Inevitably, changes will occur that affect your finances, and some of these will be life-cycle changes. As these changes occur, modifications should be made to your finances to ensure that your retirement planning goals and objectives are modified if necessary. The following are some ideas:

Becoming an Empty Nester
If your children leave your home to live on their own, it will likely mean that you can redirect some of the funds that were allocated towards their wellbeing and general living to your retirement nest egg.
If you and your spouse divorce, you may need to update your beneficiary designation form. This update should be made even if you want your former spouse to remain as your beneficiary, so that there is no uncertainty about your intentions. You may also need to revise your retirement planning goals and objectives as your financial needs for retirement may change. Unless you remarry, your retirement plans many now require consideration for one person instead of a couple; in addition, your retirement lifestyle may have been based on a joint decision that required some compromise. Now that no compromise is necessary, your projected cost of retirement living may change.

If you remarry, some of the same considerations may need to be made as those provided above. In addition, you may need to make special provisions for any children from a previous marriage, primarily in terms of beneficiary provisions. In such cases, it may be necessary to either split your accounts and have different parties named as beneficiaries, or designate a trust as beneficiary under which your spouse is provided income during his or her lifetime and your children inherit the remaining amount after your spouse's death.

Taking Care of Elderly Parents
cost of taking care of the elderly can be high, and could negatively impact your savings effort if measures are not out in place to cover their living expenses. If your parents have a long life expectancy and will not be eligible for Medicaid, it may be practical to have them purchase long-term care insurance to protect their assets from being used to cover long-term care needs. In addition, ensure that they sign up for Medicare on a timely basis, as well as for their social security benefits.

The lifestyle that your parents live may determine their physical and mental health status, and you can help to ensure they maintain the best of both by getting them involved in activities such as frequent and appropriate exercise programs, living an interesting and active lifestyle and eating well.

If your parents are at least age 70.5, they must take required minimum distributions from their tax deferred retirement savings accounts (other than Roth IRAs) every year. Failure to take their required minimum distributions would result in them owing the IRS an excess accumulation penalty of 50% of the distribution shortfall. To ensure that you are aware of distribution and other related activity that occur in their retirement account, consider having them make arrangements for you to receive copies of all of their account statements.

Similar to the beneficiary checks that are done for your account, consider working with your parents to ensure that their beneficiary forms are up to date, and that updates are made as necessary.

Next: The Complete Guide To Retirement Planning For 50-Somethings: Retirement Resources »

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