Authorpreneur Dashboard – Carroll S Golden
How Not To Pull Your Family Apart
Parenting & Relationships
"Carroll weaves her vast experience in long term care insurance and personal insights into the MUST-READ book! It is jam-packed with helpful information families and professionals need to know in order to make informed decisions about aging planning." —Annalee Kruger, President of Care Right Inc., and author of The Invisible Patient: The Emotional, Financial, and Physical Toll on Family Caregivers
Who’s going to be the physical, emotional, and financial caregiver in your family (no matter how you define family)? Few of us understand or are prepared for the breadth of lifestyle implications that come with that role. On the flip side, what if it’s you that needs care?
Meet the Jones family, a multigenerational example of how it all works in the real world. Follow Jodi and her family as they suddenly must deal with her parent’s extended care needs. Tension, guilt, and a lack of information start to impact Jodi’s health, happiness, job and family, relationships. Follow along as this multigenerational family uses my three-step process to create a Care Guide, a Care Squad, and a Care Planning Team. Learn how to establish a framework to start and continue conversations, minimize tension, and gain an overview of several planning options to fit almost any budget so you’re ready for tomorrow.
Book Bubbles from How Not To Pull Your Family Apart
Harsh Math for Seniors
For Seniors hoping for a big boost in their Social Security check next year, here’s the truth: rising Medicare premiums are about to eat up most of that increase. Here’s the breakdown: ???? Social Security’s cost-of-living adjustment (COLA) for 2025: +2.5% ???? Medicare Part B premiums: +5.9% Let’s crunch the numbers using 2024 as a baseline: ???? Average Social Security check: $1,900 ???? Medicare Part B premium: $174.70 and a deductible of $240) ➡️ What’s left? $1,725.30 Now 2025: ✅ COLA adjustment: $1,947.50 ⬇️ New Medicare premium: $185 (an increase of $10.30) and a deductible of $257 (an increase of $17) ➡️ What’s left? $1,762.50 (and $1,745.50 if we include the increase in the deductible) ???? Net gain: $37 or $20. That’s it. How are you preparing them for this reality? Let’s brainstorm solutions in the comments.????
It's That Time of the Year!
For clients trying to figure out what is the best election for Medicare coverages, it’s certainly not a holiday! Your clients may be asking you, their advisor, for some guidance on a very complex topic. • According to KFF research, the average Medicare beneficiary in 2024 has access more than double the number of plans offered in 2018. More than 2.4 million Medicare beneficiaries, in 29 counties, can choose from 75 or more plans in 2024. • The growth of Medicare Advantage, which boasted some 30.8 million people in 2023, accounting for $462 billion (54%) of total Medicare spending, is expected to continue to grow in popularity. Note that these numbers exclude employer or union-sponsored group plans, Special Needs Plans (SNPs), PACE plans, cost plans, and Medicare-Medicaid plans (MMPs) that are only available to select populations. • One big attraction is the availability of plans that charge no premium (other than the Part B premium) and may offer extra benefits such as, vison, hearing, or dental which are not covered by traditional Medicare. • The Congressional Budget Office (CBO) projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 64% by 2034. • HMOs account for more than half (56%) of all Medicare Advantage plans offered in 2024 but have declined as a share of all Medicare Advantage plans since 2017 (71% of plans), while local PPOs are rising as a share of all plans. Not a Medicare specialist? Let me suggest including one in your professional network!
Is 'Average' a Good Thing?
Well, it depends. When it comes to Social Security and its role in retirement planning, the answer isn't simple. For people who rely on Social Security as a significant part of their retirement income, "average" can mean different things depending on their unique financial situation. Even seasoned financial professionals can find it challenging to predict Social Security benefits with any degree of accuracy. But the more you know…..So, I’m currently pursuing my RSSA certification and let me tell you—it’s eye-opening. It reveals just how complex the Social Security system really is and how critical it is for both financial advisors and their clients to fully understand it. The takeaway? Whether you're a financial pro or someone preparing for retirement, it’s essential to either put in the work to educate yourself or connect with a specialist who knows the ins and outs of Social Security. For a deeper dive into how earnings can impact your benefits, check out this detailed explanation from the SSA: https://www.ssa.gov/policy/docs/program-explainers/retirement-earnings-test.html
Why are Advisors Expanding Their Role?
Fidelity's 15th annual Plan Sponsor Attitudes Study, which surveyed over 1,100 employers with retirement plans across different providers, revealed a major shift in the role of financial advisors. Nearly half of plan sponsors now see it as "very important" for advisors to provide guidance on health savings accounts (HSAs)—a 21% jump from just 25% in 2023. The study also highlighted a growing challenge in retirement readiness, with only half of employees retiring as planned by age 67. In fact, 23% are delaying retirement, with over 70% of plan sponsors citing insufficient savings as the primary cause. As a result, 83% of plan sponsors report being satisfied with advisors who actively promote retirement plans to their workforce. Expectations for advisors are rising. Many sponsors are meeting with potential advisors to stay updated on services and want advisors who understand their unique needs and tailor their advice accordingly. Those who offer more than just 401(k) plans are seeing higher satisfaction rates, helping employees better prepare for retirement. Right now, 81% of plan sponsors are highly satisfied with their advisors, up from 63% in 2019 and 76% in 2023.
'Tis the Season!' Say what?!?!
Did you spend time talking about the start of football season and miss that 9/6 was National 401(k) Day? Celebrated the Friday after Labor Day, this day is the perfect reminder that it’s never too late to start a conversation about planning for retirement.. As students head back to school and we settle into fall routines, it's a great time to kick off (couldn't resist!) discussions about retirement planning and the crucial role 401(k)s play in securing a solid financial future. Just like in football, timing is everything. The sooner you create a plan for clients to save for retirement, the better positioned they’ll be to accumulate the funds they’ll need for the future. So, even if you missed the official kick-off day, now is the perfect time to get into the game of talking about building long-term financial security.
Who's Going to Fill in the Gaps?
Given the difficulties many healthcare systems are currently experiencing in filling key roles, and projections suggest that these challenges are not going away in the foreseeable future. Mercer conducted a comprehensive review of available data and estimated future shortages (or surpluses) by occupation and geography. This report details insights on the projected supply and demand of multiple healthcare occupations (as defined by the Bureau of Labor Statistics) by 2028. Mercer's projections were made using historical data through 2023, with labor demand forecasted by analyzing industry-level trends and the prevalence of each occupation within the industry. A nationwide shortage of 100,000 healthcare workers is anticipated by 2028, with some states facing projected surpluses or severe deficits between future supply and demand. The finding comes from Mercer, which examined projected changes to the U.S. healthcare labor market by 2028 for states and metro and micro statistical areas. The report includes an interactive map illustrating various states data.
It's Disappointing but Please Don't Stop!
A recent report published in the Alzheimer’s & Dementia Journal indicates that researchers at Cambridge Public Health aren’t sure if Alzheimer’s disease drugs targeting amyloid protein will have a large-scale effect on reducing the disease. Trial participants represent less than 8% of people with early Alzheimer’s disease and were up to 10 to 15 years younger than those typically presenting with early symptoms and those with other conditions that could have contributed to symptoms. The authors wrote, “At a health system level, roll out of treatment even for only narrowly defined patient groups will involve considerable resources including personnel and profound opportunity costs. This will be extremely challenging for even the best-funded healthcare systems.” Despite the challenges, Alzheimer’s is a growing concern for many people, advisors, well, everyone. We hope and need the research to continue!
Employer Caregiver Support Boosts Wellbeing
The annual Mind, Body, and Wallet report by the Guardian Life Insurance Company of America, reveals that 35% of caregivers who receive employer support rate their emotional health as “very good” or “excellent,” compared to just 22% without such support. This trend is particularly evident among Gen Xers, who, for the first time in Guardian’s survey history, report worse financial wellbeing than Gen Z. Around 40% of the Sandwich Generation, which includes Gen Xers, report low mental (43%), financial (41%), and physical (31%) health. These challenges stem from their dual roles in caring for children and elderly or sick family members. The 2023 Workplace Wellness Survey (WWS) by the Employee Benefit Research Institute (EBRI) and Greenwald Research, “Shining a Spotlight on Caregivers in the Workplace,” finds that while caregivers and non-caregivers have similar household incomes and assets, caregivers rate their financial wellbeing lower. Caregivers feel less prepared than non-caregivers to handle a $5,000 emergency expense. They also experience more stress from prescription drug costs and medical expenses. Additionally, three-quarters of caregivers find it challenging to balance work and caregiving duties.
