How to Protect Your Wealth as You Get Older

How to Protect Your Wealth as You Get Older

September 30, 2020

As you get older and closer to retirement, your financial practices need to shift slightly as you transition from working and saving to relying on your nest egg. As you approach this stage of your life, you need to take steps to protect your wealth. Keep these tips in mind. 


  1. Shift Toward More Conservative Investments


As a general rule of thumb, you can tolerate a higher level of risk when you are younger than when you are older. As you get older, you should shift from high-risk toward more conservative investments.


High risk investments have the potential to net you a lot of profits, but they also have a heightened chance of losing you money. In contrast, low-risk investments offer smaller but more consistent gains. When you're young, you have time to weather the ups and downs of high risk investments, but as you get older, you need a safer, more predictable portfolio. 


  1. Invest in Long Term Care Insurance


Unfortunately, aging can also usher in health problems, and nursing homes can easily cost $100,000 or more per year. If you want to ensure that you won't lose your assets if you need to move into a nursing home, you may want to invest in long-term care insurance. Keep in mind that Medicare does not cover staying in a nursing home. 

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. Guarantees are based on the claims paying ability of the issuing company.


  1. Consider Delaying Social Security Payments


Whether you need to live on Social Security payments or plan to invest the funds, you may want to delay your payments. You can start taking Social Security payments as young as age 62, but at this age, you receive a reduced payment. 


Depending on the year you were born, you become eligible for full benefits between age 66 and 67. However, if you delay receiving benefits until age 70, you receive 132% of your regular payment. Even if you only delay your benefits for a few months, you can receive slightly more than your regular payment. 


  1. Take Advantage of the Gift Exemption


As of 2020, if your estate is worth more than $11.58 million, you will face a 40% estate tax on assets over that threshold when you die. Note that the limit doubles for married couples. 


One possible way to protect your assets from this tax is to give away some of your assets while you are still alive. Under the gift exemption, you can give up to $15,000 to a limitless number of individuals every year, and those funds are not considered to be part of your estate when you die. By gifting money to your heirs now, you may be able to minimize your exposure to the estate tax in the future. 


  1. Think About Passive Income Streams for Retirement


Ideally, you should start thinking about protecting your wealth long before you start aging. In particular, you may want to work on setting up passive income streams. Look for investments you can make now that will continue to pay you money after you retire. 

Important Disclosure Information

The comments above refer generally to financial markets and not Bazis Young portfolios or any related performance. The content of this article should not be considered financial advice. The article is not intended to  offer specific investment recommendations and  is general in nature and should not be considered a comprehensive review or analysis of the topics discussed. This article is not a substitute for a consultation with an investment adviser in a one-on-one context whereby all the facts of the attendee’s situation can be considered in its entirety and the investment adviser can provide individualized investment advice or a customized financial plan. Opinions expressed are current as of the date shown and are subject to change. Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss.  All investments carry some level of risk including loss of principal. Information or data shown or used in this material was received from sources believed to be reliable, but accuracy is not guaranteed. This information does not provide recipients with information or advice that is sufficient on which to base an investment decision. This information does not consider the specific investment objectives, financial situation or need of any particular investor and may not be suitable for all types of investors. Recipients should consider the content of this information as a single factor in making an investment decision. Additional fundamental and other analyses would be required to make an investment decision about any individual security identified in this report.

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