest in the products they provide?
• Can the plan be implemented with products and services that are not provided by the adviser?
• Is the adviser easy to reach and do they return phone calls promptly?
• How will the adviser keep you informed about your account and other information you want?
• How many accounts does this adviser service?
• How often will there be a review of your situation and how much will it cost?
• Has the adviser been the subject of civil litigation or regulatory action?
• How long and under what name have they been engaged in financial planning?
• Ask for client references.

Services that should be offered by an Investment Adviser:

• A clearly written and individualized financial plan. This should include a list of your own objectives and financial needs. This should also tell you the cost to implement the plan.
• A discussion about risk. That is, how much are you willing to tolerate? You should understand the risks and benefits of each investment option and know what the "worst case" would be for each.
• Specific suggestions for improving your personal cash management.
• An explanation for the basis of your plan. This should include potential changes in interest rates and inflation.
• A range of investment options with the pros and cons for each. You should have several alternatives.
• Additional advice, if needed, from other professionals. This might include lawyers, accountants or stockbrokers.
• A discussion of how the recommendations are suited to you. They should address your goals and objectives. You should also know the liquidity and risk involved and if the recommendations provide you with enough diversification.
• A specific schedule for monitoring your plan. You have a reasonable expectation to receive regular written and verbal updates. You should also have written documentation of where your money is invested.

Avoid abuses in Financial Planning:

The best defense against abuse in financial planning is knowledge. Consumers who most often become victims say they came to an adviser with no understanding of investing or financial matters. They were unaware there was a problem until it was too late. Here are some things you can do:

• Make sure the adviser understands your financial needs, your tolerance for risk, and your goals. Don’t enter into an agreement with an adviser without this information. The agreement should be in writing, signed by you and the adviser. If you believe the recommendations you receive are inappropriate, get a second opinion.
• Inform your adviser of any changes in your financial picture as soon as possible.
• Read your statements carefully. If there is something you don’t understand call your adviser.
• If there appears to be a problem with your adviser or securities agent, contact the compliance officer or branch manager of the company where they are employed. Follow your phone call with a letter and keep a copy for your records. If they can not or will not address your concerns, call the Minnesota Department of Commerce or the Securities and Exchange Commission.

More Consumer Information and Services are available from the Minnesota Department of Commerce.

Back to Top

Health Care Directive

Minnesota Law

Minnesota law allows you to inform others of your health care wishes. You have the right to state your wishes or appoint an agent in writing so that others will know what you want if you can’t tell them because of illness or injury. The information that follows tells about health care directives and how to prepare them. It does not give every detail of the law.
 

What is a Health Care Directive?

A health care directive is a written document that informs others of your wishes about your health care decisions. It allows you to name a person ("agent") to decide for you if you are unable to decide. It also allows you to name an agent if you want someone else to decide for you. You must be at least 18 years old to make a health care directive.
 

Why Have a Health Care Directive?

A health care directive is important if your attending physician determines you can’t communicate your health care choices (because of physical or mental incapacity). It is also important if you wish to have someone else make your health care decisions. In some circumstances, your directive may state that you want someone other than an attending physician to decide when you cannot make your own decisions.
 

Must I Have a Health Care Directive?   What Happens if I Don’t Have One?

You don’t have to have a health care directive. But, writing one helps to make sure your wishes are followed.
 

You will still receive medical treatment if you don’t have a written directive. Health care providers will listen to what people close to you say about your treatment preferences, but the best way to be sure your wishes are followed is to have a health care directive.
 

How Do I Make a Health Care Directive?

There are forms for health care directives. You don’t have to use a form, but your health care directive must meet the following requirements to be legal:

• Be in writing and dated.

• State your name.

• Be signed by you or someone you authorize to sign for you, when you can understand and communicate your health care wishes.

• Have your signature verified by a notary public or two witnesses.

• Include the appointment of an agent to make health care decisions for you and/or instructions about the health care choices you wish to make.

Before you prepare or revise your directive, you should discuss your health care wishes with your doctor or other health care provider.
 

I Prepared My Directive in Another State.   Is It Still Good?