Olympians Aren’t the Only Ones Marathoning.
Grayce, a comprehensive social care platform for families, has released its 2024 Employee Leave Trends report, with new research revealing why, despite more flexible work arrangements, the number of employees taking time off for caregiving continues to rise. Caregiving is like running a unpredictable marathon. As a result, your client may find that caregiving, especially if they are caught in the ‘sandwich generation’, often necessitates unplanned time away from work, taking ad hoc days off rather than an official leave of absence. The report highlights that 71% of caregivers believe that having support for their care responsibilities could have helped them avoid or minimize time away from work. Key support interventions include addressing the cost of care, streamlining logistics, providing community support, and assisting with the research, planning, and problem-solving processes. This need for support spans all population segments and workforce industries, presenting a significant opportunity for employers/advisors who can offer help in finding or providing these services.
With No End in Sight
Debt.com’s latest research paints a grim picture. The number of Americans grappling with medical debt has reached a new peak in the past five years. Since 2020, Debt.com has surveyed 1,000 Americans each year about their medical debt. The recent findings? More people are saddled with medical debt, dealing with collections, and even avoiding healthcare because of their financial struggles. Debt.com president Don Silvestri offers some insight: "Unlike other consumer debts like credit cards, mortgages, and auto loans, medical debt doesn't play by the same rules. Those debts ebb and flow with the economy, but medical debt just keeps climbing. There’s no end in sight." • Key findings include: This year, 79% say “inflation has made it harder to pay their medical bills.” That’s a significant jump from 57% in 2022, the first year the question was asked. • 66% have “outstanding medical bills or medical debt.” That’s up from 46%, five years ago when the survey was first conducted. • Half (50%) have medical debt in collections. That’s up from 28% three years ago. • More than half (52%) “avoid medical care because of their debt.” Only 28% said the same in 2022.
The Marketing Popcorn Trap
To grow your business, you need a focused marketing approach. Too often, financial professionals get caught up in tactics like emails, Meta ads, and social media posts, missing the bigger picture. The best and most successful professionals think deeper. They avoid the trap of "Marketing Popcorn," where tactics are scattered and executed independently of each other with little or no cross-functional coordination. Instead, they prioritize strategy by asking critical questions: Who are my clients and what steps will get us where we need to be? Who do my clients include in their circle of influence? What are the planning occasions I can own and how do I organize them into an organized approach? A strategic approach doesn’t focus on you as the advisor. It’s about defining how you bring clarity to their problems and offering a clear path forward. By understanding and implementing a simple, shared roadmap with steps that lead to better communication, you build stronger, more impactful relationships. This creates a narrative of trust and confidence that resonates with your clients and their circle of influence.
Whose Working...and Why?
If you are a financial professional whose focus is retirement planning, this new research report, published June 6, 2024 by the Employee Benefit Research Institute (EBRI) is a must read. While it is not surprising that the report indicated that the labor force is aging, the research found that workers ages 65 or older make up a larger portion of the age 55 or older workforce than they did in 2000. The percentage of those ages 65 and older increased from 23% of the age 55 or older workforce in 2000 to 29.5% in 2023. “The movement of the Baby Boom generation out of the age groups younger than 65 has made the composition of the older workforce even older. At the same time, the older workforce is becoming more diverse, as a smaller share of White Americans comprise the ages 55 or older population. These are important considerations for employers to understand, as older workers and a more diverse work force calls for additional or new answers to the optimal design of employee benefit plans,” explained Craig Copeland, director, Wealth Benefits Research, EBRI.
What is a RBA?
In 1984, IBM froze its defined pension plan and introduced a new 401(k) plan. Defined contribution plans shifted the financial and longevity risk to individuals. However, many workers did not fully utilize the saving and matching benefits. To address this, the Pension Protection Act of 2006 (PPA) introduced eligible automatic contribution arrangements to boost participation in self-funded defined-contribution retirement plans. These arrangements allow employers to automatically enroll eligible employees unless they opt out. Then IBM, once again, overhauled its retirement plan layout. The company discontinued the 5% match and 1% automatic contribution to employees' 401(k) plans. Instead, effective January 1, 2023, IBM employees were introduced to the Retirement Benefit Account (RBA). The RBA is a hybrid plan combining elements of defined benefit and defined contribution plans. Effective Jan. 1, the company will put 5% into the RBA, essentially a pension plan that will pay 6% interest through 2026. This plan aims to help employees achieve their financial and retirement goals by providing a stable and predictable benefit, enhancing their retirement portfolios as part of IBM's Personal Pension Plan.
Retirement Reality Check: + A Dose of Humor
Envisioning your retirement is like trying to predict the weather a year in advance—challenging and full of surprises. Add to that the complexities of senior health needs, and it's like solving a Rubik's cube blindfolded. But fear not! Here are some fun ways to offer clients a reality check: Have your cilent Imagine living on what’s likely to be their fixed retirement income. Throw in a few curveballs, like the possibility of needing short, extended, or long-term care where they plan to retire. Or, better yet, hand them a list of thought-provoking questions to answer. Trust us, the responses can be as surprising as finding out your grandma’s secret cookie recipe includes kale.
Do You Feel the Shift?
The massive shift of wealth from the Baby Boomer generation to Generation X and Millennials is estimated to be around $84 trillion. Makes you wonder what effect the high cost of extended care will do to the estimate. Maybe it’s time to consider a conversation with GenXers and Millennials…an informative conversation, not a sales pitch. Why? Because maybe they have already found out more than you know. Many GenXers are now dealing with their parents extended care needs. In April 2023, Pew conducted a survey and found that “while the level of responsibility Americans take on for their adult family members varies, the majority say they feel the most responsible for taking care of their elderly parents. Here is the percentage of Americans who are already providing care: • Adult children providing caregiving for an elderly parent who needs it: 66% • Adult children providing financial assistance to an elderly parent: 55% If you’re challenged to start a conversation about extended care, then let me offer you some insight because it isn’t just the Genxer who wants to find a way to ‘make it better’, it’s the elderly parent as well.
Why Don't You?
The Census Bureau says that members of the Baby Boomer generation turning 65 will peak in 2024. Approximately 4.4 million Americans will turn 65 this year. That’s an average of roughly 12,000 per day. It’s a mind-blowing number but it screams necessity and opportunity. Do a quick calculation to see how many Boomers have already hit that milestone this year alone. Now is the time to use the three-step roadmap to discuss what that milestone can mean to your family or clients. Use the Care PlanningTeam as outlined here and in the latest book in the 'How Not To' series, “How Not To Pull Your Life Apart Caregiving,” to focus on client’s concerns. Is it understanding Medicare/Medicaid options? Is it whether to claim Social Security benefits now or later? Is it updating a will or Beyond 65, will they want to continue to work and save? What’s the plan for future extended care? Conversations in advance of turning 65 can be a wake-up call for clients who entrusted you with their investments or retirement plan. Access the resources in the book’s appendix and work with clients and your own family to estimate expected longevity as a conversation opener. Worried about objections and challenges to the discussion? Access practical approaches to overcoming those hurdles.
Thanks for the Advice, Mr. Buffet
Warren Buffet remarked that “What counts for most people in investing is not how much they know, but rather how realistically they define what they don't know.” The statement equally applies to short and extended care planning. Did you ever explain the ‘Shadow Caregiving System/Economy?’ to your client? As explained in my book, clients may not self-identify with it or maybe they don’t think you’re interested in knowing what it’s doing to their life. First question, “Who will help in an emergency, let alone in an extended care need situation?” Is the response realistic/practical? Second question, can they define the potential effect of caregiving on the caregiver’s life? Filling in the Care Squad step describe in either book: “How Not to Pull Your Family Apart” or in “How Not To Pull Your Life Apart Caregiving: Overcome Challenges and Objections to Planning Conversations” will unearth the practicality of who is available to help and how it works with personal obligations. This step leads to discussing financial consequences to a disruption of career, saving, budget, lifestyle, and burnout! This simple step, the Care Squad, helps clients and professionals define what they don’t know about a realistic plan. My three-step roadmap helps clients and professionals develop a method that assists in discovering the positive effect of care planning vs. crisis planning.
Know Any 'Career Extenders'?
