older coupleHere are excerpts from the conclusion of USA Today columnist Rodney Brooks’ excellent piece on seven mistakes to avoid in retirement planning.

“4. Does your spouse have power of attorney, and are all accounts held jointly? ‘I had a client with $756,000 in financial assets, of which $686,000 was in the husband’s name in retirement accounts’, says Curt Knotick, investment adviser with Accurate Solutions Group in Butler, Pa. ‘He was sole breadwinner, and she was a stay-at-home mom. But he had a stroke. His wife had no access to those assets because she had no power of attorney. With an IRA or qualified assets, the spouse is not a joint owner but a beneficiary. The spouse had to petition the court. That can be completely avoided with a $100 power of attorney’.

“5. Are you assuming that because you haven’t saved enough for retirement, you can keep working into your 70s? ‘How many people do you see on your job in their 70s?’ asks [Karen]Wimbish [director of retail retirement at Wells Fargo].. ‘Many of us assume we will find a job or keep our current job or be healthy enough. It is questionable whether you will be able to work that long’.”

“People don’t view retirement in the long term, says [Joe] Heider. ‘If a married couple retires at 65, there’s a 50% chance one will live into their mid-90s. If you live another 25 years, you’re in retirement for half of your working life. If you retire at 60 you are almost in retirement as long as you were working, and you need to account for inflation’.”

 “6. Are you underestimating health care costs? ‘People are living longer, so they will have health care’, says Wimbish. ‘Many people think Medicare will cover all their medical expenses’. It doesn’t. Payment depends on the type of treatment. ‘And it also doesn’t cover dental, vision and hearing’, Wimbish says. ‘Older people need one or all of them. They underestimate what they will have to pay. It could be a substantial amount of money. It could be $250,000 in retirement. And that doesn’t cover skilled nursing’.

“7. Are you prepared psychologically for retirement? ‘The psychological mistakes are tougher in my opinion’, says Heider. ‘Many people identify what they do as who they are’,” he says. ‘It is their identity. It can be difficult to let go of that. People need to look at what are their hobbies. People retire and they don’t have hobbies, things they enjoy doing.

“’We’ve seen where people retire and are miserable’, he says. ‘It puts a strain on marriages. Couples have different views on what retirement will be. Children are raised, and now they are spending 24/7 with each other. It can put a strain on relationships. The nature of a marriage or relationship changes dramatically when you are together 24/7 compared to being together after 5 until you go to bed’.”