Financial advisor Paula Mogan preaches the importance of financial independence to her clients, especially as they begin to approach age 50.

That’s because Mogan, who has been in the industry for more than two decades, has heard many “‘horror” stories of older people who do not have extended family to care for them or a financial plan in place.

“I have been taking care of people for a long time and I am really passionate about trying to make a difference in peoples’ lives and protect them,” said Mogan of Mogan Wealth Management of UBS in Rockland, Mass.

Mogan said her practice encourages clients to start focusing on a plan when they get to around 50. “Certainly, by age 60, it’s really critical to make sure that people put a plan in place to protect themselves and their spouse or partner if they have one,” she said.

For those who do not have a partner or children, that plan to securing financial independence becomes even more critical, Mogan said.

Estate Planning
An estate plan is vital, Mogan said. She said her team, which includes her two sons, takes a financial planning approach to everything they do. “The estate planning box has to be checked to make certain our clients get it done,” she said.

Mogan suggests working with an elder law attorney. The estate plan, she said, does not have to be sophisticated and expensive. “You just need a basic statement to make sure your wishes are carried out,” she said. “It’s shocking how many people don’t do that.”

While everyone needs an estate plan, Mogan noted that it is especially important for individuals so that they can control what happens to them as they get older or should they get incapacitated. She warned that without the estate plan, the state intestacy law would come into play, meaning the state would make decisions on who would get your assets.

It puts in writing who is going to make decisions for you if you become incapacitated, and who is going to get your assets when you die, Mogan said.

Estate planning packages typically include documents such as a revocable trust, which carries out client wishes after death; a power of attorney that gives someone the right to help with matters such as financial decision; a living will that specifies a client's wishes for end-of-life medical care; and a healthcare proxy that designates who will make decisions if a client ends up hospitalized and unable to communicate.

Unlike a will, which is a written document that becomes active after death and expresses wishes for things like naming guardians for minor children and bequeathing physical items and cash assets to relatives and friends, assets in the revocable trust are directed to a trust and can be amended anytime. It is also active at the time it is created.

Long-term Insurance
Mogan said long-term care insurance is another must-have for people in their 50s. She noted that everyone has a different financial strength, but whether you get a long-term policy that pays out $10,000 a month or one that pays out $2,000 a month, the important thing is that “by getting some protection for yourself, you at least know that you have some money going towards extended care, should you need it,” she said. 

Mogan said that the earlier you address long-term care needs, the lower the premium. She said it becomes harder to get if you wait until you are around 70, and the premium will be much higher. “Somewhere in their mid-50s is when we really want them to get it,” she said.

“You want to be young and healthy. Not that people end up being cognitively declining in their 60s, but we never know what’s going to happen,” she added.

Housing
Another key area single people need to be thinking about as they age is housing, Mogan said. The question for those who own their home, she said, is, “Do they want to age in place, or do they want to explore assisted living where there are a lot of beautiful communities?”

“Some people will say, ‘I don’t ever want to leave my home,’” and maybe they are fortunate that they have the financial wherewithal to have people come into their home and assist them with the things they can no longer do, she said. But Mogan said there are others who also have the financial wherewithal, but they would prefer to go to an assisted living community so as not be isolated. “They get to play bridge and they get to go to the mall or the theater,” she said.

Mogan gave an example of a client who recently turned 99 and moved into assisted living. “She went kicking and screaming and now I can’t call her between 11 and 8 because she is too busy with her activities. She is running the place,” Mogan said.

Where you choose to live in your senior years partly depends on your financial situation, but it also has to do with who you are as a person and how you want to live your life, Mogan said.

“It’s really being thoughtful when you are a little younger,” she said. “I don’t think anyone knows until they get to be where they need to do something, but it’s really advisable to explore all the different places that you have prior to having to make that decision."