They are everywhere and some are your clients! Why are so many Baby Boomers working beyond the traditional retirement age of 65? Bob Morison, a senior advisor at consultancy Age Wave and the co-author of What Retirees Want: A Holistic View of Life's Third Age, points out that "They're aware that they have more years and that there's a lot of time to fill." Are you or is one of your client’s a ‘career extenders’ who openly shares the story that propelled them into a second career? I have an “extender’ friend who started her own consulting firm. It’s her dream to help others with their or their loved one’s opioid addiction. She lost her 32-year-old son-in-law to an overdose and saw her daughter’s life pulled apart. I know another ‘extender’ who loves to travel. She is going for an ‘extender’ career as a travel agent. Let’s not forget a very common third reason. According to a New York Life 2023 press release, the average retirement savings balance among baby boomers was $223,498.27. If a client is looking at qualifying for public LTC assistance, it’s too much. If they are looking at funding extended or long-term care, it’s not enough. My newest book, available at Amazon or wherever you purchase your books, deals with Overcoming Challenges and Objections to Planning Conversations since most ‘extenders’ think it’s too late to discuss planning. Contact me carroll@thecaringconversations.com and share your client’s story.
It's a Scary Thing!
No, we’re not talking horror or sci-fi movies, we’re talking paying for retiree health care. The cost of a major medical care expense is often unknown until the final bill arrives. I have a friend who took her 83-year-old mother to the hospital. Her mother stayed in the hospital for 2 days. She was shocked when she got the bill and learned that her mother was billed as a patient under ‘observation’ and not as an ‘admitted’ patient. If you don’t speak billing codes for medical procedures, emergency services, room charges, medications, physicians, specialist fees, etc., deciphering/paying surprise charges can be a frightful experience. In a February 2023, press release, White House noted that pharmaceutical medical debt in the U.S. had reached $111 billion. Unpaid medical bills account for more than half of all debt in collections, according to the White House report. As a result, medical debt exceeds credit cards, personal loans and utilities and phone bills combined. Too many Americans assume that Medicare will cover their extended care needs once they retire. They don’t plan for all the ‘extra’ and ‘unknown’ bills that come into play. Professionals must learn how to open the caring conversation and help clients avoid being unprepared and prematurely invading their investments. Use my three steps and get comfortable with a planning approach that can create the ‘talk’ to build client trust. Show you care.
Are You As Baffled As I Am?
California has its own way of doing things that may lead to other state initiatives and legislation. Currently, CA residents are waiting to hear the outcome of the CA LTC Task Force which was charged with exploring options for the design of a state publicly-funded LTC program. But here’s the part that I find baffling. The Department of Health Care Services, which oversees Medi-Cal, has published on its website (dhcs.ca.gov) the passage of Assembly Bill 133, signed by Governor Newson. "Starting January 1, 2024, assets will no longer be counted to determine Medi-Cal eligibility!" “This law created a two-phased approach to eliminating the asset test used to determine eligibility for Non-Modified Adjusted Gross Income (Non-MAGI) Medi-Cal programs, including Long-Term Care and Medicare Savings Programs.” There is also an FAQ about the elimination of the asset test. Let’s hope everyone digs into the details or they may wind up like Erik! In the multigenerational story of the Jones family, caregiver Jodi’s son, Erik hopes that Medicare or Medicaid will relieve some of the mental, physical, and health wear-and-tear that he sees his mother undergoing due to solo-caring for her aging parents. Like so many, he isn’t familiar with the complexities of the Medicare and Medicaid system. Participating in the ‘Care Planning Team’, he and the rest of the family uncover vital information. Do you need an organized roadmap to effectively approach protecting assets and LTC planning. Use any of my three steps to get it done!
What DoesThis Study Tell You?
Do you know how many of your clients extended or long-term care strategy requires another family members to be the LTC plan? I was reading an issue of McKnights LTC News and came across yet another reason to have the “talk” with families and clients. The Journal of the American Geriatrics Society reported that… “Over 30% of older adult caregivers report simultaneously receiving care for their own daily activities." Older caregivers who receive care are more likely to be older spousal caregivers, have limited assets, and worsening physical health. Younger generations will need figure out how to help or cope when older caregivers become unable to continue to be the caregiver. As costs increase, limited assets won’t go as far and can make professional assistance out-of-reach or destroy even a healthy financial plan. Ask the question, “How will this work in the long run-for you and for someone you care about?” Listen carefully and use one of my three steps to uncover a workable solution. GenXer’s and Millennials value information and education. The Care Planning Team step is useful for looking at various options that you can bring to the table. Not an expert? There are many specialists and study groups available to help. Be the moderator, facilitator, or if need be, the mediator to initiate and advance the “talk” to the planning stage. Use and adapt my three-step roadmap and the Jones family story to help GenXers and Millennials engage in the “talk.”
The Changing Face of Medicare Advantage Plans
Major Medicare carriers are reporting significant Medicare Advantage (MA) losses. What changes can we expect to see as they navigate the future? Helping people early in the health care continuum is one way of avoiding more costly care for advancing diseases and illnesses. We know that from seeing more positive outcomes from early planning and coordination for limited, extended, and long-term care needs. Recently, a major healthcare carrier sent out a flyer to its Medicare Advantage clients. The offer goes beyond just the traditional check-up or treatment. Medicare Advantage coverage may include: • physical health-fitness programs • emotional health-mental wellness workshops, grief and loss counseling • nutritional health-cooking demonstration or referrals to food banks • personal development-financial, advanced planning and health literacy education classes • spirit and soul health-meditation classes and interest groups • social health-games, movies, and celebrations. MA Carriers are also navigating significant regulatory changes coupled with increasing medical care costs. The most sweeping set of regulatory changes to the Medicare Advantage program since the Medicare Modernization Act of 2003 will go into effect in the next three years, affecting rates, risk adjustment, star ratings, and Part D. Individuals and Families that labor under the belief that Medicare or Medicare Advantage is their extended or long-term care plan-better think again. It is more important than ever to have the “talk.” Use my three-step roadmap to create a feasible, well-designed, affordable limited, extended, and/or long-term care plan.
What Can Take You Off Course?
Retirement is the starting line of a new phase of a life story. You have clients who need to plan for it! I know retirees who grew up in the city and now yearn for the tranquility of trees, rivers, and valley vistas. I have other friends who grew up in the country and now seek the convenience and fast-moving pace of city life. Other friends have careers that separated them from those they care about and now want to live closer to ‘home.’ Few include the practicalities that attach to the ‘unnamed’ phase of retirement when discussing their plan. It seems so distant until they need assistance with daily living activities or develop cognitive issues. Assistance doesn’t mean total dependence so good planning can make this stage less challenging. Being a solo-ager or partner-ager doesn’t make it any easier. Either way, a successful retirement planning should include the “talk” about the unnamed phase of retirement. Starting early puts you at the head of the class, instead of buried in the pack. Whether a self-doer or working with a professional, my story about the Jones multigenerational family’s use of my three-step roadmap will help you understand that sometimes ignoring needs that sneak up on aging adults can heavily impact the well-being of both caregiver and care recipient. I suggest sending them the book if you want them to come back to you with questions.
Success = Fact Finder + The "Talk"
Our grandparents and great grandparents hydrated with cocktails (they didn’t carry their own supply of water everywhere they went). Exercise included getting off the couch to change TV channels (no remote available), typing was a secretarial career skillset (now everyone starts typing as soon as their parents give them a device), and longevity planning meant collecting social security as a major funding vehicle for the retirement years. Life expectancy at birth in 1930 was 58 for men and 62 for women, and the retirement age was 65. That points out another major change- longevity. We don’t plan for the extended care needs that associate with longevity. A basic element of good planning is using a fact finder. Yet so many clients and consumers don’t create documents to list what they have, what’s missing, and what their wishes are as they age and their circumstances change. Another basic but essential element in creating a good plan is having an old fashion discussion. The best discussion leads to humanizing the fact finder which leads to better planning and the reduction of family tension. The advisor has an opportunity to facilitate these conversations. Use a three step approach to get things going and create plans that work for both the caregiver and care recipient.
Did You Plan to Live This Long?
Dick Van Dyke turned 98 last weekend. In an interview on CBS News, he expressed his regret that he didn’t plan to live a long life. He observed, “People are more afraid of aging than they are of death these days and we need to tell them that there is a lot of living to do.” Planning for living a longer life means understanding how to prepare. Don’t let your longevity become a caregiver’s burden and pull their life apart when instead you can use my three steps to create a plan that works for both you and those that you love. In his autobiography, he wrote, “Don’t be scared of dying, be more frightened that you haven’t finished living.” I would add that we should all be frightened that we‘ll interrupt our caregivers continuing to live their lives.
Which Statistic Needs Updating?
