Oct 20, 2022 | aging, aging in place, cost of aging, cost of long term care, finances for elders, financial advisors
Carolyn L. Rosenblatt, RN, Attorney, AgingParents.com
Every year since 2004, private long term care insurer, Genworth has conducted a national survey to determine the average costs of care at home, and in facilities. The data is broken down by state, with the median price listed. The bottom line: the cost of care is rising significantly in all the four general areas Genworth studied. It is also rising in the areas it did not study. Inflation is affecting how much it costs elders and families to keep them at home or in any living situation. The Genworth study includes home care, adult day health, assisted living and nursing homes. There is a lot more to consider than what the Genworth study shows. Long-term care is not limited to the things this insurer pays for when you buy a product from them.
The median monthly costs in the U.S. for two of the services studies are outlined in the 2021 report from Genworth:
Homemaker services (help with cooking, cleaning, transportation, shopping, etc.) $4957
Home Health Aide (personal care: eating, bathing, dressing, walking, bathroom, etc.) $5148
In a book we wrote for financial planners, Hidden Truths About Retirement & Long Term Care (AgingInvestor.com, 2017), we detail how about 70% of us are going to need some kind of long term care in our lives. And we discuss how most of us live in The Great American Fantasy that it won’t happen to us, that we will be fine and die quietly in our sleep at age 100 in full control of our faculties. In the book, we urge financial advisors to help clients get out of fantasy and into the reality that dollars need to be set aside to pay for what Medicare does not cover; so called “custodial care” that is not medical in nature. That includes things like home care workers, home modification to accommodate disabilities, assisted living and other things many people eventually need. We discuss the advantages and disadvantages of all the choices.
Here are actual costs we learned about from clients in two real cases.
Four Years of Home Care
One of them, described in our book from 2017, was about a man who lived to be 95 and never wanted to be in a facility. His wife hired caregivers to keep him at home. Long term care insurance defrayed some of the cost but most came out of pocket. The bill for the 24/7 care he received over four years of increasing dependency: $2M. There was nothing unusual about his needs. He just got more frail and had more care issues over time. That’s typical of how some of us are going to age. At the end, he had four caregivers in shifts, a specially fitted van with special wheelchair, a home stair chair, a lift to get him into the bath, numerous other kinds of devices to help and huge increases in the cost of maintaining the home with all the help. That cost would be significantly higher in today’s dollars.
The Outrageous Cost Of A Difficult Elder’s Care
In another, current case we work with at AgingParents.com, there is an elder with unusual needs. The family has a very difficult mother with dementia. She is calm until certain personal care must be given. Her mental state is confusion. She hallucinates and thinks she is being attacked when the family member or paid caregiver attempts to clean or bathe her. She gets very combative, with kicking, biting and punching those next to her. She calms down after the personal care but it takes two people to keep her from hurting anyone. She is astonishingly strong for a woman in her 80s. Her physical assaults happen multiple times a day when she needs cleanup. The family will not put her into a care home. No home would accept her this way. Rather, they would medicate her into a stupor so she would be more manageable. The family won’t have that. Her lighter medication at home allows her to be engaged with those around her in a good way. All except at those time of the close personal care.
This family is paying $50,000 a month for home care workers from two different agencies to help them. They can’t do it alone. They can’t manage with just one caregiver at a time. It takes two at a time to do the job. The cost is draining their assets and there is no end in sight. As this keeps up, the family will be spending $600,000 in 2022 to care for their mother.
Assuredly, not every elder is as difficult as the combative and confused mother in this case. But some elders do become very hard to care for. If one has strong feelings about not over-medicating a loved one, the choices can get very expensive.
It can take a good strategy to manage the care of an elder at home. It is not as simple as just buying long-term care insurance when the elder still can qualify for it. It may take working with a competent financial planner who understands that the limited things this insurance pays for do not fully protect anyone from out-of-pocket costs. Many additional things may be needed to maintain an aging loved one at home, where most people want to be. Financial planners tend to promote having income to pay for “the lifestyle to which you are accustomed”. No one is accustomed to a lifestyle of needing 24/7 care at home. However that is a reality anyone needs to discuss with a competent financial advisor, as it can happen to any of us.
Overall, this is a wake-up call for anyone who has not thought through how to pay for long term care. If it is your own aging loved one, you can’t ever be sure that they won’t need assistance from a paid source in the future. If it is yourself, at or near retirement age, be wise about how you look at the need 70% of us may have as we get older. Long-term care can be simple for some. It can be a huge, heavy burden for others. The wise retiree will consider the risks of getting old, living long and the likely need for paid help at some time in their future.
