Living a Long, Happy Life Takes Planning – A Look at Aging & Eldercare
While we all want to grow older, we don’t necessarily want everything that comes with aging. According to the U.S. Census Bureau (2018), the median age of the U.S. population is projected to grow from age 38 today to age 43 by 2060. The Bureau further estimates those over age 65 will outnumber children for the first time by 2035. The great news: Americans are living longer! The caution: At some point, most of us who live longer will require some help with daily living tasks
We are believers in planning and know that planning for aging and all that comes with it is no exception. In fact, taking action while you’re young and healthy will likely help you enjoy your “sunset years” even more.
At Smith & Howard Wealth Management, our planning conversations with clients focus on saving for retirement but also include eldercare issues, whether for our clients or their aging parents or grandparents.
We asked Sarah Watchko, a founding partner of the Hill & Watchko law firm and a certified Elder Law Attorney by the National Elder Law Foundation, what some of the most common concerns of clients are when discussing eldercare issues. She gave us several:
- Paying for long-term care and the fear of “running out of money”
- Dealing with dementia and the inability to handle one’s own financial and personal affairs (and disagreements about whether the time is right to hand over control)
- Dealing with physical limitations, loneliness and isolation in the context of living arrangements for the aging
- Elder abuse: fraud and financial
- Transferring family wealth to the next generation: how, when and why
Each of these issues could be an extensive article by themselves. For now, here are some high-level thoughts on each to help start a conversation with your advisor.
1. Paying for long-term care/Running out of money: As with all planning, the earlier one starts a comprehensive financial plan, the better prepared they will be for the day care is needed. Being unprepared for covering expenses such as home care, assisted living, or nursing care can be far-reaching, affecting not only the individual’s life but their loved ones as well. Genworth’s 2017 Cost of Care Survey estimates the national median rate for care in an assisted living facility to be about $45,000 annually while a semi-private room in a nursing home is just under $85,000. From a personal perspective, 24-hour care for my father in his own home ran $15,000 per month, and that was after receiving Veteran benefits. So yes, start your planning now.
2. Dealing with dementia and the inability to handle one’s own financial and personal affairs: This is a very difficult and possibly the most stressful issue for loved ones. When is someone no longer able to handle their own affairs? How do you address this issue? Some of the signs to be aware of are forgetfulness, confusion, inability to take medications as prescribed, impaired driving skills and poor housekeeping. These signs can be subtle and progress slowly. Talking with parents about their potential need for eldercare or having conversations with our children about our own future care, will be much easier when all involved are physically and mentally healthy. Having conversations now to identify what kind of help may be needed and the wishes of the person affected will help the process go much smoother for all. Hold these conversations when everyone is relaxed, and don’t try to cover every subject in one conversation but use ongoing conversations. Be as open and straightforward as possible. Your advisors at Smith & Howard Wealth Management can help facilitate these conversations.
3. Dealing with physical limitations, loneliness, and isolation in the context of living arrangements for the aging: Regardless of how much we exercise, as we age we experience increased physical limitations and natural diminishment of vision and hearing. For many, this ultimately means reduced mobility – a frustrating “benefit” of a long life. It is important for senior citizens to maintain as much mobility and socialization as possible – this enhances and strengthens physical and mental health. Losing one’s spouse can not only amplify the feeling of isolation but can cause anxiety or depression. Part of the planning for one’s elderly years may include moving to a retirement community or assisted living facility designed to provide socialization, support, and access to healthcare professionals. We have seen where clients (or their family members) did not want to move into these types of living arrangements because it was “admitting they were old.” However, once they moved in, they acclimated quickly and reversed their opinion. The amount of social interaction was immediate and positive.
4. Elder Abuse: fraud and financial: As people enter their “elder years” there is a greater tendency toward trust and a high dependence on others, making them vulnerable to fraud and financial abuse. Other factors that may make them more vulnerable are the feelings of loneliness and isolation discussed above. Often, financial exploitation is perpetrated by a trusted person.
According to HelpGuide.org, a nonprofit organization created to help with mental health and wellness, some warning signs of financial abuse are: significant withdrawals from accounts, sudden changes in an elderly person’s financial condition, items missing from their home, suspicious or sudden changes to wills, power of attorney or titles, or financial transactions such as an ATM withdrawal that the elderly account holder could not have done. One suggestion to help prevent financial abuse or fraud is to create a strong support system. This establishes a way to keep an eye on elderly family members. At the end of this article is a website for the State of Georgia Department of Human Services that you can use learn about and report suspected elder abuse to authorities.
5. Transferring Family Wealth to the Next Generation: How, When & Why: The subject of how to leave your legacy to your family (or elsewhere) as it relates to eldercare may be less obvious. However, the earlier this subject can be addressed the less chance of abuse or one’s wishes being “misguided”. Developing a wealth transfer plan can help reduce family conflicts, make the transition smooth, reduce estate costs and taxes while preserving wealth. The first step is to know one’s priorities. Your advisor can help with this by listening and asking questions. The next step would be to engage an attorney that focuses on estate planning help with the proper documents. Your Smith & Howard Wealth advisor can provide referrals if you do not already have an estate planning attorney. Once the plan has been established regular reviews with your advisor can assure it still is doing what you want. Outside factors such as market, regulatory and life events can change your original priorities. For more insight on estate planning see our article “Five Common Estate Planning Mistakes”.
A common thread in addressing all these eldercare concerns is communication and direct conversation with family members and advisors. Here are some rules that can help all involved when having a family discussion:
- Start family discussions early.
- Don’t be afraid to ask detailed questions with those involved in the discussions.
- Allow the individual (s) involved to have the final say about their finances and care.
- As ideas and thoughts form, bring advisors and professionals into the discussion.
- Have multiple conversations rather than one all-encompassing discussion.
One of the most difficult feats is planning for the unknown needs and costs of eldercare but there are many tools and options to help. Our entire team at Smith & Howard Wealth Management is involved with our clients as we plan for and discuss the important elements of eldercare – whether it is for them or their parents. Anyone of us would be happy to sit with you to understand your concerns in this area and to work with you and your family to develop an approach that will bring each of you more confidence in your ability to enjoy the “sunset years”. Please call us at 404-874-6244 or email us here.
In addition, here are some reference websites that may be of help:
Rob Kaercher, Wealth Manager and Lisa Curles, Senior Client Service Specialist contributed to this article.