We all are accustomed to hearing that 10,000 Baby Boomers turn 65 every day. Well, it’s time to update our stats! According to the Census Bureau, on average 12,000 Americans will turn 65 every day! Take a moment to figure out how many will celebrate that milestone just in the month of January. And what about the ‘other’ milestone. According to a January 2024 Pew Research report, about 101,000 Americans are ages 100 and older! This population is expected to grow to about 422,000 by 2054, according to estimates from the U.S. Census Bureau. This aging population will impact so many areas, from retirement planning, social service delivery, insurance and financial planning, social security and Medicare/Medicaid programs, caregiving responsibilities and so on. Are you talking to your clients about how this impacts them personally?
What's an ADU?
Given the number of American 65 and older is increasing every day, accessory dwelling units (ADUs) and other add-ons are increasingly providing a housing solution for family members. Some home owners are ready to tackle the construction headaches and interruptions that come with adding a new living area to their current home. Others prefer to add a free standing unit on their property which may be called a granny pod, granny flat or backyard cottage. Still others may add an apartment over the garage or convert basement space into an apartment. In some cases, there can be resistance from neighbors and zoning. Presently, it is estimated that only four percent of households have an ADU, although in an AARP survey, thirty-two percent of homeowners responded that they are interested. In some cases, the parent may pay rent, or provide childcare, or the ADU or other add-on may provide the physical and/or protection of the older family member. If none of these options are feasible and the parent or family member owns their own home and wants to age-in-place, then a Home Equity Conversion Mortgage may be the answer.
Is a Holiday Card Enough?
It’s the time of the year when many agents/advisors send their clients a holiday card. Whether you handle a client’s insurance and/or investments, you should anticipate that they expect more than an annual holiday wish. Updates on product information or statistics won’t do it either. 2024 promises to continue the transformation from facts and figures to stories and concern for their overall financial well-being. We have all heard the expression “the Great Wealth Transfer.” It's the $72 trillion stack of assets that baby boomers are sitting on that are going to pass onto family heirs. Thinking about your client as part of a family isn’t new, but it isn’t a common practice either. You need to understand what are the detractors and what are the chargers of maintaining a stable client relationship. Too often we forget that it only takes one serious health issue or prolonged extended care need to change everything. Don’t just wish them good health and happiness, talk to them about how extended care needs could affect their well-being and their retirement. As a plus, large or small, with your help their investments, life insurance, or home can be part of the "Great Wealth Transfer."
Ho, Ho, Ho or Uh-Oh, Uh-Oh, Uh-Oh
Planning for extended care is not everyone’s strong suit. That’s when reaching out a professional is essential, even if you are a professional but extended care is not your specialty. You hesitate for many of the same reasons that your clients hesitate. It’s our behavioral wiring that’s gets in the way. It goes to our feeling or in this case, our excuse, that planning for something that is not a quantifiable certainty can be put off. We get caught up in the treadmill of life where everyday things rush in and tomorrow seems way into the future. So many families just don’t talk about unanticipated care needs. However, holiday celebrations and interactions can bring the future into better focus. Gatherings where you see your parents, grandparents, sisters, or brothers can be eye-opening- even if it’s virtual. Do you notice things that indicate they are not as physically or mentally sharp as a you remember them to be? What does that tell you? It’s the warning sign that the future is not so far off. People underestimate the power of small steps and how it leads to a solid plan over time. My three-step roadmap offers a formula to start and continue to build a plan for every life stage. Today’s advisors/specialists are better at focusing on fitting the plan to the need, current and future. You need to trust them with the right information to understand your own or your client’s risk level, budget, and personal support resources.
The Caregiving Economy-the Quiet Crisis
Caregiving is often seen as a rewarding experience, but it can also be financially challenging. The TIAA Institute and UPenn School of Nursing have found that almost half of caregivers suffer financially, facing a double whammy in their finances. Many caregivers have to dip into their own savings, accrue debt, delay bill payments, or decrease retirement contributions as a result. On average, caregiving costs can amount to over $7,000 per year. Therefore, it is crucial for families to plan for the potential emotional, physical, and financial burdens that may arise due to a longer lifespan. How Not To Pull Your Family Apart is a story of a family working through various scenarios and making informed decisions. As a result, they are prepared for the risks and caregiving challenges that may arise at any point in life. It is important to have planning conversations with family members to address the short-term and long-term tradeoffs that come with caregiving. By understanding and preparing for these potential financial challenges, families can ensure that the blessing of increased longevity remains just that – a blessing.
How Bad Is It?
CMS predicts federal spending for Medicare and Medicaid will increase faster than private spending. For example, according to their projections from March 2022, Medicare spending will climb from about $1.0 trillion in 2022 to $1.7 trillion in 2030, an increase of 68%. Medicaid spending would grow from $0.8 trillion to $1.2 trillion, an increase of 48%. It is a complex, expensive, and very confusing federal program. As if the big picture isn’t bad enough, I read an article by Nathan Place in which he described Medicare as a minefield of deadlines, penalties, and the potential for disastrous mistakes. Well said, and unfortunately all too true. Much of the confusion is not only due to the size and expense of the program and the lack of early and easy to understand education, but it is also due to misinformation that have led to incorrect assumptions. Many adults approaching Medicare eligibility wait too long to investigate their options and benefits (or the lack thereof). Many mistakenly think Medicare is a single uniform healthcare program, is not means-tested, requiring sign up only during ‘an open enrollment period,’ and that Medicare covers long-term care costs. And that’s how bad it is!
Times They Are a Changin'
Retirement planning should not be a one-size-fits-all approach. With longer life expectancies, retirement will look different for everyone, and it's important to consider your own unique circumstances.Defining retirement age can be subjective. Some people may consider it to be the age at which they become eligible for government support, such as social security. Others may define it based on their desire to pursue new hobbies or interests.Once you start seriously thinking about retirement, it's crucial to formulate a plan. Consider whether you want to abruptly stop working on a specific day, gradually ease into retirement by working part-time, or transition into a different line of work that interests you. Think about how you envision your retirement and calculate the estimated cost of living that way. Take into account expenses like housing, food, taxes, travel, hobbies, and insurance.As you move into the second stage of retirement, where you are fully retired, your expenses may change. Some costs may increase while others may decrease. Think about what your retirement will look like during this stage and adjust your financial plan accordingly.Lastly, it's important to consider the third stage of retirement, where you may require additional support, whether it's physical, psychological, or financial. Planning for this extended care stage should be done early on, during stage one of retirement planning. By doing so, you can explore options to mitigate the financial risks associated with this stage and protect your retirement plans.
What example are you setting?
According to a new TIAA study, half of Americans spend less than one hour a week on their finances, but more than four hours on social media. Of any age group, millennials–and especially men – are spending the most time managing their finances. Thirty-nine percent of millennials say they spend four or more hours a week managing their finances, compared to just 25% of Gen Z respondents and only 7% of baby boomers. Men are nearly twice more likely than women to spend four hours or more a week on their personal finances (30% vs. 16%). What about financial wellness checkups? Look to the younger generations again. More than half of respondents under 65 say they are interested in a financial wellness checkup, compared to just 30% of those over 65. The most preferred method of meeting for a financial wellness checkup is in person (26%). Financial services providers’ online tools come in as the most trusted resource for information (63 %), but one in five say social media content is also a go-to resource. Remember that children learn more by watching their parents behavior than by the instructions parent bestow on them! What example are you setting?
Longevity vs. retirement plans….who wins?
Longevity coupled with demographics translates into a new kind of discussion with clients. Consider a client who starts working in their 20’s, works for 40 years, and in their 60’s plans to retire. That equates to needing to generate income for at least some 80 or more years. Oh wait, he/she wants to retire in their 60’s. So are you, as the agent/advisor/ investment specialist feeling comfortable generating income for that additional 20 or 30 plus years? It’s not a simple task. And what about the impact of extended care? Is funding for extended care part of the plan? What about caregiving? Will that impact earnings/savings during working years, creating an even bigger hole in the plan. Did you discuss how extended care and caregiving can implode even a well-thought out retirement plan? You should!
Is It Enough?
On October 12th, the Social Security Administration announced the 2024 annual social security increase for retired workers will be 3.2%. Starting in January 2024, the average monthly Social Security monthly check of $1,906 will increase by $59. The maximum amount of earnings subject to the Social Security tax will increase to $168,600.The earnings limit for workers who are younger than "full" retirement age (refer to https://www.ssa.gov/benefits/retirement/planner/agereduction.html) will increase to $22,320. (SSA deducts $1 from benefits for each $2 earned over $22,320.) The earnings limit for people reaching their “full” retirement age in 2024 will increase to $59,520. (SSA deducts $1 from benefits for each $3 earned over $59,520 until the month the worker turns “full” retirement age.)There is no limit on earnings for workers who are "full" retirement age or older for the entire year.According to an AARP analysis of recent government data, among Americans ages 65 and older, 40% rely on Social Security for half or more of their income and about 14% of recipients in that age group depend on their benefits for nearly all their income. If you are the caregiver, you need to understand the cost of care and the impact on a care recipients budget-or yours. You need a plan!
