Fifty is a little on the late side to start taking care of these important life matters. However, it is better late than never. It’s easy to put these tasks off – the busy nature of our day-to-day lives gives us a good reason to procrastinate on larger issues, like death and our own mortality. However, according to Charlotte Five’s article “For ultimate adulting status, have these 10 documents by the time you’re 35,” the time to act is now.
According to the article, here are the ten documents you need to get locked down.
A Will. The last will and testament does not have to be complicated. However, it does need to be prepared properly so it will be valid. If your family includes minor children, you need to name a guardian. Pick a Personal Representative (or an Executor) who will be in charge when you pass. If you don’t have a will, the law of your state will determine how your assets are distributed, and a court will name a guardian for your children. It is better to have a will and put your wishes down in writing.
Life insurance. There are two basic kinds: term insurance, which often covers about twenty years, and universal or whole, which covers you for your lifetime. Everyone’s situation is different, but you may want to have enough insurance to cover your liabilities: your home mortgage, college funding for your kids, and any outstanding debts, like credit cards or a car loan. This way, you aren’t saddling heirs with your debt.
Durable power of attorney for financial matters. This document lets you designate someone to pay your bills, manage your money, and make financial decisions for you if you become incapacitated. Without it, your relatives will need to go to court to be appointed as your agent. Pick a trusted person and sign the document when you meet with your estate planning attorney.
Twice your annual income in savings. Most Americans don’t do this. However, if you start saving, no matter how small an amount, you’ll be glad you did. You need savings to avoid creating debt if an emergency occurs. A reserve of six months’ worth of monthly expenses in a savings account will give you peace of mind.
Insurance coverage. Make sure that you have the right insurance in place, in addition to life insurance. That means health insurance, auto insurance, and disability insurance.
Credit report. People with better credit reports get better rates on home and auto loans. You can get copies of your three credit reports free from the credit reporting services. Make sure everything is correct, from your address to your account history.
A letter of instruction. Where do you keep your estate planning documents? What about your bank statements, taxes, and insurance documents? What about your digital assets? Keep a list for easy access for those who might have to figure out your affairs.
Retirement plan. Most people know they don’t have enough saved for retirement. If you aren’t enrolled in your company’s 401(k) or other retirement savings plan, get on that right away. If your company matches contributions, make sure you are saving enough to get every bit of those matching dollars. If your company doesn’t have a retirement plan, then open an IRA or a Roth IRA on your own. You should try to contribute as much as you possibly can.
Updated resume. Make sure you have an updated resume, so you can easily send it out, whether the reason is related to a casual conversation about a speaking opportunity or if you’re starting to look for a new position. It also helps to do the same thing with your LinkedIn profile. No matter how long you’ve been in your field, many people look at LinkedIn profiles to see who you are and what and who you know.
A budget. Here’s how you know you’re really an adult. If you don’t know what’s coming in and what’s going out, you can’t possibly have any kind of control or direction over your financial life. Start tracking your expenses, matching with your income and making any necessary changes.
One last thing—do you have a bucket list? Don’t wait until you’re 70 to consider all the places you’d like to go or the people you’d like to meet. It’s true that you only live once, and we should enjoy the ride.
Reference: Charlotte Five (April 23, 2019) “For ultimate adulting status, have these 10 documents by the time you’re 35”
