The 4 Documents You Need to Prepare Before Retirement


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For many people, the thought of dying is easier to deal with than the thought of becoming incapacitated. What I find, is a lot of folks that are in their 60s and 70s, they don’t want to deal with the thought of incapacity. Denying the problem doesn’t make it go away.

At Cardinal Advisors, we see the consequences of not planning for incapacity and death mostly when proper legal documents were not executed or updated. Not only does this make it harder on the family, but all the money and assets can be handled differently than the wishes of the deceased.  To avoid this, there are four basic documents you should have in place in order to strategize estate planning and life insurance before you die, which include: financial power of attorney, health-care power of attorney, HIPAA release, and a will.

1. Financial Power of Attorney

The financial power of attorney document permits your designated agent to control your finances when you can’t. Financial Power of Attorney is used a majority of the time when someone becomes physically or mentally unable, but there are also other minor uses. The document usually goes into effect once signed, but it cannot be used unless it becomes necessary. Still, it is important to pick someone you trust, and hopefully, someone who is financially responsible.  In retirement plans, the person chosen is important because they will be controlling how your bills get paid, possibly your long-term care bill. Make sure you discuss the plan for paying for care with this person before you elect them. It is crucial they draw from the right account to pay bills; Otherwise, you could run out of money sooner than expected.

2. Health Care Power of Attorney

The health care power of attorney document addresses the designated agent you choose to make medical decisions on your behalf.  Health care power of attorney can come into effect when you’re temporarily incapacitated, such as under anesthesia, or can be for the long term, such as with dementia or Alzheimer’s.  Think carefully about this decision as your life rides on it, and make sure you communicate your wishes well with your chosen agent.  There are other documents you can have drawn up to make your desires known about the kind of care you receive, but make sure that the agent knows your wishes and agrees to follow them before you sign the papers.

3. HIPAA Release of Medical Information

HIPAA, or the Health Insurance Portability and Accountability Act of 1996, is legislation that was put into place to protect citizen’s private medical information.  It severely restricts access to patients’ medical records as every medical provider must have this written authorization, which is a HIPAA release, to release records to anyone besides the patient.  A HIPAA release is critical in retirement planning as you may reach a point where you’re not capable of making health decisions yourself. The person appointed with the health-care power of attorney will need this medical information gained from the HIPAA release in order to assist you in decisions. Most of the time, HIPAA forms are included in health-care power of attorney.  However, there are other family members you might want to include in a HIPAA form, besides the health-care power of attorney.

4. Last Will and Testament

Almost everyone has heard of a will, which lays out what you want to happen with your assets after you pass. A will can be very basic or very customized, depending on your situation and preferences.  A will is also the document used to designate guardians for minors. Take into consideration that a will does not trump beneficiary designations, such as in an IRA. Though, IRAs are a completely different part of retirement planning that needs to be looked upon when assessing life changes.

Even if you already have these documents in place, it is critical to make sure they are updated regularly and Cardinal Advisors can help you do so. From divorce and marriage to birth of a child, or death of a child/spouse, many life events require changing these papers dramatically. There are specialized attorneys that can help you with these documents at a reasonable price. If you need help finding an attorney in your area, contact Cardinal Advisors at 919-535-8261. Cardinal Advisors can also help guide you through the process for planning for retirement, which includes discussing the four documents.

Hans Scheil is the author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and the accompanying workbook. He can be reached at

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