Health care directives prepared in other states are legal if they meet the requirements of the other state’s laws or the Minnesota requirements. But requests for assisted suicide will not be followed.
 

What Can I Put in a Health Care Directive?

You have many choices of what to put in your health care directive. For example, you may include:

• The person you trust as your agent to make health care decisions for you. You can name alternative agents in case the first agent is unavailable, or joint agents.

• Your goals, values and preferences about health care.

• The types of medical treatment you would want (or not want).

• How you want your agent or agents to decide.

• Where you want to receive care.

• Instructions about artificial nutrition and hydration.

• Mental health treatments that use electroshock therapy or neuroleptic medications.

• Instructions if you are pregnant.

• Donation of organs, tissues and eyes.

• Funeral arrangements.

• Who you would like as your guardian or conservator if there is a court action.

You may be as specific or as general as you wish. You can choose which issues or treatments to deal with in your health care directive.
 

Are There Any Limits to What I Can Put in My Health Care Directive?

There are some limits about what you can put in your health care directive. For instance:

• Your agent must be at least 18 years of age.

• Your agent cannot be your health care provider, unless the health care provider is a family member or you give reasons for the naming of the agent in your directive.

• You cannot request health care treatment that is outside of reasonable medical practice.

• You cannot request assisted suicide.

How Long Does a Health Care Directive Last?   Can I Change It?

Your health care directive lasts until you change or cancel it. As long as the changes meet the health care directive requirements listed above, you may cancel your directive by any of the following:

• A written statement saying you want to cancel it.

• Destroying it.

• Telling at least two other people you want to cancel it.

• Writing a new health care directive.

What If My Health Care Provider Refuses to Follow My Health Care Directive?

Your health care provider generally will follow your health care directive, or any instructions from your agent, as long as the health care follows reasonable medical practice. But, you or your agent cannot request treatment that will not help you or which the provider cannot provide. If the provider cannot follow your agent’s directions about life-sustaining treatment, the provider must inform the agent. The provider must also document the notice in your medical record. The provider must allow the agency to arrange to transfer you to another provider who will follow the agent’s directions.
 

What If I’ve Already Prepared a Health Care Document?   Is It Still Good?

Before August 1, 1998, Minnesota law provided for several other types of directives, including living wills, durable health care powers of attorney and mental health declarations.

The law changed so people can use one form for all their health care instructions.

Forms created before August 1, 1998, are still legal if they followed the law in effect when written. They are also legal if they meet the requirements of the new law (described above). You may want to review any existing documents to make sure they say what you want and meet all requirements.
 

What Should I Do With My Health Care Directive After I Have Signed It?

You should inform others of your health care directive and give people copies of it. You may wish to inform family members, your health care agent or agents, and your health care providers that you have a health care directive. You should give them a copy. It’s a good idea to review and update your directive as your needs change. Keep it in a safe place where it is easily found.
 

How To Obtain Additional Information

If you want more information about health care directives, please contact your health care provider, your attorney, or the Minnesota Board on Aging’s Senior LinkAge Line®
1-800-333-2433.

A suggested health care directive form is available from the Minnesota Board on Aging.

The user-friendly Five Wishes document helps you express how you want to be treated if you are seriously ill and unable to speak for yourself.  It is unique among all other living will and health agent forms because it looks to all of a person’s needs: medical, personal, emotional and spiritual.  Five Wishes also encourages discussing your wishes with your family and physician.  Five Wishes meets the legal requirements of Minnesota.  Read more about Five Wishes.

Back to Top

Will

Wills are important documents that help ease the transition of ownership of an estate and decisions regarding personal effects after a person’s death. An estate consists of bank accounts, houses, land, furniture, automobiles, stocks, bonds, life insurance policies, retirement funds, pensions and death benefits. Your will should ensure that your assets are distributed as you wish. And, you still have full use of your property while you are alive.

In Minnesota, you must be at least 18 years old and of sound mind to make a will. The will must be in writing and must be witnessed by at least two people, both of whom must also sign the will. You must intend for the document to operate as a will. The will must be signed by you, or by another person at your direction in your presence. Handwritten wills are recognized as valid in Minnesota only if the will is witnessed and signed by two people. Notarization by itself is insufficient to make a handwritten will legally binding.
 

