Financial Planning for the Future
September 29, 2014

“The day I die, I don’t want to have any money left.”

Former tennis pro Billie Jean King made this comment in her keynote presentation at the Chicago Foundation for Women(CFW) annual luncheon on September 18, 2014. She did it to encourage and rally the audience to take out their checkbooks and credit cards and contribute to CFW.

Her cause is noble. But if there is truth to her plan, it is poor financial planning. There are a variety of reasons why this is not a good approach, but the one that immediately came to mind is that all financial plans should provide funds for all emergencies and unplanned events so that you do not run out of money before you die and become dependent on your children or a ward of the state.

It would be a shame to live your remaining years destitute.

It is important to plan for emergencies or unplanned events so you have adequate funds available. If you were to become ill and need nursing care or a nursing home, traditional insurance does not pay for the facilities you may need, so you would need to supplement the cost out of your pocket, unless you have long-term-care insurance.

If you hold investments in securities that change in value, such as stocks or bonds, a market downturn or spike in interest rates can leave you with a lot less to live on. In addition, people are living a lot longer than they used to, so what happens if you live longer than you financially planned?

It is best to consider for the risk of these situations in your retirement and put adequate funds aside. Should you not need this money and die with some left over, then you can designate in your will to give these funds to your favorite charity.

Photo courtesy of | Disclaimer: The views expressed in this article are the opinions of the author and should not be interpreted as individualized investment advice. Investment objectives, risk tolerances and the financial situation of individual investors may vary. Please consult your financial and tax advisers before investing.

Susan Templeton

September 2014