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To Infinity and Beyond…Wealth Planning for a Longer Life

To Infinity and Beyond…Wealth Planning for a Longer Life

August 15, 2022
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The 1995 film Toy Story was a step into the future for Pixar Animation Studios and Walt Disney Pictures. It was the first entirely computer-animated feature film, and it was the first release from Pixar Studios. The movie introduced us to Buzz Lightyear, a space ranger from Star Command. His catchphrase in the movie was “To infinity…and beyond”.

Sources: barnesandnoble.com and independent.co.uk

Thanks to medical technology advances, we could join Buzz on this venture. Humans could now live longer and healthier than ever. Some experts—like Harvard University Professor of Genetics David Sinclair, author of Lifespan: Why We Age—And Why We Don’t Have To—even proffer that “there is no biological limit, no law that says we must die at a certain age.”

This exciting prospect comes with a big challenge: planning financially for golden years that might extend to age 90, 100—or even longer. If you tack on an additional ten or 15 years to your life, you could face the very real and dangerous risk of running out of money before you run out of life—or having so little left that your lifestyle becomes seriously compromised.

The good news: Longevity planning is becoming an increasingly important part for successful families. The goal is to help combat the financial risks of living much longer than prior generations. Here’s a look at two ways wealth management is being used to position families to hitch a ride with Buzz.

Concierge and specialized medical care

Any discussion of funding a longer life should involve the topic of paying for medical care, so that you and loved ones can continue to enjoy lives that are not just extended but also healthy.

The medical care landscape is changing at a rapid pace and the traditional health care system is very unlikely to be able to keep up with demand. For those who are concerned, and who can afford it, concierge medicine can be a viable solution.

This broad term covers a wide variety of health care delivery models, concierge medicine is at its core a membership model: For a fee, you get access to “boutique” medical practices with relatively small ratios of patients to physicians—enabling shorter wait times, longer visits and significantly more personalized care given by physicians with specialized training.  

The issue: High-quality concierge medicine can be extremely costly, depending on the care needed and the providers. Therefore, the ability to use wealth management solutions to address the potential costs of concierge health care and specialized medical care can be extremely valuable—even to those with wealth. Consequently, some of the foremost wealth managers, accountants and attorneys are working with families to make certain that their financial and legal world is set up to benefit from longevity planning.

ESTATE PLANNING

Estate planning is another key aspect of longevity planning. Due to longer life spans, people and families may need to rethink their existing estate plans and even their entire mindset about wealth transfer. Indeed, the potential to live much longer can create an estate planning challenges for families and their advisors.

Specifically, we are seeing significant issues develop for successful families in terms of how and when to transfer assets to subsequent generations. A critical longevity-related question must now be asked: “When does the next generation get to benefit from and control the assets we have accumulated?”

If a client expects to live past 100 thanks to medical advances, when do the inheritors take control of their financial resources? Is it in their 70s? 80s? 90s? Potentially disastrous family consequences could arise from not thinking through the possibilities and being proactive.

Controlling wealth until death is a common practice among independent and successful families. However, this philosophy can lead to poor estate plans, especially when the people involved live a long time. This could affect two (or more) future generations.

Often, it can be wise to transfer assets before death, which can head off lots of possible problems—such as family disputes, lawsuits and assets strangely disappearing. Shifting some wealth before death can also prevent problems if the wealth holder suffers dementia and is exploited by staff or even family members.

Consider the following questions:

 

  • Are you as concerned as you should be about rising health care and state-of-the-art treatment costs potentially causing you to run out of money—especially if you live to 100 or beyond?

 

  • Are you adequately concerned about how living to 100 or older could impact your assets—and your ability to pass on those assets to loved ones, according to your wishes and as you see fit, using smart estate planning strategies?

 

  • Are you working with a wealth manager who is knowledgeable about longevity planning and who can help you take steps to plan for the health care you want and leave a legacy on your terms?

 

Longevity planning is garnering tremendous interest, and top wealth managers and aligned professionals are going to play critical supporting roles in areas like paying for concierge medicine and estate planning. Unless you are Buzz Lightyear, the thought of going to “To infinity …and beyond” can be overwhelming and scary. Longevity planning can potentially help make that statement less scary for you and your loved ones.

The CFPs of Impel Wealth Management are closely monitoring these trends. We are more than happy to collaborate with your tax and legal professionals on how to best help you. Let us know if you would like to discuss this, we are here to help as we continue “Moving Life Forward.”