Your will should clearly state who will get your property upon your death. Minnesota law provides that a spouse inherits a specified amount of property, even if she or he is left out of the will. You may, however, disinherit a child, if your will clearly states that you do not wish the child to get anything. A personal representative (also known as an executor or administrator) should be named in the will. This person will be responsible for seeing that the property is distributed as you desire.
 

Wills can be changed by writing a new one, or by adding a "codicil," which is an addition to a will. Wills cannot be changed by simply crossing out language or writing in new provisions. Such alterations will not be effective. The codicil must be written, signed and witnessed the same way as the will, and should be attached to the will.
 

If a will specifically states that personal property should be distributed by a separate document, it is all right for a person to distribute most personal property in a handwritten statement. The statement can be written after the will is signed, and it can be changed without revising the will itself. A will is effective until it is changed or revoked.

It is a good idea to periodically review your will. Changes in your family, the value and kind of property, tax laws, or a move to another state may make changes in the will advisable. You may revoke your will; however, revocation must be done in strict compliance with the law and the assistance of an attorney is highly recommended. A surviving spouse who is not satisfied with his or her share in the will may elect to waive rights under the will and take his or her share according to state law. (A surviving spouse should seek legal counsel to do this.)

Your will should be kept in a safe place. The original will should be placed where it can easily be found after your death. In Minnesota, the Probate Court or Court Administrator’s Office will accept wills for safekeeping at no charge or for a nominal fee. You have the right to get your will back at any time. Putting a will in a safe deposit box might make it inaccessible after your death until probate begins, unless you are survived by a person who jointly owns the box and would have access to the box after your death.

If you do not have a will, your estate will be distributed according to Minnesota’s law of intestate succession. This law generally provides that, without a will, your estate will pass to your spouse, if still alive. If your spouse is not alive, your estate will pass to your children in equal shares.

You should consult an attorney to determine exactly how your estate will be divided if you do not have a will. As for all legal documents, it’s best to consult with an elder law attorney. Elder Law Locator from the National Academy of Elder Law Attorneys™ may be a helpful resource.

 

Back to Top

Employer-sponsored Benefits

Your employer may provide benefits to you, which may include: health insurance, pensions, and other types of benefits. Employers may pay for all or just a portion of the premium or costs of the benefits. In some cases, the programs may be sponsored by the employer but not paid for fully by the employer.  In planning for your future, it’s important to understand the benefits provided to you and/or your family by your employer.

Information about your rights related to these benefits is available from the U.S. Department of Labor.

The types of benefits provided by employers may include:

Health Insurance.   Health insurance is usually provided though a person’s employer or the employer of a family member.  Health insurance can include either employer-purchased or self insured.  The employee will likely share in the costs through co-pays, regular premiums and annual deductibles and benefit caps.  The U.S. Department of Labor has a series of E-Advisors that can assist in answering questions around a variety of topics including health care benefits.

Long Term Disability Insurance.  In the event a person becomes injured or sick and is unable to work, long term disability insurance provides for a regular steady income that may or may not be sufficient for the person’s living needs.  The Federal Citizen Information Center in Pueblo, Colorado has created “Long Term Disability Income Insurance: Financial Protection for You & Your Family”.  The guide contains tips and a buying checklist.

Dental Insurance.   Dental insurance provides employees with insurance coverage for insuring dental health.  Dental insurance usually falls into four types of service: preventive maintenance, basic dentistry, major dentistry and orthodontics.  It can also include cost sharing in the form of co-pays, deductibles, and annual benefit caps. The American Dental Association has more information on these types of insurances. 

Life Insurance.    Life insurance provides an individual’s immediate family with funds to assist in financial impact of death.  The two types provided are permanent and term.  Permanent policies are for the life of the policy holder and may attain a cash value.  Term life policies are for a specific time period.  Life insurance options are available from the National Association of Insurance Commissioners.

Retirement Plans.    There are many different types of retirement plans.  Its important to understand what your employer offers so that you can take full advantage of these options.  The employer will deducts an amount from your earnings and may also contribute employer matching funds to a qualified retirement plan or deferred compensation plan, to be distributed to you at a later date, usually when you retire.  If your employer provides a defined benefit pension plan, you will receive a benefit payment, at retirement on a monthly basis and there may even be survivor benefits paid to your survivors at the time of your death.  More information about these benefits are available from the U.S. Department of Labor.

