Planning for Death & Old Age, When You’re Young and Full of Life

Yeah, I know. What the heck are we doing talking about aging, death and all things morbid on the cusp of summertime fun, graduations and kids being out of school? No worries, I’ll lighten the mood with future blog posts but honestly is there really a right time to talk about death?

Most people get really uncomfortable when they have to talk about their own mortality. Particularly if you’re a millennial. In the midst of traveling, enjoying life, planning a career, finding a soulmate, starting a family and purchasing your first home, who wants to think about getting old and dying? It should be you. We are in the age where crowdfunding sources such as GoFundMe and YouCaring have essentially become the 401k, health insurance and life insurance policies for people and their families. But what happens when those sources don’t work because the monetary goal isn’t met? Your loved ones are often left in a lurch trying to figure out how they will cover your medical care and final expenses or they’ll have no idea what your wishes are in the event of an untimely death. So, what can you do to be better prepared for death or life occurrences? Let’s talk about the 5 things that can alleviate the stress.

1. LIFE INSURANCE

This one pretty much seems like a given. However, most people really don’t understand the importance of getting a life insurance policy. It not only covers your funeral costs but depending on the amount, it can replace some or all of the income you provided to your family and your children. Even if the money will only last for a short duration, it will at least allow your family time to grieve and regroup without also having to worry about how they will cover costs. The average funeral costs anywhere from $7,000 to $10,000. I’m sure most families may not have that amount readily available or it’s taking away from savings. Do your family a great service and secure a life insurance policy. Some employers will offer you a year’s worth of your salary in life insurance at no charge and will then offer larger amounts at discounted rates. If that’s not an option, seek out companies that offer life insurance policies and shop around for the best rates. The younger you are, the cheaper it will be.

2. 401K

Contributing to your 401K will really benefit you when you’re older, especially when you start young. It’s basically money that you can live on when you retire because it’s a retirement account sponsored by your employer that you pay into. You can choose the amount you contribute and employers will usually match your amount dollar to dollar up to a certain percentage. The good thing about 401K’s is that the money you contribute to it is taken pre-tax which will essentially lower the amount you’re actually taxed on. It’s a great way to save for old age. Although taking money from your 401K is frowned upon and you will be heavily taxed on it if you do, in extreme emergencies, you can borrow from it and pay a fee but unlike borrowing from a bank or line of credit, it will be interest free and will not require a credit check. If there is interest charged on the loan, the amount you pay will still be paid into your 401K and not handed over to a bank or lender. The money you pay is being paid back to the retirement account.

3. LIVING WILL

I recently took a will preparation class, which then prompted my husband and I to have a living will prepared with a lawyer. Many people feel that they do not need a will because they don’t think they have anything of any real importance to leave if they pass away. While this may be true, a will encompasses more than just “stuff” you want to leave with people. It is a way to detail your final wishes and most importantly if you have children, who you would want to be responsible for them. The care of my child is really what prompted me to have a will prepared. I wanted to ensure that in the event of the death of my husband and I, that my son will not only be cared for responsibly but also that the money we leave for him will be allotted reasonably, responsibly and in line with our wishes. When you die without a will, anyone can come along and try to lay claim on everything that you own and the care of your children. It would all need to go through probate court and what really touched a nerve with me is that during that time, your kids could be placed in foster care until the courts figure out where they will be placed permanently. That could take months and would be awful for your children. Seek out an attorney to assist you with your will preparation. You can also prepare one yourself but be sure that it meets your state’s requirements to maintain its legality.

4. ACCIDENTAL DEATH & DISMEMBERMENT INSURANCE

Young people are adventurous, daring, carefree, like to explore, drive fast and try new things, which is why accidental death and dismemberment insurance (AD&D) is highly recommended. Typically, young adults don’t die of natural causes. Most times their demise is the result of an accident. Unlike traditional life insurance, AD&D only pays out if a death is due to an accident or if someone is severely injured. AD&D will pay in conjunction with life insurance but is considerably cheaper. That’s because the language on an AD&D policy can be very specific and will not pay out if certain requirements are not met. However, it still can be a beneficial plan to have, even if you can’t afford to have a life insurance policy as well.

5. POWER OF ATTORNEY/ HEALTHCARE PROXY

We had a family member who became very ill very quickly and was incapacitated for several months. We were not sure if our loved one would survive. Fortunately, he made a full recovery but during his stay in the hospital, my husband ultimately became responsible for his affairs which included, depositing and withdrawing money from his bank to pay his rent and bills as well as having to deal with creditors. Since he did not have any power of attorney in place, it took my husband several weeks before he could get access to any of the information he needed to handle the business for our relative. It’s important to have both a power of attorney and health care proxy so that if you are incapacitated someone who you designate can make decisions on your behalf. The power of attorney usually governs things pertaining to money for paying your bills and mortgage and dealing with creditors and banks. Whereas a healthcare proxy is someone specifically designated to make decisions in your best interest regarding your health and medical care. Be sure that if you don’t have these documents prepared by an attorney that you get them notarized elsewhere. Both are valuable documents to have in the event that you can’t make decisions for yourself.

While having these things in place are super important, once you get them, put the documentation in an “important paperwork” folder in your home and let one or two people who you trust, know where it’s located.

The one thing in life that’s promised is death. Whether untimely at a young age or a life fully lived at 110, why not make it as easy as we can for the loved ones we leave behind?