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How fear of death can present a hurdle to retirement planning

A new study has found that many people fail to make necessary decisions about the future because they are too scared to think about death. According to researchers from Boston College in Massachusetts, fear of death causes individuals to avoid preparing financially for old age. The anxiety can affect choices about managing savings for retirement, purchasing life insurance, estate planning and drafting wills.

Study co-authors Linda Salisbury and Gergana Nenkov, both marketing professors, wanted to investigate why many individuals do not invest in annuities. Annuities provide a steady stream of income during retirement while individual retirement accounts (IRA) do not.

In one of four related experiments, the researchers asked participants to imagine they were 65 years old and starting retirement. One group was asked if they wanted to put their savings into an IRA, while the second group was asked about an annuity. The participants’ thoughts were analyzed afterwards. The researchers found that only one percent of those examining IRA options had death-related thoughts in comparison to 40 percent of the annuity group participants.

The findings were published online in the Journal of Consumer Psychology. They suggested that in contrast to IRAs, annuities force people to think about their life expectancy in order to calculate their potential payments. As a result, individuals may put off planning for the important life phase of retirement because they are reluctant to decide how long they expect to live.

The researchers suggested financial planners should use simple strategies to help individuals cope with any anxiety that may arise from thinking about death. In addition, viewing estate planning as a tool for helping heirs and family members rather than as a way to prepare for one’s death is likely to make planning for the future seem like less of a daunting prospect.

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The difference between conservatorship and guardianship in California

Every individual hopes to live an independent life in which they are able manage their own affairs. However, mental or physical incapacity may leave a person unable to make informed decisions for themselves.

In such cases, conservatorship and guardianship are legal tools that can be used to help protect an adult or child’s wellbeing. Both involve court proceedings in which a judge gives an appointed conservator or guardian the responsibility for making various decisions on an incapacitated person’s behalf. Such decisions may be of a legal, medical, financial or personal nature.

In California, guardianship refers only to the court appointment of an individual with the legal authority to represent and manage the affairs of a minor child. Conservatorships are for protecting incapacitated adults and typically involve matters related to health care and estate. Many states use the term “guardianship” instead of “conservatorship” when referring to the same duties for adults. In these states “conservator” refers to someone appointed to only handle finances.

California courts typically establish guardianships if both parents are unable to provide a child with a safe and secure home due to death, mental disability or other circumstances. Such arrangements allow a guardian to make decisions for the child until they are of legal age to care for themselves.

The need for conservatorship may arise if an adult individual experiences an injury, accident or other health event that causes them to become incapacitated. They may also require assistance in various areas of life after becoming mentally incapacitated due to disability or old age.

The process of issuing a conservatorship or guardianship is often difficult, costly and time-consuming. Conservatorship should be viewed as a last resort when a Durable Power of Attorney or Advance Health Care Directive has not been signed. Otherwise, it can impose significant limitations on a person’s ability to maintain their independence and freedom.

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