Section 125 Cafeteria Plans.  These types of plans allow you to use pre-tax dollars to pay for anything from health insurance premiums to dependent day care costs on a pre-tax basis.

Vision Care Programs.   Generally covers eyeglasses, lenses and frames.  Co-pays and annual deductibles along with benefit caps may apply.

Long-Term Care Insurance.   Assists in covering the costs associated with long-term care for elderly.  MN Department of Commerce, What You Need to Know

Back to Top

Long-Term Care Insurance

 
Long-Term Care Insurance (LTCI)

LTCI is private insurance that is purchased before long-term care is needed. When care is needed, the insurance policy will pay costs as outlined in the policy. Policies can be individual or group-based; group LTCI is usually available through an employer or a type of association. Some of the features/benefits that can be purchased in a policy include:

• How benefits are paid – pooled or joint policies

• What services are covered and not covered

• How much coverage is purchased

• When benefits are paid (what triggers eligibility for benefits)

• Inflation protection or none

• Nonforfeiture of benefits

Tips on Buying Long-Term Care Insurance

• Ask for outlines of coverage so you can compare the features of several policies.

• Make sure you fully understand what the policy covers.

• Check that the company is licensed in your state. You can do this through the Minnesota Department of Commerce.

• Always answer questions about your medical history and health carefully and truthfully.

• Be sure your application has been filled out accurately. Promptly notify your agent or company of errors or missing information.

• When you purchase a policy, make your check payable to the insurance company, not the agent. Be sure to get a receipt.

• Always check the date the insurance becomes effective.

• After you have purchased an insurance policy, you have a "free-look" period that lasts 30 days after you receive the policy when you can change your mind. During that period, read your policy carefully. If you decide not to keep it, the company will cancel the policy and give you an appropriate refund.

• Consider having the premium automatically taken out of your bank account, so you won’t lose your coverage if an illness or accident prevents you from paying your premium.

• If you have a complaint about your insurance agent or company, contact the customer services division of your insurance company. If you are still dissatisfied, contact  the Minnesota Department of Commerce.

More Long-Term Care Insurance Tips

• MN Department of Commerce, Shopping for long-term care insurance

• MN Department of Commerce, What You Need to Know: Long Term Care Insurance

• Minnesota Attorney General’s Office, Long-Term Care Insurance

The Financing Long Term Care: A Resource Center for Families, from the University of Minnesota Extension Service, is an excellent resource for learning more about long-term care financing options.  The site contains basic information about long-term care planning, talking about and making decisions around long-term care, and there’s information addressing some common myths about long-term care.

In Minnesota, the Senior LinkAge Line® at 1-800-333-2433 is the State Health Insurance Assistance Program (SHIP).  Specialists are available to help you compare Long-term Care Insurance policies.
 

Back to Top

Medicare options

Medicare is a federal health insurance program for:

• People age 65 and older

• Some people under age 65 with disabilities

• People with End-Stage Renal Disease  , and

• People with Amyotrophic Lateral Sclerosis (Lou Gehrig’s disease)

There are four parts to the Medicare Program:

Part A: covers hospital stays, limited nursing home stays, home health care, hospice care and blood

Part B: covers physician, lab, home health care, outpatient hospital services, some preventive services and blood

Part C: Medicare Advantage, previously known as Medicare + Choice

Part D: the new Prescription Drug benefit to begin on 1/1/06

Medicare was not designed to cover all medical costs. There are gaps in coverage. Purchasing a Medicare supplemental or a managed care plan can help take care of some of these gaps. 

Medicare is complex, but there is free help available. In Minnesota, the Senior LinkAge Line® at 1-800-333-2433 is the State Health Insurance Assistance Program (SHIP) which helps people with Medicare. There are Medicare specialists available to help you over the phone or in person with your Medicare related questions and problems, no matter how complex.

More information is available from the Minnesota Board on Aging and Medicare.