It's Scary Stiff!
Figuring out how to plan for healthcare costs, especially unpredictable extended care costs in retirement, is scarier than a Spooky Halloween Haunted House! Can we get it right? Are we depending on an imprecise target? Well, sure we are! What we do know is that healthcare costs are going up and variable healthcare expenses generally increase with age. We know that people with chronic conditions can require treatments and management programs that can add significantly to expenses. But consider the healthier person. They don’t need to worry about offsetting some of the healthcare risk. Right? Wrong! A healthier person may not pay more on an annual basis but the total costs spread over the course of their lifetime can be higher due to longevity and the additional years of paying increasing costs. And there are planning projections which are just as scary. Even without figuring in extended care costs, according to a HealthView Services’2021 Retirement Costs Data Report, “While most 65-year-old couples retiring in 2021 can expect their retirement healthcare costs to fall between $156,208 and $1,022,997, factors such as the state in which they retire, coverage choices and chronic health conditions can have a significant impact on where within that range they may fall, highlighting the importance of personalized healthcare cost planning.” Yup! Scary!!!
Retirement Planning, HSAs, & LTC
There are lots of variables to consider in determining how much money you will need for your ‘envisioned’ retirement. Some variables are out of your control. Aside from annual income tax rates, “provisional income” on the taxation of social security benefits, and depending on your income, the amount deducted for Medicare Part B, there remains the risk of extended health care costs. A Health Savings Account (HSA) can be a significant resource for planning to pay traditional or hybrid LTC premiums or to pay for ‘qualified’ LTC costs. Remember that participants can only contribute a certain amount to an HSA each year, but all contributions roll over from year to year. Every year, the Internal Revenue Service (IRS) sets an annual maximum HSA contribution limit. In 2023, the contribution limit is $3,850 for an individual or $7,750 for family coverage. At age 55 or older, individuals can contribute an additional $1,000. The HSA contribution limits for 2024 are $4,150 for self-only coverage and $8,300 for family coverage and a $1,000 catch up contribution for those 55 and older Like any saving or tax relief program, the devil can be in the details. For example contributing too much in a given year or using the money to pay for ineligible expenses will tag you for a tax penalty. Also, you must be and stay enrolled in an “HSA-eligible health plan” for a one-year "testing period." Best to consult a professional and stay on top of this important tool.
Where You Live Can Cost You!
Where you plan to live now or in the future is important; it can cost you! One basic consideration is that since most of us want to age-in-place, consider the cost of where you currently live or where you expect to live in retirement. The goal is to look at lots of different possible outcomes and create a plan that will work even in challenging economic conditions. If you think San Francisco is the most expensive, guess again! Try Manhattan, NY! That’s based on data from the Council for Community and Economic Research’s Cost of Living Index, collected from Jan. 1 through March 31, 2023. The cost of living is expressed as a composite index score, based on six weighted categories: housing, utilities, groceries, transportation, health care and miscellaneous goods or services. Start by going through current expenses and estimate how spending may, or may not, shift in retirement. Some costs, like a home-office expenses or saving for retirement, are expected to drop. But some other expenses may go up, like visiting family and friends or travel and entertainment, and the important one- healthcare costs! Planning may include considering your projected life expectancy. Don’t forget to consider the intangibles that attach to health care and especially extended care costs. Is your current living environment suitable for aging-in-place? Who will you depend on if you need assistance? Are the community or government services and supports easily accessible? Make sure where you plan to live won’t cost you!
Up, Up, And Away!
According to AARP Public Policy Institute, “Valuing the Invaluable: 2015 Update,” the value of informal caregiver services had steadily increased from an estimated economic value of $375 billion in 2007 to $470 billion in 2017. In the latest report, “Valuing the Invaluable 2023 Update: Strengthening Supports for Family Caregivers,” the estimated economic value of family caregivers’ unpaid contributions was approximately $600 billion, based on about 38 million caregivers providing an average of 18 hours of care per week for a total of 36 billion hours of care, at an average value of $16.59 per hour. This conservative estimate does not consider the financial cost of care (out-of-pocket and lost wages) or account for the complexity of care provided (i.e., medical/nursing tasks). Do you know if your client is a contributor?
Are You Convinced Yet?
It’s the launch of the “Golden Bachelor” this month, featuring a 72 year old bachelor and women between the ages of 60-75. Longevity appears to offer an opportunity to plan for a ‘golden’ future. The research from the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at Stanford University indicates that longevity literacy (an understanding of likely life expectancy at different stages of life) is closely correlated with retirement readiness. Research from the new 2023 Retirement Income and Risk Planning, offered by Allianz, indicates that longevity is seen as the greatest risk to retirement income plans, up from fourth place in 2022. The second-greatest risk to retirement income plans is perceived to be long-term care (up from third place)…” The connection between longevity, retirement planning, and the risk posed by ignoring the potential impact of long-term care is clear. Are you talking ‘longevity’ with your clients?
Should Your Client Be Part of the Study?
Lately, we have heard about some pharmaceutical advancements in the treatment of Alzheimer and other diseases of the brain. But we hear very little about efforts to help those individuals remain in their home or the burdens borne by caregivers who support them at home. In response to the Biden administration’s April 2023 Executive Order 14025, CMS is accepting letters of interest for a test model, Guiding an Improved Dementia Experience (GUIDE). GUIDE aims to be “an innovative new health care payment and service delivery model focused on dementia care that would include family caregiver supports such as respite care.” The Model will focus on dementia care management and aims to improve quality of life for people living with dementia, reduce strain on their unpaid caregivers, and enable people living with dementia to remain in their homes and communities. It will achieve these goals through a comprehensive package of care coordination and care management, caregiver education and support, and respite services.” CMS will release the application for GUIDE, a voluntary, nationwide model, in Fall 2023. Prior to the application release, interested organizations are encouraged to submit Letters of Intent to CMS by September 15, 2023. The model will run for eight years beginning July 1, 2024.
A staggering Figure!
We are being told to expect that a couple of new strains of COVID-19 may, once again, disrupt our lives this fall. We all hope that some improvements and preparations resulted from the global pandemic. At least temporarily, we became aware of needed improvements to facility care, the shortage of professional help, and the importance and essential role that family caregivers filled in supporting family, friends, and neighbors. A new AARP study, ‘Valuing the Invaluable’ attaches mind numbing updated costs to the increasing economic, physical and emotional costs of caregiving. “Care provided by millions of unpaid family caregivers across the U.S. was valued at $600 billion in 2021, the new report estimates, a $130 billion increase in unpaid contributions from the 2019 report. The staggering figure is based on about 38 million caregivers providing an average of 18 hours of care per week for a total of 36 billion hours of care, at an average value of $16.59 per hour. For perspective, that amount is considerably more than the $433 billion spent by families nationwide in 2021 for all out-of-pocket U.S. health care costs. Put another way, the sheer act of trying to save $600 billion by setting aside $100,000 per year would take a total of 6 million years.” https://www.aarp.org/caregiving/financial-legal/info-2023/unpaid-caregivers-provide-billions-in-care.html
Social Security Turns 88!
What does every person wish for on their birthday? Another birthday! Social Security turned 88 on 8/14/23.If Social Security is a major contributor to the success of your or your parents’ retirement plan, let’s hope SS gets its wish for many years to come. According to the 2023 Annual Report posted by the US Census Bureau, At the end of 2022, the OASDI program was providing benefit payments to about 66 million people: 51 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 9 million disabled workers and dependents of disabled workers. Under intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust Fund reserves are projected to become depleted in 2033, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. Lawmakers have a broad continuum of policy options that would close or reduce Social Security's long-term financing shortfall. Estimates for many such policy options are available at ssa.gov/OACT/solvency/provisions/. Let’s hope future Social Security birthdays reflex options that close the shortfall.