Sep 5, 2019 | aging, aging investor, cost of aging, declining health, diminished cognition, elder investor, elderly, finances for elders, financial advisors, financial capacity, financial elder abuse, financial judgement, handling money for seniors, investor
Attempts to scam money from seniors never stop. And the thieves keep getting better at thinking up ways to extract information from older folks. Here’s another one—a different phony Medicare trick.
People hear ads on TV about genetic testing and how it can predict disease and protect them. They also hear ads that they’re not getting all the Medicare benefits they deserve. Who doesn’t want to get all the benefits they should get? It’s a perfect moment for scammers.
They may call your retirement-aged client and tell them that new genetic testing is available that Medicare will pay for, worth thousands of dollars. Of course, all your client has to do is to give them their Social Security number and the free testing kit, signup papers, or other inducement will be mailed to them immediately.
Let’s be clear: Medicare does not pay for genetic testing as a “new benefit”. If for any reason such testing were needed, a physician would order it and explain why it was needed. Such testing would not be ordered without any discussion with one’s MD.
Your client should never, ever give out a Social Security number or other personal information such as date of birth or address over the phone. Your client must never accept a genetic testing kit not ordered by one’s own doctor. If it is accepted and the cheek swab, DNA test or anything else is given to the sender, your client may be billed directly, potentially incurring a debt for thousands of dollars. It would be a sad day for your client to mail in a claim for reimbursement to Medicare for a fake benefit and realize that the claim is denied. They’re on the hook for the full price.
These kinds of scams are used to get information to commit identity theft and Medicare fraud. No matter how smart your client is, anyone can be caught off guard and tricked.
What Advisors Can Do
Here are some ways to let your client know you care about their financial safety.
- Prepare a friendly form letter to send to all clients over age 65 and inform them about this scam. Warn them not to fall for it.
- Keep abreast of all the latest scams in over 30 categories at the Federal Trade Commission, which explains what they are and how they work. Keep clients advised.
If identity theft has happened, direct your client to the Federal Trade Commission website for instruction on what to do.
Carolyn Rosenblatt, RN, Elder law attorney, AgingInvestor.com
About Carolyn Rosenblatt and Dr. Mikol Davis
Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 34 years.
Jul 11, 2019 | aging, aging in place, cost of aging, diminished cognition, elderly, health, resources for senior, resources for seniors, retirement planning
Does The Advisor Have A Role With Aging Clients Who Become Unsafe Living Alone?
Carolyn Rosenblatt, RN, Elder law attorney, AgingParents.com
You’ve known the client for many years. As time passes and she lives longer than she thought she would, you see her inevitable decline. She loses her husband, on whom she depended. She doesn’t want to move to assisted living or anywhere, even if you think it would be best for her. Her vision is dimming and her hearing isn’t good either. She has refused all help even when you reassured her she could easily afford whatever she needs.
Is there anything you can do? You care about the client but you’re used to just managing the money, and it isn’t clear that you are obligated to go beyond that. But you know that your client just isn’t safe alone anymore.
In these situations, the most competent advisors and wealth managers can feel conflicted about their roles. They have over the years come to know the client well and there is a sense of wanting the client to be safe. At the same time, maybe it’s not an advisor’s problem. What about the family? What if there is no family?
The first thing every advisor should do is what the regulators make optional for you: “try” to get a trusted third party contact. From our vantage point at AgingInvestor.com and AgingParents.com, we think it’s ridiculous to consider it an option rather than a requirement to get a trusted contact on file. The advisor can be more trusted than family in some cases and has a unique vantage point. YOU are the one who may be first to see your client’s decline and need for greater safety in the client’s living situation. You need to have someone to call. If it’s family and they are willing to step in, good. If there is no family, the client must be advised to hire a licensed person who is capable of overseeing their care if needed and to assist with day-to-day finances. The term “fiduciary” has a different meaning in the context of your industry, but outside it, a fiduciary can be a person whom the state licenses to manage money for someone who is not able to do it alone. They serve in the capacity similar to that of a conservator, guardian or power of attorney appointee, but the aging person still maintains some control as long as he or she remains cognitively intact. For those with no family a licensed fiduciary can solve the question: who can the client count on to help?
Even when there is family the aging client can still resist moving to a senior’s apartment in a community rather than struggling on living alone. It happened in our own family. It took two years for Dr. Davis’ mother, Alice to make up her mind to give up living alone in a house. To see a short video, Alice's perspective of her decision. Click HERE.
At age 90, she had vision and hearing problems, arthritis, leg pain, unstable blood pressure, kidney and bladder issues and she took 14 pills a day. That by itself was not enough to get her to agree to move. She ultimately reached the decision because she got tired of the daily difficulty she had trying to maintain independence.