Back to Top

Housing Options

Where do you want to live when you retire?  Most older adults want to live in their home.  Some older adults want to downsize and get rid of the responsibilities of keeping up a large home and yard.  More and more older adults are staying in their home even when they need help with daily tasks and having family, friends or neighbors stop in to help them with such things as meal preparation and grocery shopping, getting around town, housecleaning, laundry, setting up medications, etc.  Some older adults have volunteers to help them with these type of activities and some people pay agencies to provide these types of services in the home. 

The Housing Resources ToolBox website, sponsored by the Minnesota Department of Human Services, offers information on housing options in Minnesota, services to help keep you in your home, and affordable housing programs.  Housing Resources ToolBox

Back to Top

Community Activities

Being active means more than just exercise — it includes being involved in the community by volunteering or working a part-time job.  Volunteering or working allows you to stay connected, involved, and engaged. There are a wide range of opportunities where your skills, experience and training can be put to good use. You can work or volunteer with older adults who need help, children, teenagers, vulnerable adults, refugees, or many others! People like you are needed for things like helping seniors complete their tax returns, learn defensive driving techniques, and apply for public benefits for which they qualify. Some people help youth read, work on school activities, referee sports, host exchange students, and a lot more! Contributing to the community can be very rewarding and contributes to the overall quality of life in your community! 

Look for opportunities to help others within your neighborhood or at your community center, at local schools or in faith communities, with professional associations, boys and girls clubs, and so many more…

Look for volunteer listings from these online sources:

• Mentoring Partnership of Minnesota
   

• Senior Corps
   

• Volunteer Resource Center 
   

• Volunteers of America Minnesota

Back to Top

Healthy Lifestyle

An active and healthy lifestyle are an important part of staying young and living independently.  Exercise is an important activity for older adults and one that is vital for staying independent in the community.  Research shows that people who stay physically and mentally active can improve their quality of life and help fight diseases, such as osteoporosis, heart disease and depression.    Exercise and physical activity are among the healthiest things you can do for yourself.

An inactive lifestyle can cause older people to lose ground in four areas that are important for staying healthy and independent: strength, balance, flexibility, and endurance. Exercise and physical activity can help older people maintain or partly restore these four areas.

Increasing strength and endurance make it easier to climb stairs and carry groceries. Improving balance helps prevent falls. Being more flexible may speed recovery from injuries. If you make exercise a regular part of your daily routine, it will have a positive impact on your quality of life as you get older.

Being active is one piece of a healthy lifestyle.  Enjoying retirement and playing a vital role in the community are also important activities.  In addition, leisure activities and educational opportunities enhance retirement and provide mental stimulation. Many local community education programs offer classes in arts and crafts, home repair, or learning a new language. There are groups that plan travel and adventure opportunities for older adults, as well as groups aimed at sharing a wide variety of interests including pets, cooking, grandparenting, movies and books, games and puzzles, and veterans activities.  All these leisure opportunities contribute to an active, healthy lifestyle!

Here are some key points to maintaining a healthy lifestyle:

• Maintain an appropriate weight.
• Maintain a healthy, balanced diet, and eat five or more fruits and vegetables daily.
  • Drink three cups of milk or the equivalent in low-fat yogurt or cheese
  • Eat three servings daily of foods rich in whole grains
  • Eat two to three servings of lean protein daily
  • Drink plenty of water to keep the body hydrated
  • Limit sugar and salt intake
• Stay physically active by exercising at least 30 minutes daily.
• Get regular physicals, health screenings and immunizations.
• Avoid using tobacco products.
• Drink alcohol in moderation or not at all.
• Wash your hands often with soap and water.
• Engage in social activity to stay mentally healthy and decrease stress.

Check out these online resources to learn more about developing and maintaining a healthy lifestyle:

• Elderhostel, University of Minnesota, Twin Cities  
   

• Explore Minnesota
   

• HealthierUS.gov
   

• Recreation.gov
   

• Vital Aging Network 

Back to Top

Trust

Trusts are created for many reasons, including to avoid probate (a court deciding the settlement of a deceased’s estate), to help care for a dependent family member, and to assist in estate and tax planning.

