Life is a stage what's your curtain Part IV

The Final Curtain (66 to ?)

People at this stage of their life have (fully) retired from work already. At this stage, the person has hopefully built a large enough nest egg to provide for his own health care costs, his daily living costs, and other things he might do - like traveling.

This stage is called the final curtain because this is the time in a person's life when he reaches the twilight of his life. He only longs to leave a good legacy for his children and grandchildren. Time is spent with them, especially the grandchildren.

Expenses at this stage of life tend to be on the high side. This is mostly due to the health care costs of the person. Health costs are monthly, give or take. So this means, going back to what we established earlier, it's important to have a monthly cashflow coming in.

Remember, the focus during our younger years should have been about how much cashflow you want monthly at this age, not how much lumpsum money you want. Your investments should be providing you monthly stipends at this stage. A good example of this would be pension plans. Pension plans can be arranged so that you get a guaranteed cash flow per month.

The problem with pension plans is that their rates are just slightly better than long term time deposits. However, do note that it's guaranteed and tax free (at least the proceeds that will be given to you).

Not only that, estate planning should have been done prior to this stage in a person's life, especially those who belong to the upper crust of society. Remember that cliche, "The only thing certain in life is death and taxes"? Well, even on the person's death, the tax man cometh. They come in the form of charging the person estate tax. The estate tax is computed based on the total assets a person holds.

There are many shields (and lawyers) who can skirt around the law using the law (ironic isn't it) so that their client pays the least, if at all, estate tax. For the rest of us, who can't afford a lawyer, we can protect ourselves (and spare our loved ones from shelling out money to pay for it) via insurance. The insurance coverage the person has should ideally be able to cover for his estate.

And since we are on the topic of insurance policies, it is also important to note that the person, if he/she had invested in a life insurance policy, can redeem the policy's cash values for added cash flows. At this age, I can assume that the policy has already been fully paid up so that even if the person withdraws the cash value, he'll still be protected.

Not only that, we must assume that the person also has his memorial plan already. This is a morbid topic really, and is not really suited for everyone. But, some people find it practical to buy a plan while they are younger because at the end of the day, a plot is still real estate - and historically, real estate prices go up. You also have to consider the casket, trees are in short supply remember? So you get them at the current price because you know later on, it'll go up anyways, so cost-wise, it's a practical choice to settle on a decision earlier.

While we are young, we tend to think of the short term. What we'll do for tomorrow, next week, next month. Rarely do young people plan ahead in terms of years. If we view our life as a play, then we realize that we have a beginning and an ending. The question in all of our head should be how long does the play last? And if it is cut short, are we prepared?