Workplace Boomers vs. Other Generations
The Engagement of Boomer Retirees and near Retirees at the Workplace May Surprise You! According to a July 25, 2023, article by Ryan Pendell, A Snapshot of Older Generation Engagement Trends, "as of the end of 2022, 35% of employees in the baby boomer generation are engaged at work. That means boomers are slightly more engaged than older millennials (33%) and Gen Xers (31%) but have the same level of engagement as Gen Zers and younger millennials. Supplemental income is an acute need for many nearing retirement today. According to Gallup’s latest survey, only 39% of nonretired Americans aged 50 to 64 think they have enough money to live comfortably in retirement. In general, nonretirees expect to rely on income sources other than Social Security, including part-time work, in retirement.” For those who deal with workplace benefits, that translates into providing benefits, including supplemental benefits, that respond to today’s workplace population comprised of of older millennials (33%) and Gen Xers (31%) Gen Zers and younger millennials (33%).
Does 'Where' You Retire Matter?
When it comes to caregiver support, where the care recipient lives does matter. Why? Because if your family member decides to retire to a less expensive rural area to age-in-place, accessing welcome caregiver/care recipient support may be limited or hours away. And here’s an interesting fact, according to a USDA Economic Research Service 2022 report, "Rural America at a Glance," the historic patters of out-migration among young adults and in-migration of older adults to rural retirement destinations have accelerated the trend to retire to rural (non-metro) areas. As of 2021, for the first time, people 65 years and older made up over 20 percent of non-metro population. There is an ongoing shift in employment of racial and ethnic groups, especially evident in the emerging sectors of rural America. The health care and social assistance in rural areas ranks among them. Bottom line, the ‘shift’ of retirees to rural destinations can have a profound effect on family and friend caregivers/care recipients. A University of Minnesota study found that in many rural areas, there are 32.9 home health aides for every 1,000 65+ adults in rural areas, compared to 50.4 for every 1,000 older urban residents. Time to include this rural vs. urban trend in planning discussions about where to age-in-place.
I won’t see the effect until....
In a July 13, 2023 article, Caregivers and Retirement: Findings From the 2023 Retirement Confidence Survey, authors Craig Copeland Lisa Greenwald offer key findings from the 33rd EBRI Retirement Confidence Survey (RCS). The survey examined the retirement prospects, knowledge, preparations for retirement, and experiences in retirement for those who are unpaid caregivers vs. those who do not provide this care. Caregivers in this survey are defined as those who provided unpaid care for an adult and/or child within the last 12 months in a noninstitutional setting and helped their care recipient with at least one activity of daily living or instrumental activity of daily living. “Unpaid caregivers assist with ADLs and IADLs, but they also provide financial support. More than half of working caregivers provide financial support to their care recipient, and these results would suggest that it’s often to the detriment of their own financial health,” observes Lisa Greenwald, CEO, Greenwald Research. Significantly, fifty-five percent of caregiving workers and 37 percent of caregiving retirees report that they provide financial support to their caregiving recipient. Over one-third of caregiving workers (35 percent) and caregiving retirees (37 percent) say they provided $5,000–$14,999 in financial support to their caregiving recipient in the past 12 months. In conclusion, the authors point out that “even though caregivers are doing many of the right things in preparing for retirement, caregivers appear to be behind in savings and their confidence about their retirement due to their caregiving responsibilities.”
Did You Forget Something?
If you are among the 54% of Financial Advisors (according to the OneAmerica 2023 Long-Term Care Financial Professional Planning Study) recommending/offering LTC insurance to your clients, then we applaud you. If not, then you’re not really considering all the risks to your client’s portfolio or financial plan. If you’re not comfortable starting the conversation, here’s an opportunity for you to introduce the topic. Offer clients my book “How Not To Pull Your Family Apart: A Practical Guide for Caregiving and Financial Stability.” It’s a story, not a sales pitch. Ask them with which character they identify or which character they plan to depend upon for care needs. Or ask them if they have a story to share with you or share your story. Then, work with them or invite an advisor/agent/broker who specializes in extended or long-term care to take some of this financial risk off the table. Don’t you agree that it’s part of your fiduciary responsibility?
Did You Forget Something?
If you are not among the 54% of Financial Advisors (according to the OneAmerica 2023 Long-Term Care Financial Professional Planning Study) recommending/offering LTC insurance to your clients, then you are not really considering all the risks to your client’s portfolio. Here’s an opportunity for you to bring up the topic without needing to be the expert. Give clients my book “How Not To Pull Your Family Apart: A Practical Guide for Caregiving and Financial Stability.” It’s a story, not a sales pitch. Ask them which character they are or which character they depend upon. Then, work with them or send them to the advisor/agent who can take some of this portfolio risk off the table. Don’t you agree that it’s part of your fiduciary responsibility?
Are You Ready?
The Great Wealth Transfer is coming and will provide the next generation with resources for insurances and investments -that is, if it isn’t consumed by extended or long-term care costs. According to Arizent's latest research report, “Capturing the Next Wave of Clients," the next generation will expect digital tools, education and ongoing communications; a presence and ingoing activity on social media channels; availability of younger advisors or team members; and the hosting of “entire family” events. One of those “entire family” events should be an extended care planning session involving the entire family (no matter how your client defines family). A succinct, inclusive way to start the planning and to interact with other family members who will inherit the family business or wealth is to use a format with several options to start and continue the conversation.
Does Your Employer Offer Caregiver Leave?
In the aftermath of the COVID pandemic, employee benefits are one of the most critical aspects for candidates to consider when evaluating a job offer. Not surprisingly, employers reported adjusting their benefit packages. The evident needs of employed caregivers played into some of the changes. A survey of U.S. employers by the nonprofit Integrated Benefits Institute (IBI), revealed that 40% of respondents indicated that benefit plan designs have evolved during the pandemic to accommodate culture shifts, emergency protocols, and a desire for more flexibility. Overall, the top three benefits added, as reported by respondents, are: • Remote work options (42%) • EAP/behavioral health (27%) • Caregiver leave (20%) Employers cite the usual factors for making the choices they did: a balance between cost-cutting and still being able to attract and retain critical employees.
It’s Never Just One Thing
It’s the continuum of care that can overwhelm. Whether it’s a sudden need or one that slowly morphs, it’s never just one thing. Caring for someone is multifaceted, often overwhelming and rarely follows a predicable schedule. As we have seen, the cost of care is not predictable either. We discuss our hopes and plans for how we would like to live out our lives-until it comes to planning for extended care. It’s never just one little thing that stops us. Having had a similar experience, my good friend Suzanne shared her story with me. She never spoke to her father about his extended care needs. As his care needs became more evident, doing so became more complicated. It’s never just one thing that stops the conversation. It’s that: • talking about that very topic seems to upset and scare everyone, • asking family members what they know about documents or his wishes was ill-timed, • the fear of offending someone’s idea of what should or shouldn’t happen blocks important conversation, • wondering how bills will be paid seems insensitive, • a million other unspoken issues makes necessary conversations unlikely and difficult. She said the situation grew more and more tense. Especially for her father. There was no plan in place. The ending of the story isn’t pretty. Her dad passed. Chaos ensued. Anger grew. Expenses piled up. All communication is strained. A plan could have avoided all that!
The “Unnamed Phase of Retirement”
It’s a new day. We've never seen this one before. With this new day comes new strength, new ideas, new opportunities, new focus. You hope to live a long life. If you do, what’s the plan when you need some assistance? Will care needs control you or will you take control by having a solid extended care plan? You need to enlighten your tomorrows-today!
And Now YOU Know
As Confusius said, “What you do not want done to yourself, do not do to others.” You are a caregiver. You now understand what that means. The extra physical, psychological, financial, and relationships pressures that are apart of it. If you do not want YOUR caregiver to feel the sometimes overwhelming pressure of caring for you, then you must plan for your extended care needs NOW. Don’t know where to start? Hopefully, this book will help you become more comfortable talking about planning for extended care. And then, work with a specialist who can personalize the three steps and get your plan done, now!
A Punch in the Face
As Mike Tyson said, "Everyone has a plan till they get punched in the face." A family crisis can feel like a punch in the face. As family members age, their health and independence may change suddenly or gradually over time. Creating an established financially stable care plan will help to avoid that punch in the face. Structured steps help us organize and prioritize tasks and responsibilities. They also offer comfort and stability, serving as anchors in a world that keeps changing. Conversations about future care needs are hard to start and equally hard to bring to a meaningful conclusion. Using a process in which everyone participates and has a role creates a plan that leads to better outcomes when older family members need assistance. Using the three steps in this book means families (no matter how you define family) create a process to ‘help’ instead of ‘handle’ others.