Even with your efforts to persuade a client that he or she ought to consider some new choice like assisted living, remember that a person who is competent can’t be forced to move anywhere. Logic has nothing to do with the fear of losing one's independence. But keep trying and do work with the client’s family on a joint plan to help your client get to a safe decision.
What Action Can You Take?
Can you tell your client’s family about your observations? We see no ethical dilemma at all here. This is not about financial matters necessarily though it can be. The cost of moving and paying for care is a factor. But no one says you have to talk about what’s in your client’s portfolio. To be in the best position in anticipation of a client who is declining with age, get your client to identify any family or friends who could be called upon “in case of emergency”. Get more than one trusted contact. If you have a few people on the list identified by your client, call a phone meeting and discuss strategy. Gentle persuasion can work over time as it did with 92 year old Alice, who finally decided to move into a senior’s apartment. She was mighty stubborn but it did work out in the end, absent disaster. We were fortunate.
The takeaways from AgingInvestor.com:
Anticipate that long-lived clients may become unsafe living alone. Most people over age 80 need some kind of help in their lives.
You as the trusted advisor can be ready for age-related decline in your clients by having several trusted contacts in your client’s file whom you know and can call upon when safety is an issue.
If you become aware that your client is losing independence and should not be living alone, call a phone meeting with the trusted contacts to develop a strategy for working together to help your client make a good decision about moving or bringing help in.
Expand your role of merely managing the money and use your position of trust to help your client and the family keep the client physically safer.
If this all seems to be an awkward and uncomfortable thing to address, get a consultation from experts on aging at AgingInvestor.com. Our nurse-lawyer, geriatric psychologist team offers you expertise in how to approach a problem with an unsafe client and even what words to use to help them with important safety decisions.
May 6, 2019 | aging, aging investor, elder investor, elderly, finances for elders, financial advisors, investor, resources for senior, resources for seniors, retirement planning, senior investor, seniors finances
Retirement For Clients With Modest Portfolios—Making Money Last
By Carolyn Rosenblatt, RN, Attorney, AgingParents.com
The U.S. Census Bureau projects that by 2060, nearly twenty-five percent of Americans will be age 65 and above. At the same point, the number of people age 85 and older will triple. What will they all be doing in those long retirement years? If they live into their 90s, will they run out of money?
Many who have not saved enough ultimately find new jobs. Working in retirement is something to discuss with clients who are aging, have set a retirement date and have no answers to what happens if they outlive their savings. The advisor is not a miracle worker who can stretch their dollars beyond what is reasonable with prudent investments.
Maybe some clients will consider seeking a “not too big” job that is relatively easy, compared with what they did in a prior career. For the advisor with a client whose invested assets have a predictable length that does not match life expectancy, it is wise to help them plan how to keep their dignity as they live longer than they thought possible. That is through producing some earned income, even if modest.
If an older client is determined to retire from a stressful job, that’s fine. No one needs high pressure forever. But every job is not stress filled and some are more satisfying than others. The stereotypical image of a retired elder serving fast food is not for everyone, especially for educated clients who may have more interesting choices. For some retirees, long stretches without structure lead to isolation, boredom and even to depression. The routine of some kind of work relieves that risk and can bring enjoyment a person never had in the prior career.
Some may need the double benefit of bringing in money while finding ways to be with others. Elders certainly don’t need to go from one job to another at the point of retirement, but the holistic retirement plan for a person with modest investments should include some form of earning money through work. Your client may expect that family is willing and able to provide financial support if the client runs out of money. This prospect does not appeal to many younger families who are still supporting their own children and saving for their own retirement. They fear the idea of having to support aging parents and rightly so.
Imagine a client finding something to do in retirement that pays and something the client likes. Here’s an example.
My 30-something daughter is a regular Uber user who likes to converse with her drivers in San Francisco. She reports that three of her drivers in past two weeks were over age 65. One was age 80. He told her that he had retired from a union job at age 65. His wife had passed away and he got withdrawn and bored, having no sense of purpose. He worked part-time as a warehouse floor worker and cashier. He liked the walking and being around people. He worked another few days a week driving which he enjoyed because it kept him sharp, using the app, navigating around the city, keeping track of the best ways to get places, and most importantly, he liked chatting with his passengers.
Longevity creates a pool of older workers available either part-time or full-time, not necessarily expecting a benefits package and having no lofty career aspirations. Employers in a broad variety of service fields can benefit, as can the potential workers. We have met elders at AgingParents.com who have gotten a teaching credential after retiring from a high pressure career and are happily teaching part-time. We have found others who are mentoring in businesses, working in nonprofits, doing childcare, working in retail and otherwise using their natural talents while earning a paycheck. These were all part-time positions and all were glad to be doing them.
