Ways to Give

Financial planning for women: what women need to know
about planning for retirement and estate distribution

Retirement and estate planning are not activities we put high on our "to do" lists - we're too busy taking care of today's demands to worry about the future. Also, we may not be sure where to start. We may ask ourselves:

     .What's so different about financial security for women than for men?
     . How could I support my favorite charities when I may need all my assets for a nursing home?
     . Why should I plan for retirement when a wife and mother never really retires?
     . Why would I need a will or estate plan if my husband has one?

Why should we plan for retirement? Because statistics and personal experience tell us that women live longer than men, we may find it necessary to provide for our own care. Planning our lives now leaves us time and energy to enjoy our golden years.

It is important to do something now - no matter what phase of life we're in. Let's look at how our needs change as we get older.

Pre-Retirement

From about the age of 45, we realize that we are accumulating assets and we begin wondering if there are better ways to manage them. In the years before retirement age, we find ourselves

     . Reaching the peak of our careers
     . Educating children
     . Paying off the mortgage or buying a vacation home
     . Coming to terms with our own age when the first mailing from AARP arrives
     . Caring for children and parents (the "sandwich" generation)
     . Having someone close to us die

Our preoccupation with children and parents at this time makes us start thinking about how we ourselves will retire one day. Visions of travel, meaningful volunteer service, making a difference in our communities, long afternoons with a good book, or other ways we'd like to spend our free time cause us to think about funding those plans - not to mention food, shelter, and healthcare.

Example: Beth is 47 and works as an upper level manager. She earns a comfortable salary, which allows her to travel to Europe every year or two.

Beth has accumulated a comfortable amount in her retirement plan and some stock that has appreciated since she inherited it from her grandparents. She makes annual gifts to her church, her alma mater, the United Way, and four local charities.
 
This year, thanks to a newsletter from Conception Abbey, Beth realized that she could make her charitable gifts with the stock and purchase other assets to balance her portfolio with the cash she would have used for gifts.

Beth considers how to best manage her increased disposable income after the last couple of years of house payments. She narrows the charities to which she gives her time and financial gifts and makes better tax-wise choices, regarding both charitable gifts and investments. She thinks about how she wants to live when she retires and how she will manage her healthcare needs. She writes a will, providing for her care and for the charities she has supported over the years.

Because of Beth's age and financial demands, she is not ready to make irrevocable gifts at this stage of her life. Instead, her will stipulates that upon her death the vacation home that she owns and 90 percent of her stock holdings will go to a favorite niece, while the other 10 percent of the stock will go to her favorite charities.

Young Retirement

For many people, the first ten to fifteen years following retirement present optimum opportunity for enjoying free time, good health, and sufficient income. Young retirees may be

     . Interested in travel or other hobbies
     . Spending more time each week in meaningful volunteer work
     . Adjusting to a husband's retirement
     . Beginning to attend funerals with some 
frequency, often those of friends' husbands
     . Thinking seriously about planning our estates
     . Facing the illness or death of a spouse

At retirement, our own or our husbands', we accommodate our lives to a more permanent income stream. We adjust our health insurance coverage and pay more attention to diets and exercise programs. We enjoy spending time with our grandchildren and giving them small presents. We may even get out in the garden to pull those nagging weeds.

Example: Virginia's husband, Bill, died suddenly last year, although active and healthy. Their favorite activity was backpacking on the Appalachian Trail. Virginia turned to her group of long-time friends for support and companionship. Of the group, two were now widowed - one after her husband's long fight with MS - two were divorced, and three were married.

These friends had watched each other's children grow and become parents. They had grieved together when their children had problems. Together they hosted numerous wedding and baby showers for their various offspring and had spent at least one weekend each year at a lake house for "girls' time."

Although Virginia and Bill had wills when he died, as well as trust arrangements to minimize their estate taxes, Virginia reviewed her plans as a single woman. She learned that 90 percent of women spend at least part of their adult lives single, usually at the ends of their lives. Virginia has two grandchildren, both of whom had not been born when the wills were last updated. The home where she raised her children is large, and its size increasingly weighs upon her.

Virginia consulted her estate attorney, who recommended a financial planner. With these two advisors, she decided to use her appreciated stock to fund a charitable education trust to help her grandchildren with their college education. She transferred stock with a market value of $100,000 and a cost basis of $30,000 to a charitable remainder trust to continue for a period of eight years. During each of these eight years, the grandchildren will receive annual payments of $8,000. Virginia named Conception Abbey to receive the principal at the end of the eight-year term.

Sedentary Retirement

The age of 75 or so often marks the beginning of less active years. Maintaining optimum health becomes more challenging and our social circle narrows even more. We recognize more than ever the simple pleasures such as walking through a spring garden or watching grandchildren chase each other around the yard. Now truly elderly, we may

     . Become frustrated at the limits put on us by health problems
     . Prefer to spend an afternoon reading and 
napping rather than studying current events
     . Appreciate having someone else clean the house or run errands 
     . Move to a retirement home or nursing facility
     . Make arrangements for our funerals to spare our loved ones pain and guesswork

At this time of life, many of us are on a fixed income and illness often interferes with our ability to get things done. Having our money-management issues settled beforehand can be a great relief. We want to complete our estate planning and forget about it!

As we contemplate the ends of our lives, it is time to make sure our financial concerns will not become a worrisome burden. We draw on pensions and annuities, Social Security payments, and investment income. Life-income gifts to Conception Abbey may be ideal at this time. Investments in stocks or mutual funds that yield small-to-moderate returns can be reinvested within a charitable trust to produce the income we need, while providing an income-tax deduction. If we have not already done so, planning for final gifts to those most important to us - family, friends, and organizations - should be done while we are able.

Planning now - whatever our stage in life - means we make our decisions about healthcare, lifestyle, and assets without postponing these choices to a time when we cannot make good ones or thrusting them, however unwillingly or unwittingly, onto our loved ones.

Example: Ruth, aged 87, has four children and twelve grandchildren. Five of her grandchildren are grown and have given her three great-grandchildren! Her husband died ten years ago although sometimes it seems like yesterday. Ruth's health is good for her age; she walks daily and she tries to eat in a healthy manner, but her appetite and ability to taste are diminished.

Ruth enjoys reading and is a regular at the local library where she used to serve on the board. She spends a few hours a week checking in books for the reading room of her retirement home. She also delights in telling her young family members about the people in her photo albums.

When her husband died, Ruth reviewed her estate plans with her attorney and her bank's trust officer who manages her financial affairs, such as income-tax returns, insurance forms, and her trust. She decided to roll over some low-yield CDs and transfer the resulting $25,000 to Conception Abbey in exchange for a gift annuity of $1,875 a year for the rest of her life. She consulted Conception Abbey's gift planning officer when establishing the gift annuity and learned that the remainder could endow Conception Seminary College, something dear to both Ruth and her late husband.

Each person has particular hopes, dreams, and needs. How does a woman's estate planning differ from a man's? Not much, really, except with women's longer lifetimes, it is particularly important for us to make wise decisions about our estate planning and seek good counsel in making them. Planning early, with reviews at important turning points, can save later headaches and heartaches.

We Are Here to Help

We invite you to call our office (660-944-2821). We would be happy to meet with you or your financial or legal advisor about a gift to Conception Abbey.