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Elder Law Estate Planning

How to Decide Who Your Healthcare Proxy Should Be

It’s especially important to name a healthcare proxy, because the chances of having a crisis escalates dramatically as we age. That’s why so many people put off naming a healthcare proxy, says Forbes in the article “How to Select A Healthcare Proxy,” often only addressing this, when they are completing other documents for their overall estate plan.

What usually happens is that people get so stressed out about naming a healthcare proxy that they put it off or make a bad selection. Making it even worse, is neglecting to tell the person they have chosen for this important responsibility.

healthcare proxy comic

How to Decide Who Your Healthcare Proxy Should Be. It’s not guaranteed that the person you chose as your healthcare proxy will ever be called on to serve. However, if they are, you’ll want to make sure they meet certain guidelines. For one thing, they’ll need to be at least 18 years old. They cannot be your direct health care provider or any of the direct health care provider’s employees, unless that person is also your spouse. They have to be willing to speak up and adhere to your own wishes, even if those wishes are not the same as their own. You’ll want to have a very candid conversation with the person you think you want to name as your healthcare proxy.

You might want to go through this exercise to make sure they are really willing to carry out your wishes. Create a worksheet that describes in detail some of the situations they may face. There are a few sources for this kind of worksheet, including one from a group called Compassion and Choices, a nonprofit centered on helping people get what they want at the end of their lives.

If you are close with your family, it may seem obvious to select your spouse, first-born child, or a sibling for this task. However, be realistic: when push comes to shove, will they be able to stand up for your wishes? Will they be able to deal with the fallout from family members, who may not agree with what you want at the end of your life? They’ll need to be up to the challenge.

Age is a real factor here. You want your proxy to be available in both the immediate and distant future. If you have a sibling who is only two years younger than you, she’ll be 81 when you are 83. That may not be the time for her to make hard decisions, or she may not be available—or alive. Select a few backups, and make sure the primary, secondary and even tertiary are listed on your advance directive.

Geography also matters. The person may be called upon in a crisis—if you are on the West Coast and they are in the Midwest, will they be able to get to your bedside in time? Many hospitals and skilled nursing facilities require a live human being to be physically present, if critical care decisions need to be made. Someone who lives within a 50-mile radius of you, might be a better choice.

Once you’ve made the decision, you’re almost done. Have a conversation with the person, whether they are the primary or a backup. You should also have a conversation with your estate planning attorney, to make sure that your healthcare directive and any related documents are all set for your future.

Reference: Forbes (April 10, 2019) “How to Select A Healthcare Proxy”

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Estate Planning

What Will My Social Security Benefits Be?

Your Social Security benefits in retirement are primarily dependent on the wages you get while working. The Social Security taxes deducted from your paycheck are based on that amount. If you’re still working and at retirement age, you can get benefits while earning other income. And depending on your age, you can also decrease and delay your Social Security payouts. The other important factors for determining Social Security benefits include inflation and the formula used by the Social Security Administration in its calculations.

Investopedia’s recent article asks “How Are Social Security Benefits Affected by Your Income?” The article explains how Social Security income is calculated—the more you earned while working, the higher the income benefit you get from Social Security. The government keeps track of your income from every year, and the part of your earned income subject to FICA taxes is used to determine your benefits in retirement.

What Will My Social Security Benefits Be?
If you paid into the Social Security system for more than 35 years, the Social Security Administration only uses the 35 highest earning years and won’t include any others in its formula. If you didn’t pay into the system for at least 35 years, a value of $0 is entered for all missing years. After you apply for benefits, these earnings are indexed and used to calculate a “primary insurance amount” that shows the maximum sum you’re eligible to receive after reaching full retirement age. The age when you begin getting benefits is also significant. As of 2018, the youngest age to receive benefits is 62. However, your benefits are reduced if you opt to get them that early. But if you take benefits prior to reaching full retirement age and continue to work, you may be able to delay some benefits to get higher payouts in the future. These days, many folks are working into or beyond retirement age. If you are earning an income while getting Social Security benefits, you may have some benefits withheld if you make up to a certain threshold. Until you reach full retirement age, earning more than the IRS income threshold decreases your benefits by $1 for every $2 earned in excess of the minimum. That money isn’t lost forever. Instead, your Social Security income is upped once you reach full retirement age. Under normal circumstances, your Social Security benefits aren’t taxable. But if your income while taking benefits is more than the maximum limits established by the IRS, your benefits will be partially taxable. Nonetheless, no one has to pay income taxes on more than 85% of benefits.