There are several types of trusts available, including a living trust. A living trust can be revocable (can be changed or canceled) or irrevocable (cannot be changed or canceled). Trusts can be an important tool, especially in the case of a dependent or disabled child or adult.  These special needs or supplemental needs trusts help deal with serious and significant financial implications regarding tax liabilities and eligibility for public assistance programs that may be necessary to protect the health and safety of the dependent.

A trust manages the distribution of your assets. A trust is created by the transfer of property by the owner, or "grantor," to another person, the "trustee." The trustee holds the title to the property and manages the property for the benefit of a third party, the "beneficiary." There are two general types of trusts. The "living" trust is created during the lifetime of the grantor when all or part of the grantor’s property is transferred into the trust. The other type of trust is called a "testamentary" trust. In a testamentary trust, the property is transferred into the trust after the grantor dies.
 

There are potential drawbacks to a living trust. For example, transferring property into a living trust can make you ineligible for Medical Assistance. Talk to your lawyer about that possibility. Also, if the grantor is also the trustee, the grantor has a fiduciary obligation to the beneficiaries for both present and future income. This, for many, may be the biggest drawback of a living trust.
 

There are also good reasons to consider a living trust. A living trust, unlike a will, enables you to have a trustee with financial expertise manage your assets during your lifetime. A living trust can allow for a smooth transition of property if you become incapacitated or incompetent. A living trust can also protect your privacy regarding the distribution of your assets.

With a will, the probate laws require that an inventory of the estate’s assets is filed with the court. The inventory is public information. With a living trust, generally only the beneficiaries of the trust will be informed of the nature and the value of the assets. In cases where there is both a will and a living trust, this privacy may be lost.
 

A living trust is legal in Minnesota if properly written. It is important that a living trust be written to reflect the individual characteristics of each person’s estate while complying with Minnesota law. How a particular trust is drawn up depends on the type of property being placed in the trust and the purposes for which the trust is formed. It is good to have your attorney evaluate the use and legality of a living trust in the context of your other estate planning documents and objectives.
 

If the living trust contains all your property, a will may be unnecessary and you can avoid probate. If the trust contains only part of your property, you need a will. If you want your property to go into the trust after your death, your will should include a "pour-over" provision to put the remaining property into the trust upon your death. Also, a will can be used to distribute personal belongings, identify guardians for your children, and provide for an executor to handle any unfinished business.
 

Minnesota does not have an inheritance tax but there may be an estate tax on estates of a little less than 1 million dollars (M.S. 291.01 and M.S. 291.03).  This is a complicated piece of legislation and for estates of this size an experienced attorney should be consulted. Federal law requires that an individual with an estate totaling more than $1.5 million file an estate tax return. If your estate is less than $600,000, there will not be any inheritance tax owed on your estate whether it transfers through the probate courts or in a trust.
 

Prepared forms or "kits" used to establish living trusts are currently marketed through magazines, brochures and door-to-door salespeople. Although the forms themselves may not be illegal, they may be too generic to suit you and your situation.

As for all legal documents, it’s best to consult with an elder law attorney.  Elder Law Locator from the National Academy of Elder Law Attorneys™ may be a helpful resource in searching for a competent attorney experienced in these matters.
 

Back to Top

Guardian/Conservator

Under Minnesota law, guardianship and conservatorship are very similar, but guardianship may limit more of your civil rights, such as the right to vote. Because it is less restrictive, conservatorship is usually favored over guardianship. The protected person in this relationship is called the "conservatee," and the person named by the court to make decisions is called the "conservator." Under guardianship, the protected person is the "ward," while the person named by the court is the "guardian."

If you should become incapacitated and have not previously planned for incapacity, a guardianship or conservatorship may be the only way to handle your personal affairs. Anyone can petition for or be appointed to be your guardian or conservator. A person may be appointed even against your wishes if the court determines such appointment is in your best interests. By planning ahead, however, you can have a say in this process and consequently protect your independence.

Family members and interested parties may petition the court to become either a guardian or conservator. An example of this could be when an aging parent becomes unable to take care of him/herself (feeding, bathing, etc.). Concerned family members can petition the court to seek legal status to either become their parent’s legal guardian, conservator or both.