Discussing the possibility of working with your older clients should include when in retirement the client should consider doing it. Physical and mental loss of ability can preclude work of any kind, even volunteering. They can’t necessarily count on being able to work in the later years of retirement when they may run low on cash. Someone might be fine at 70 and impaired at 85. The time for planning an appealing part time job is in the earlier stages of retirement when the client is feeling good and is not impaired by health problems.
If your client has a modest portfolio that with a conservative drawdown would only last 20 years and life expectancy is 30 years, you need to encourage working. Take the axiom “know your client” to a realistic individual plan for living long with sufficient means.
If you have trouble with these sometimes emotional, difficult conversations, contact us at AgingInvestor.com for a private one-on-one consultation so you can get the job done. Click HERE to find out more how we can help you.
Feb 21, 2019 | aging, aging investor, cost of aging, cost of long term care, declining health, elderly, finances for elders, financial advisors, handling money for aging parents, handling money for seniors, health, long term care insurance, resources for senior, resources for seniors, retirement planning, senior citizen investor, senior investor, seniors finances
It used to be that we could think of retirement in a kind of predictable way. People lived into their 70s perhaps, and we measured retirement by that. We used tables, algorithms and other tools to tell us how much we should save and how much we could spend in retirement. And it was all based on assumptions that may no longer apply.
Life expectancy for a woman in the U.S. in 2018 was 84 years. For a man, the figure is 80 years. Those averages do not take into account the fact that well educated and financially secure people live longer than average. This is presumably based on the notion that people who know what a healthy lifestyle is and who can afford the best medical care will outlive those who do not have those advantages. In my own county, for example, which has a high proportion of elders compared to other counties in California, one wealthy city shows a life expectancy for men of 93 years.
Suppose that your aging client lives to be 93, having retired at age 65. That's 28 years of retirement. What the algorithms don't clarify is what you, the advisor needs to plan for with your client during the last decade of life, from 83-93. No formula is going to help you with the individual discriminations you need to make concerning your client's risks for care and how to assess and plan for them. They can be a substantial cost, out of pocket, not covered by Medicare, and absolutely necessary.
The way we age is determined by two main factors: hereditary tendency and lifestyle. Our genetic makeup directs only about 30% of the equation. The other 70% is driven by the way we choose to live our lives. There are plenty of folks who think that a healthy lifestyle is just too much bother. They avoid exercise, eat whatever they feel like eating, never learn to manage stress and say they'd rather die a few years sooner than give up their habits, which their doctor advises against.
Here's the problem with that belief. Leading an unhealthy lifestyle does not just cause you to "die sooner". Rather, it may likely cause you to live with impairments, disabilities and a need for expensive long term care for chronic health conditions. These can go on for decades.
Take obesity, for example. Over two-thirds of Americans are overweight or obese. Obviously excess weight increases our risks for all manner of health issues, including diabetes, heart disease, high blood pressure, and strokes. When a doctor makes a diagnosis of one of these, the person doesn't typically just die on the spot and save a lot of expense later on. No. The medical providers will keep the person going with medications, surgery in some cases, lots of diagnostic monitoring and trips to the doctors. These chronic conditions usually lead to disability late in life, particularly when more than one of them exists in the same person.
If you have aging clients, you definitely need to understand health risks in a basic way, so that you can help your clients set aside funds for the care they are likely to need in the last years of their retirement lives. All of the chronic conditions I mentioned are manageable with an effort toward a healthy lifestyle but for those who do not wish to do the work involved, you can bet on a likely need for long term care. While you can't predict the future, you can plan for risk. It's what you do.
My own mother in law had high blood pressure and chronic kidney disease for decades. She worked vigorously at diet, exercise, social activities and other components of a healthy lifestyle. Heredity was not on her side. She lived to be 96. During the last 3 years of her life, she needed help. She moved to a seniors' community where help was available and eventually, she paid for private caregivers. Her cost of living at the last part of her life was $120,000 a year. If this were your client, would he or she have at the ready $360,000 to pay for care? How about if there was no pursuit of a great lifestyle? The care expense could easily be 10 years.
The takeaway here is that advising for longevity needs to include the skill of assessing fundamental health risks that create a need for out of pocket, long term care. You don't need to be a doctor and you can't predict everything, but you can do what is reasonable to help your client plan. Ask the right questions. Keep track of your client's general health picture.
To learn more about what to look for and what to ask, get Hidden Truths About Retirement & Long Term Care, available at AgingInvestor.com and on Amazon.
By Carolyn L. Rosenblatt, RN, Elder law attorney, AgingInvestor.com
