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I frequently read and review books for readers of my column. I recently read Retirement Watch: The Essential Guide to Retiring in the 2020s (Regnery Capital) by Bob Carlson, a retirement expert. I recommend it. 

Retirement Watch covers all the essential components of retirement planning, including the main reasons why some retirement plans fail, mistakes retirees make regarding healthcare expenditures, and ways to avoid tax ambushes.  

Carlson covers long-term care issues comprehensively, and he devotes a chapter to making efficient use of home equity. 

The chapter I found most valuable covered estate planning. Carlson emphasizes that estate planning is “much more than tax reduction and always has been.”  

He discusses in detail the key documents that are required in a comprehensive plan, and the purpose of each. Examples include your will, revocable living trust, power of attorney, medical directive, and letter of instruction and inventory. 

Letter of instruction 

This letter is an essential element of an estate plan. It should tell the executor and anyone else involved everything they need to know to manage your assets and estate. 

Lacking the instruction letter, the executor will likely spend months putting together the records needed to pay bills and settle the estate.  

Many problems are solved if you leave instructions for your spouse and other relatives regarding who should be contacted upon your death, the location of your will, funeral preferences and the like. You should also specify any outstanding debts, and provide contact information for all creditors. 

Also include financial account statements, deeds, and records of proof of ownership of vehicles. Provide a list of your attorneys, financial advisers, executor, life insurance agent and bank representatives. 

An inventory of assets should be available, including pensions, mutual funds, annuities, bank accounts, life insurance and Social Security benefits. There should be a record of the type of ownership for these assets.  

You should also include recent tax returns and the location of account statements. Leave a record of beneficiaries associated with any financial assets, such as IRAs and 401(k)s. 

Digital accounts 

It is important that the executor/spouse/family members have access to all your digital accounts, too.  

You should have available a complete record of all your email accounts with passwords. You should also document all passwords associated with your financial accounts, including mutual funds, bank accounts and brokerage accounts. 

An acquaintance of mine, who owned a great amount of assets, recently passed. He failed to provide the executor and beneficiaries with the necessary information regarding many of his assets and personal accounts.  

Because of the insufficient records, it took the executor several months — and unnecessary expense — before she was able to identify all the assets and take the necessary steps required to liquidate those assets when required.  

If this decedent had followed the actions Carlson recommends, he would have saved the executor and beneficiaries a great deal of unnecessary aggravation.

True success in retirement 

The last chapter of Carlson’s book discusses the major causes of retirement failure. The main point is that although solid finances are an important part of being independent and secure in retirement, they are not sufficient.  

The most important part of retirement is how you spend your time. Social interaction and a social life are very important for both mental and physical health. Having a purpose is important.  

You don’t need one “big thing” to establish purpose and identity in retirement. Most successful retirees engage in multiple activities. 

Personally, I have found volunteering in various activities has been very helpful to me. For example, for over 15 years, I volunteered as a court mediator. It was educational, and it even helped me win a significant personal court case. But it also allowed me to establish many new long-term social contacts. 

Bottom line: If you read Retirement Watch, you will learn a great deal about the most important financial aspects of retirement, obtain good advice regarding estate planning, and learn important non-financial lessons that will help you achieve a successful retirement. 

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com. 

© 2023 Elliot Raphaelson. Distributed by Tribune Content Agency LLC.