Jun 17, 2016 | aging, elderly, finances for elders, long term care, medicare, seniors finances
Some people assume that we’re all living longer so it must be because we’re healthier, right? We are indeed living longer than ever due to advances in medicine and technology but what is the condition we’re in with longevity? It’s not true that we’re living healthier than the prior generation.
If you help clients plan for retirement, consider that things like obesity, in 30-35% of Boomers, are going to affect whether they need to pay for lots of things Medicare does not cover. Obesity is frequently associated with significantly greater risk for heart disease, strokes and diabetes. Boomers have the highest rates of obesity of any age group in the U.S. If you want to pick conditions that are most likely to result in the need for long term care, all of these are among them.
Retirement planning can be very tricky when it comes to considering the cost of long term care. Most people don’t want to have a conversation about what would happen if they became disabled. Most would rather change the subject quickly if the issue of possible diminished capacity is raised. “That’s not going to happen to me!” is the expected response. But the risk is real, and there are plenty of statistics to support an analysis of what it costs to care for a person with disabling health conditions.
According to the Genworth Cost of Care Survey, which comes out annually, 70% of people over the age of 65 will need some kind of long term support as they age. At AgingInvestor.com, we recommend that every financial professional have the latest study on hand and that you share it with your clients when you do retirement planning. Chances are they are not as healthy as their parents were. And what kind of care will they need?
Most people want to stay at home as they age. Many will use home care services to be able to stay at home. Here’s an example. My now 93 year old mother in law, Alice, has had numerous hospitalizations of late, for blood pressure issues, the flu and other problems. She simply isn’t safe living independently at home as she recovers and a home care worker is coming in every day for now at a cost of $25 per hour. That cost is not paid by Medicare.
She’s a good example of how we can need care with advanced age even if we do things right. She has always taken good care of herself, doesn’t smoke, doesn’t abuse alcohol, exercises regularly and keeps her weight in normal range. And yet, after this recent bout of illness she needs 24/7 care for a time. We hope she stabilizes with all efforts but there are no guarantees. Home care could be needed indefinitely at a cost even part-time of at least $20,000 per year.
The extra $20,000 she may need is for someone who has neither heart disease nor diabetes. Those put a person at even greater risk of needing expensive care. So for the financial advisor, the takeaway message is this:
Expect that anyone who reaches the age of 80 will be much more likely than not to need cash to pay for help of some kind. If your client is overweight or obese, the risk is very high. Ditto if your client smokes. Be sure to plan for assets that will be liquid enough to cover what your client may need in those later years. It’s up to you to educate that client to be realistic about future financial needs.
Educating your clients about issues that will likely affect them is just what the regulators want you to do. You can find out more about regulatory recommendations for senior clients and get ahead of any mandates from them in Succeed With Senior Clients: A Financial Advisors Guide to Best Practices. Get your copy now by clicking HERE.
Jun 17, 2016 | aging, diminished cognition, elderly, scammers, senior investor, seniors finances
Howard, 92, loves women. He has dementia and is legally blind. He likes to give women checks when they tell him their sob stories about needing money. He has one daughter, Missy, who is aghast at his conduct.
After her mother died, Missy felt obligated to try to keep Dad from throwing away all his money. He would use up everything in the checking account and then use credit cards to the max. He got into debt. Missy warned him and warned him, but he just didn’t get it. She had no legal authority to stop him from his stupid decisions about money.
He got a housekeeper, Flossie, recommended by the manager of his building. Flossie didn’t have much money, and needed to get her car fixed. She hit up Howard and wrote herself a large check from his account, which she had him sign.
When Missy confronted him about giving Flossie money, he lashed out and tried to hit her. He had a history of violence and Missy was fearful as well as very angry. Dad had given away cash to five other women before Flossie!
Finally, Missy was able to get the checkbook away from dad and no one else could write checks for this blind man to sign. He was now out of money. She had not taken legal steps to do this before he was broke. Not smart.
Flossie decided she was “in love” with Howard. She assured his daughter that she just wanted to be with him but they weren’t going to get married. Then Howard took a fall, was hospitalized and soon after, went to a nursing home. Flossie kept hanging around. One day, she went down to City Hall and got a marriage license. She never told Missy. She found an officiant for marrying them and had the ceremony right there in the nursing home.
Missy was beyond furious. She had reported Flossie to Adult Protective Services. The worker told her that Howard was “entitled to his folly”. She thought that was just plain stupid. She was advised that she could go to court and get a guardianship over her Dad. But, he had no money left and it seemed pointless by then. It was going to cost thousands of dollars too.
She sought advice at AgingParents.com. Mediation of the dispute with Flossie was suggested. Missy and Flossie both agreed to talk over the problem.
Missy wanted to have the marriage annulled. She wanted Flossie to be able to visit Howard, as he did seem to like her company and he was lonely. Missy and her husband had a suspicious and mistrusting relationship with Flossie, but in a way she was actually helping them by keeping Howard company while they were at work. Flossie didn’t want an annulment. She liked the idea of being married. Apparently, she didn’t consider Howard’s credit card debt. She just wanted to get something from Howard, like his Social Security survivor’s benefits.
The dispute was mediated without involving lawyers or the court. Missy proposed that she would allow Flossie to continue to visit Howard as she wanted. But, she was to refrain from discussing money and would report to Missy. When Missy asked Flossie if she was going to pay her Dad’s credit card bills, Flossie blanched. Suddenly, she seemed a lot more interested in the annulment.
She agreed to Missy’s conditions. A deal was worked out between them with the mediator’s help. Flossie agreed not to tell Howard about the annulment. He had been declared incompetent long before, and would forget what it meant anyway. Flossie agreed to the legal annulment. In exchange, Missy and her husband agreed to attend a “marriage” ceremony between Flossie and Howard at Missy’s home, without any paperwork, without it being legally recognized, and Howard would be none the wiser. Flossie could play married, without any legal consequences good or bad. Howard would still have Flossie’s companionship and Missy was okay with that.
The resolution gave everyone at least some of what they wanted. Before it got as far as it did, however, Missy might have tried other options.
By the second or third time a woman had ripped Howard off, she might have worked on persuading him to give her a Durable Power of Attorney for finances. She could have moved funds out of his checking account and stopped the ripoffs by his “girlfriends”. He eventually did sign one, but it was too late to keep his funds in the bank when he did.
She also could have gone to court for that guardianship. His doctors were cooperative in declaring him incompetent to handle money. Guardianship was a last resort, but it would have protected him. He ended up on Medicaid, in a 3 bed room in a mediocre nursing home. He will likely stay there for the rest of his days. Guess that’s how it works when one is “entitled to his folly”.
I’m hoping that anyone with an aging parent who is like Howard will look ahead. Sometimes, your aging parent makes a string of stupid decisions and you can’t stop them. But sometimes you can stop the folly before it’s too late. If you don’t know what to do, seek some outside advice.
Until next time,
Carolyn Rosenblatt
AgingParents.com
Jun 17, 2016 | aging, aging investor, diminished cognition, senior investor
And yet, these elders seem so oblivious. If you point out logically that they’ve forgotten the earlier phone call, there will either be an embarrassed excuse or a denial. Even if you read her your notes of the earlier phone call you both had and that the question was answered, she will not going to accept that and she might get very angry with you for suggesting that she isn’t fine. Why is this? Why can’t a person who is forgetful just say it and admit it? Are they being purposely difficult?
