Planning for our senior years would be so much easier if we knew how long we will live and the state of our health toward the end of our lives. In my specialty of retirement planning, I have to ask my clients to ponder the imponderable: late-life care. In this article I share information about options and considerations for senior care when retirement dreams give way to the reality of a sunsetting life.
My client Lynn is a good example of someone who didn’t ponder the question: “What to do about mom?” Lynn never envisioned that her mother would quickly become so debilitated that she needed round-the-clock assistance with every day needs.
Lynn’s mother came from hearty stock. None of the other known ancestors had declined to the point of debility before their deaths. Lynn’s grandparents even took care of their final years by moving into a Continuing Care Retirement Community. With their dark humor, they referred to it as “the Terminal.” (I share Lynn’s experience with her permission.)
Considerations for Late-Life Care
Late-life care concerns may impact you and your own needs or your parents’ needs. There are so many options and it’s never too early to start learning about them. Take the time now to start thinking and talking with family, friends and partners about the next steps. What makes the most sense for one’s personality, lifestyle, ambitions and pocketbook?
Any step that calls for a change of residence will require downsizing. This can be among the most stressful stages for anyone. The physical demands of packing and moving are daunting enough, but disposing of a lifetime of possessions can be even harder emotionally. The internet offers plenty of advice on how to downsize, and there are companies that also provide the service.
Aging at Home: It Takes a Village
Staying At Home may be the option preferred by most. By 2038 there will be 18 million households with people over the age of 80 and more than half of those are expected to be living at home alone. How can one age in place safely and comfortably? Considerations range from remodeling to accommodate bathroom access, a bedroom on the main level, ramps to replace stairs, even lower kitchen counters. In this scenario, help comes to the house, once a day or for 24/7/365 care. Technology and artificial intelligence offer resources for staying at home, such as the empathetic virtual companion ElliQ.
To successfully Age at Home, support services are required in your area. The Village Movement has inspired networks of caregiving across the country, occasionally with volunteers. Here in Summit County where my practice is based, our Senior and Community Center offers a variety of services from free lunches to meal delivery, mobility buses, caregiver support groups, durable medical equipment rentals, friendly check-ins, and evening activities.
Making the Move to a Care Facility
For those ready to make the move, Active Adult Communities (AAC) provide maintenance-free living, recreational amenities, and organized activities. Most AACs offer no other services for aging clients, though some may be associated with facilities that offer continuum of care. The Fair Housing Act allows communities to exclude younger people to focus on lifestyle and security concerns for those aged 55+ and for 62+. When more care is required, the resident will need to move again. AAC rents are paid monthly without upfront cost. For mountain dwellers, there are no options yet for active communities, though Colorado’s Front Range offers several.
Independent Living introduces the first in the steps of care that will likely be needed as we age. Independent Living is intended for seniors who are active, able to care for themselves and cover their daily needs. Unit configurations recognize the need for ease of mobility and are usually set up with wider doors, lower countertops, and communication systems. Amenities are similar to AACs, and may include optional meal service and housekeeping. Unlike AACs, Independent Living facilities are associated with other senior facilities to ease the transition to more intensive care. For most Independent Living arrangements, rents are paid monthly without upfront cost. For those who want to stay in the mountains, options are still very limited.
Assisted Living is for those who can no longer live on their own, but who do not need consistent nursing or medical care. Activities of Daily Living (ADLs) typically define those who need Assisted Living, such as requiring assistance with everyday routines: eating, bathing, toileting, dressing, and transferring to and from a wheelchair or bed. Many families begin the search for Assisted Living when a crisis hits, making it difficult to choose wisely.
Memory Care units bridge the gap for those clients who may be able to take care of their basic needs, but need to reside in a secure facility for greater oversight or occasional wanderlust. Many facilities that offer Assisted Living and Skilled Nursing also provide a Memory Care unit.
Continuing Care Retirement Communities wrap up all the needs and services into one bundle of care. Stepping from Independent to Assisted to Memory Care to Skilled Nursing in one familiar facility can offer a great relief to families and seniors. For more on CCRCs, see this article from RightPath.
Skilled Nursing offers round-the-clock care for the most aged and infirm. Nursing facilities may be stand-alone or associated with other care communities. For those unable to pay for skilled nursing in late-life, the federal government provides support.
Paying for It All
In retirement, monthly living expenses typically drop over time as people slow down and lead a less-active lifestyle, then ramp up again to fund late-life care. This arc of living expenses is known as the “spending smile” though the concept offers little to smile about when the cost of care becomes a financial burden.
Few options exist for covering the expense of late-life care. One option is self-funding, something that only the truly affluent and those with sizeable retirement accounts don’t have to worry about.
For middle class families, the expense increase for late-life care creates a serious challenge. To cover the costs, a reasonably priced long term care insurance (LTCi) policy can be quite valuable.
Unfortunately, in today’s market, finding and obtaining a “reasonably priced” LTCi is especially difficult. Policies have multiple features and premium choices, varying from carrier to carrier.
Even folks who already have a LTCi policy are receiving premium increases in the “astronomical” sphere. Prices have increased largely because insurers have miscalculated the underwriting of these policies, mostly due to an explosion of claims for cognitive impairment and memory care.
Regulators are actually allowing price increases today with an eye toward managing future price increases, even though today’s price increases appear to be punitive. Ask yourself if you can afford NOT to continue to pay. Engage with a non-conflicted expert for advice before entering into a LTCi contract.
Financial planning for these late-life stages ideally starts sooner than later. Taking the time now to ponder the imponderable – where will I go over the stages of aging? – can provide great relief when the time comes to make a move or bring in more help. Please contact RightPath Investments and Financial Planning, Inc. for more information.