A guardian is appointed to make health care and personal decisions for a person who is incapacitated through a physical or mental disability. A guardian could have the legal right to decide where this person will live and the medical treatment he receives. In some instances, a guardian may be given authority, by the courts, to oversee financial matters. Additionally, the courts could limit the scope of the guardian’s authority, including the limit over medical decisions.

A conservator is appointed to oversee the financial affairs of a person who is unable to do so. The conservator takes control of the dependant person’s assets and must handle them, including investing, for the welfare of this protected person. Once a conservator is appointed, a dependent person may not liquidate his/her own assets or determine how the monies will be invested without the consent of the conservator.

"Conservatorship planning" (also called "nomination of conservator") involves a written document, like a will, in which you name the person you want for your conservator. You can also include instructions on how you would want your personal and financial matters handled by your conservator. For example, the conservator could be instructed to manage your property, know where you would like to live, and be informed about your wishes regarding health care. (The same person could also serve as your health care power of attorney.) Then, if you should become incapacitated and need a conservator, the court must name the person you chose and order that your instructions be followed, unless the court finds that this would not be in your best interests. Be aware that the person you choose is not required to serve as your conservator — so choose a reliable person and discuss your plan with the person in advance to make sure he or she agrees with it.
 

If you have other informal arrangements with relatives or formal planning arrangements such as a durable power of attorney, you may not need to do conservatorship planning. However, if it is likely that someone would challenge your planning arrangements (for example, if there might be disagreements within the family), you should use conservatorship planning as a "backup" to your other planning arrangements. Remember, anyone can petition to be a conservator or guardian for an incapacitated person, and a conservator or guardian can revoke or terminate prior planning arrangements. By naming the person you would want to be your conservator or guardian, you have the best possible protection against the appointment of someone you would not want to be your conservator.
 

In order to increase the public’s access to justice, the State Judicial Branch has made the Guardianship & Conservatorship Manual available online.  Click on the Chapters below to read more about guardianships and conservatorships:
 

The Minnesota Association for Guardianship and Conservatorship may also be a helpful resource.
 

If you want more information about guardian/conservator, please contact a professional or the Senior LinkAge Line®, 1-800-333-2433.

Back to Top

Important Papers

If something terrible were to happen to you and you could no longer speak for yourself would family members or friends know where you kept your important papers or records?  Besides having a will, a health care directive, or savings, planning for your future also involves collecting and storing important information in a secure, but accessible, location.  Here’s a Planning Guide for your important stuff.

Printer Friendly – Important Papers

Back to Top

Choosing a lawyer, financial consultant, doctor or consultative professional is a personal decision which each person must make based on gathering facts and information.  The purpose of this site is to provide you with some suggestions to explore more around planning for your future.  Your personal situation will dictate whether any of these options are appropriate.  At any point, if you need to talk to someone about choosing a professional who can assist you with these decisions, contact the Senior LinkAge Line® at 1-800-333-2433.

No referrals or suggestions from this site should be considered legal, financial, health care or other type of professional advice or an endorsement of the service. 

DISCLAIMER and COPYRIGHT:

MinnesotaHelp.info and MNAging.org includes links to other web pages. These include links to Web sites operated by other State of Minnesota government agencies, other state and federal agencies, nonprofit organizations and private businesses. When you link to another site, you are no longer on MinnesotaHelp.info or MNAging.org sites and this disclaimer is not applicable. When you link to another Web site, you are subject to the disclaimer of that site.

Neither MinnesotaHelp.info nor the Minnesota Board on Aging, nor any agency, officer, or employee of the Minnesota Board on Aging or the State of Minnesota warrants the accuracy, reliability or timeliness of any information published by this system, nor endorses any content, viewpoints, products, or services linked from this system, and shall not be held liable for any losses caused by reliance on the accuracy, reliability or timeliness of such information. Portions of such information may be incorrect or not current. Any person or entity that relies on any information obtained from this system does so at his or her own risk.

The MinnesotaHelp.info and MNAging.org pages are presented as an informational service and any content should be independently verified with specific agencies when an official record of action is required. State agency authored documents are in the public domain. Copyright and access restrictions apply.