So Much of Me
I spent a couple of days with my good friends Pete and Sharon. I noticed a plaque on the wall in their kitchen. Pete mentioned to me that they received it from one of their granddaughters. It read, “So Much of Me is From What I Learned From You. You’ll Always Be with Me Like a Handprint on My Heart.” Sharon is the keeper of the family history. With great accuracy, she offers dates, places, family and friend participants for past events and gatherings. Sharon has had a complex health history for many years. Sharon explained that while she and Pete are careful not to overshare, they benefit from having established that personal care challenges and the cost of care increase as we grow older. They have opened lines of communication that help family generations grow from both present and past experiences. They established that truthful, shared dialogue about the cost of care, family support, and future planning is basic to leaving the legacy they want to create for generations to come.
Every Family Has a Story
It’s impossible to go through life without making mistakes—they’re just a part of being human. Every family has a story. If we share our stories, we may learn from mistakes or challenges of the past to make better decisions about our future. There are no do-overs. Trying to imagine our future selves can be facetious, frightening, fun, or frustrating-but likely fruitful. In the Jones Family Story, Jodi and her husband, Jackson, decide to engage in an exercise to learn more about how each of them envisions their future self. As a result, they learn that they are not necessarily on the same page when considering important decisions about when and where to retire, how to handle potential family extended care responsibilities and how to fund future care costs for either the care recipient or the caregiver. Let’s see how the conversation unfolds once they use the list of questions to help each of them envision of their future self.
One of the Biggest Mistakes We Make
Assuming we will be able to judge someone’s declining health can be a mistake. Thinking that we can engage someone to help with longevity issues, can be a mistake. The lack of trained or even available assistance for those in need of support came to light during the COVID pandemic. The states are looking at the looming care crisis, and so is the federal administration.The Fact Sheet released by the White House, announced the most sweeping set of executive actions in history to improve care. The administration believes that we must secure significant new federal investments to transform care in this country. More than three-quarters of home and community-based care service providers are not accepting new clients, leaving hundreds of thousands of older Americans and Americans with disabilities on waiting lists for home and community-based services or struggling to afford the care they need. The Administration is taking action to make child-care and long-term care more affordable, by directing multiple agencies to act. The directives are aimed at helping both care recipients and caregivers.
The "Shadow Caregiving System"
The Shadow Caregiving System....we're all part of it! According to AARP's 2020 Caregiving in the US report, workers from four generations (Gen Z, Millennials, GenXers, and Baby Boomers) are currently providing care for an aging adult. Rosa doesn't want to "upset" her parents and therefore doesn't discuss planning for her mother’s care needs. Rosa has become overwhelmed. She is experiencing unmanageable physical, psychological, and financial consequences. Her friend, Jodi, and Jodi’s care planning team (CPT) used my three-step formula to engage in learning about options to create an extended care plan that doesn't single out the potential care recipient or future caregiver. With a plan in place, Jodi’s multigenerational family’s membership in the Shadow Caregiving System is a more supportive and positive one.
Longevity vs. Life Expectancy
Along with the joy of living a long life, comes the worry of running out of money. The Society of Actuaries (SOA) refers to it as retiree financial longevity risk. Longevity is different from life expectancy, which is how long an individual of your age, gender, and health would be anticipated to live on average. According to the SOA, there is a significant chance that you will live for many years beyond the average.The Actuaries Longevity Illustrator (“ALI”) helps you see how long you might live. The ALI addresses two crucial concerns: “How long can we expect to live as a couple?” and “By how many years might one of us outlive the other?” Think about the impact that depleting financial resources by one spouse or partner could have on the other or another family member's well-being. American Academy of Actuaries and Society of Actuaries, Actuaries Longevity Illustrator, http://www.longevityillustrator.org/(accessed February, 19, 2023).
You Will Need a Bundle
According to a a new report by the Employee Benefit Research Institute (EBRI), an average 65-year old man should have saved $96,000 to cover premiums and prescriptions in order to have just a 50% chance of meeting his healthcare spending needs in retirement, the report said. A 65-year-old woman should have saved $116,000, and a couple should have $212,000 earmarked specifically for these costs. To have a 90% chance, the cost rises to $166,000 for the 65-year-old man, $197,000 for the 65-year-old woman and $318,000 for the couple. In an extreme case, an average couple with very high prescription expenses would need $383,000 for a 90% chance of meeting that need, the report said. What extended or long-term care costs add to those numbers?
The Exhausted Caregiver
As I.M Pei stated, “Success is a collection of problems solved.” We are living not just hearing about the sandwich generation, income depletion, retirement delay, rising health care costs, telemedicine, robotic surgery, longevity preparedness, and the increase of dementia and Alzheimer disease. Every American is or will be impacted in some way by extended or long-term care needs. Rosa's situation is becoming more and more common. And like Rosa, most of us put off discussing or planning for future care needs.
Envisioning Your Future
Fidelity's most recent Couples & Money Study found that 48% of couples disagree on the age they plan to retire, and that 2 of the most common ways people say they want to spend their retirement years—relaxing at home and traveling—are at odds with one another. The study also pointed out that couples who treat planning like a team sport are more likely to feel confident about their plan and more likely to agree on some of the hot-button issues. Be inclusive. Remember to include plans for funding extended care so it doesn't blow up your retirement plans or leave one spouse/partner without a agreed upon lifestyle. Don't leave anything—or anyone—out of your imagined future.
How Not To Tear Your Family Apart
Parenting & Relationships
“In a new world of caring for an aging parent, the leading expert in long-term care provides a three-step framework for having difficult discussions and preparing the options ahead of time that will work best for your parent(s) and family. You owe it to yourself and loved ones to read this book!” -Betty Meredith, CFA®, CFP®, CRC®
Experience is an excellent teacher—but it can be a harsh master. We are living longer, and aging takes its toll on our ability to remain totally independent. No matter how you define "family," you will find yourself in the role of caregiver, caring for a caregiver, or being cared for by a caregiver. Life doesn't stop while you're caught up in caring and juggling your own life. With no real training for this multi-faceted, multi-generational role, you must find a path that doesn't destroy relationships or create financial havoc.
Book Bubbles from How Not To Tear Your Family Apart
Are You the Go-to Resource?
Are you ready to elevate your practice and provide exceptional pre-extended care planning? The Care Planning Team (CPT) is a pivotal step designed to help you grow your practice. This 'discovery' step is essential for early assistance for Gen Xers supporting their parents or Baby Boomers facing health changes. As the CPT advisor and moderator, you'll provide vital information and resources to your clients. Although Medicare doesn’t cover most long-term care expenses, the official Medicare.gov site is a valuable resource. The platform is a treasure trove for finding and comparing quality care information at over 4,000 Medicare-certified hospitals, including more than 130 VA medical centers and over 50 military hospitals nationwide. At Medicare.gov you and the planning team can: • Find local doctors and clinicians, nursing homes (including rehab facilities), home health services, hospices, outpatient rehab services, long-term care hospitals, dialysis facilities, and medical equipment suppliers. • Check out hospital ratings, including overall and patient star ratings. The overall rating reflects hospital performance across various quality metrics like heart attack treatment and safety of care. • Compare facilities’ performance against national averages for patient experiences, timely and effective care, complications, and more. Empower your clients with shared knowledge and expand your practice with confidence!
It's Spring! What's Growing?
According to the Devenir 2023 Year-End HSA Survey, supported by stock market tailwinds, HSA assets saw record growth during 2023. However, growth in the number of HSAs slowed. At the end of 2023, there were $123 billion in HSA assets held in over 37 million accounts, a year-over-year increase of 19% for assets and 5% for accounts. But also worthy of note, is the increase in withdrawal rate activity. Account holders contributed $50 billion to their accounts in 2023 (up 7% from the year prior) and withdrew $39 billion from their accounts during 2023 (up 13% from year prior). Interestingly, only 38% of all HSA assets are in investments as of December 31st, 2023. Devenir currently projects that the HSA market will approach 44 million accounts by the end of 2026, holding $168 billion in assets.
Financial Longevity Wellness Professional
Will you be the one that the family selects to work on their caregiver and financial wellness longevity plans? Your client discussions should always be evolving. You will need to guide clients through both financial and non-financial aspects of retirement which will require that you build relationships with other professionals who play a key role in the retirement phase of life—particularly focusing on the areas in which you may not necessarily be an expert. Clients who come to you with questions and have done some research expect you to be able to offer advice which may entail inviting experts or specialists to the table.
How Much Cash Do Your Clients Have On-hand?
