By Geneva Verdeja on Thursday, Jan 23rd, 2025
Category: Blog

Planning for Financial Advocacy as You Age

Why Financial Planning Matters at Every Age

Financial planning is a lifelong journey, not a one-time task. It provides a framework to ensure your financial stability and security through every stage of life. Whether you’re just starting your career, supporting a growing family or entering retirement, a solid financial plan helps you manage resources, set achievable goals and prepare for unexpected challenges.

As income sources shift and the physical and mental effects of aging start to take their toll, having a clear strategy to manage expenses, investments and potential healthcare costs ensures peace of mind, prevents costly mistakes and serves as an additional defense against scammers. This proactive financial planning can protect your hard-earned assets and reduce stress for you and your loved ones.

Step 1: Choose a Trusted Financial Advocate

A financial advocate is someone you trust to manage your financial affairs if you are unable to do so. This person plays a critical role in protecting your financial well-being in the long term and ensures that your money is handled according to your wishes. Your advocate might be a spouse, adult child, close friend or even a professional advocate, but the most important qualities to look for are trustworthiness, financial responsibility and a deep understanding of your needs, plans and values.

The best time to choose a financial advocate is before you need one; we recommend choosing one at 65 and setting a full financial plan with them. Then if and when they are needed, you won’t have to struggle to bring them up to speed.

What Does a Financial Advocate Do?

A financial advocate can do as much or as little as you need them to. For example, you could put them in charge of a wide range of tasks, including:

Key Qualities to Look For

When selecting your financial advocate, prioritize the following traits:

Avoid These Pitfalls

To ensure your advocate can handle the responsibilities effectively, avoid choosing someone who:

Additional Considerations

Initiating the Conversation

Once you’ve chosen your potential advocate, initiate an open discussion about the role. Explain your expectations clearly, provide them with an overview of your financial situation and outline the responsibilities involved. It may also be helpful to share why you selected them, reinforcing the trust you have in their abilities.

By proactively choosing and preparing your advocate, you ensure your financial affairs will be handled with care, reducing stress for both you and your loved ones in the future.

Step 2: Organize and Simplify Your Financial Information

Streamlining your financial records is an essential step in effective planning. Begin by creating a comprehensive inventory of your financial accounts, assets, liabilities and key documents. This might include:

Store this information securely in a password-protected digital file or a fireproof safe. Share the location of these records with your financial advocate. Simplify further by consolidating accounts, enrolling in direct deposit for income and setting up automatic payments for recurring bills. These steps reduce complexity, minimize errors and make it easier for your advocate to step in when needed.

Step 3: Start the Conversation

Once you’ve chosen a financial advocate and organized your records, the next step is to have an open discussion about your financials, current and future. These conversations are essential for aligning expectations and ensuring your wishes are understood.

You don’t have to cover everything in one meeting. Gradually introducing your advocate to your financial plan helps you to decide how well they will do in the role and helps them be fully prepared. 

Step 4: Plan Your Financial Future

Financial planning is most effective when it aligns with your specific goals and needs. Consider your priorities as you age, such as maintaining a comfortable lifestyle, funding healthcare expenses or leaving a financial legacy for your loved ones. Defining your goals will help guide your advocate and shape your financial plan.

Key Steps to Define Your Goals

Step 5: Legally Appoint Your Advocate

Creating legal safeguards is a critical step in protecting your financial future. Without proper documentation, your advocate may face difficulties accessing accounts or making decisions on your behalf.

Essential Legal Protections

Step 6: Prepare for a Smooth Transition

Knowing when and how to transition financial responsibilities to your chosen advocate ensures your financial well-being remains protected. This process can be gradual, providing time for both you and your advocate to adjust.

Recognizing When Transition is Necessary

You can designate certain indicators to signal to yourself and your financial advocate that it is time to begin the transition of financial responsibility:

Red Flags:

Yellow Flags:

Temporary health issues, like a surgery or short-term illness, may also require your advocate’s managing finances during your recovery.

Steps to Transition Financial Responsibility

Making the shift doesn’t need to happen all at once. As long as you start early enough, it’s easy to start small and gradually accustom yourself to the changes.

  1. Assign Initial Tasks:
    Start by asking your advocate to handle smaller responsibilities, such as setting up an autopayment or reviewing account activity. Gradually increase their involvement as needed.
  2. Grant Limited Access First:
    Many banks and financial platforms allow “view-only” access to accounts, which can give your advocate oversight without full control.
  3. Introduce Key Professionals:
    If you work with accountants, financial advisors or lawyers, introduce your advocate to these contacts. This builds familiarity and helps streamline communication when needed.

The Role of Ideal Credit Union in Your Financial Journey

At Ideal Credit Union, we provide tools and resources to help you build a secure financial foundation. Our savings products, including high-yield savings accounts and certificates of deposit (CDs), are designed to help you grow your wealth with competitive rates and reliable security. Ideal Credit Union offers trusted solutions to help you save with confidence and prepare for the years ahead.

Start saving for your Ideal financial future today!