The Center for Medicare and Medicaid Services (CMS) has announced the 2023 Medicare Premiums and Copay/Deductibles. How much cash do clients have on-hand to pay the copays/deductibles that they may incur? For 2023= Inpatient hospital deductible for =$1,600 Daily coinsurance for 61st-90th Day = $400 Daily coinsurance for lifetime reserve days = $800 Skilled Nursing Facility coinsurance =$200.00 Time for a discussion to avoid a nasty surprise.
HHS Recognizes Caregivers Need Help
It’s Holiday time and a good time to recognize that the nation’s 53 million family caregivers, who make up 21% of the population, need support. The 2022 National Strategy to Support Family Caregivers developed by the US Department of Health and Human Services, urges strong accountability and implementation efforts to turn strategy into action. The National Strategy includes: • Access to Respite Services: AmeriCorps Seniors will offer professional short-term care to help family caregivers take a break; • Support with Day-to-Day and Complex Medical Tasks: Offices throughout the government will coordinate with states to grow and strengthen the direct care workforce to help more family caregivers with caregiving tasks; • Inclusion of Caregivers in Care Teams: The Centers for Medicare and Medicaid Services will update rules to include family caregivers in the hospital discharge planning process; • Financial Education on Caregiving Costs: The Consumer Financial Protection Bureau will increase the availability and use of financial education tools on the costs of long-term care so caregivers can better prepare; • Better Identification of Family Caregivers: Government departments will pilot localized outreach to share information with family caregivers about the support available; • Research on the Needs of Family Caregivers: Interdepartmental efforts across the federal government will research family caregiving to inform evidence-based policies
A Season of Transformation
Autumn is a season of transformation. Traditionally, it’s the first day when the air is crisp, when deciduous trees put on a show -- with a burst of color — greens transform into yellows, oranges, reds, purples, and browns. It’s a season when we are reminded to let things fall away to make room for reflection on the seasons of our own lives. Fall is a season of harvesting the fruits of our labors and taking stock. It’s a time to sharpen our pencils (yellow #2 or electronic) as we send our younger family members off to school. It’s time for every generation to settle in with hot cocoa, enveloped in their favorite comfy clothes, and a good book- it’s a time to reflect and learn. After the hiatus of the last few years, this autumn many families and friends will gather to celebrate birthdays, time-honored holidays, and traditions. Many families and friends will notice and reflect on the changes the passage of time has made on older family members and friends. Take this time of change to plan for what lies ahead. (Autumn’s) golden richness speaks not of the innocence of spring, nor of the power of summer, but of the mellowness and kindly wisdom of approaching age. It knows the limitations of life. —Lin Yutang, writer and inventor
I Expect To Retire When...
A 2020 report by the Employee Benefits Research Institute, based on the survey of 37,000 people aged 50 and older conducted by the Institute for Social Research at the University of Michigan, found that 60% of respondents said their work was impacted by the pandemic. They found that elderly Americans surveyed did not alter their retirement expectations significantly as a result of the pandemic, including planned retirement age and Social Security benefit claiming age. The study examined whether there was any difference between the planned and expected retirement ages of those impacted by the pandemic vs. those who were not impacted and found no statistical difference between the two groups. Both groups largely plan to retire at about age 66 but expect to actually be able to retire at age 69. “Retirement expectations determine retirement intentions, and retirement intentions predict retirement behavior,” the report, authored by Zhikum Liu, senior research associate at EBRI, said. “Individuals who want to maintain their desired standard of living when retired will need to accumulate sufficient financial assets with careful preparation and have a more realistic retirement age projection before actual retirement…” Otherwise, we can expect the caregiving population to explode as people are unprepared for the costs of retirement, especially as it relates to health care costs.
Increasing Physician Wait Times
It is difficult finding yourself in a caregiver role for which you are not trained. The increasing shortage of available physicians, especially specialists that are often required by aging parents and partners, is alarming. As the impact of longstanding demographic and other trends driving the physician shortage continues to grow, physician appointment wait times will increase thus increasing caregiver stress. “Physician appointment wait times are the longest they have been since we began conducting the survey,” stated Tom Florence, president of AMN Healthcare’s physician search division. Though the analysis looked at major U.S. cities, the wait times are likely worse elsewhere in the country…” The AMN Healthcare 2022 report cited a couple of important reasons. • In 1997, Congress placed a cap on funding for physician training, limiting the number of new physicians entering practice each year. The cap was lifted in 2021, but funding was provided for only 1,000 new training positions, far short of what is needed. • Changing physician practice styles. More physicians are choosing to work as employees rather than as independent practice owners. According to the 2018 Survey of America’s Physicians, employed physicians see 12% fewer patients on average than independent physicians.
Are Medicare/Medicaid Prices Going Up?
Don’t wait until right before you are eligible for Medicare and Medicaid to incorporate the costs into your retirement budgeting. Prices for medical services generally are set in advance creating a delay between wage and cost increases caused by inflation and prices for medical services. Medicare and Medicaid are setting prices based on what they predict inflationary and cost pressures are going to be,” said Corey Rhyan, senior analyst of health economics and policy for Altarum during an August 24, 2022 presentation at The Health Wonk Shop: Health Care Inflation in the U.S. ”They predicted for 2021 and 2022 that those cost pressures would not be as extreme as they ended up being. On the private side, those prices are set on the basis of negotiations. That’s why the sharp cost increases in 2021 and 2022 have not yet been reflected in health care prices.” Nursing home and community care organization payments have fallen and average wages are growing, so that’s something to look out for,” noted vice president and director of the Program on the ACA at KFF.
My Life is on Hold!
Not forever, just for the next few months. My daughter, a young adult, had extensive foot surgery. We were not prepared for what followed. I'm now her full-time caregiver. She’s not permitted to walk. There is a 36 pound cooling machine to drag up to her bedroom and then back downstairs every day. She's in pain. I suffer when she suffers. My work and personal life is upended. I can do emails but only once I get her settled…at around 9 PM every evening. I am definitely not at my best. My co-workers have been terrific! They cover my absence but there are relationships, presentations, strategy meetings, etc. that I attend while not at my best! Some friends also pitch in. They bring food and stay with my daughter when I run errands. My additional full-time role? Her adorable, affectionate puppy. I’m not accustomed to all the care required for a dog. The energetic playtime, the walks, the carrying upstairs, the scheduled veterinarian visits, the feeding, the grooming and the wonderful cuddles and puppy kisses. I stopped going to the gym. I’m not eating regular meals -especially not nutritious ones. I sleep with one eye open in case she or the pup need me. Who knew?I admire caregivers- it’s physically, emotionally, and financially very demanding.
Retirement Can Be a Risky Business
A recent paper from The Center for Retirement Research at Boston College called out risks that people likely will encounter as they retire. The paper addresses five risks that may affect the lifecycle of a typical retiree household. Learning about options to offset these risk are basic to planning for extended or long-term care. • Longevity Risk – The risk of living longer than expected • exhausting financial resources • negative impact on family/friend caregivers • Health Risk – Retirees can face: • unexpected medical expenses • long-term care needs and expenses since as one ages out-of-pocket expenses rise quickly. • Market Risk – Risks include: • market volatility, such as selling during a downturn • housing market volatility and accessibility. Most retirees want to age in place but may need to downsize or remodel their home • Family Risk – This can include: • divorce or death of a spouse • children becoming ill or unemployed • family members becoming caught in the ‘sandwich generation’ • Policy Risk – • social security is the primary income source for many retirees. According to the Boston College paper, the program’s trust fund reserves are projected to be depleted by 2035 and people may experience a 20-25% benefit reduction after that. • Many retirees depend on Medicare, Medicaid, Veterans Benefits, Supplements, or other government programs which are expected to undergo modifications
Rule Expands Rollover Protections
While aspects of the rule were already in effect, on July 1st, regulations from the U.S. Department of Labor that expand liability for financial advisors who give pension rollover advice went into effect. Many advisors already explain the pros and cons of rollovers but now they must provide rollover clients with a written explanation indicating the specific reasons as to why the investment professional and/or financial institution believe that the rollover is in the client’s best interest. Advisors who carefully explain the risks and suggested allocation of the transferring funds will likely create a long lasting relationship with the client.
Seeking Investment Protection & Growth
Preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey shows total U.S. annuity sales grew 22 percent to reach $77.5 billion for the quarter. According to the release, “this marks the highest quarterly sales ever recorded” since LIMRA started tracking monthly sales in 2014 LIMRA notes. Investors are seeking investment protection and steady growth. According to Todd Giesing, assistant vice president, LIMRA Annuity Research, “Our research shows fixed-rate deferred annuity manufacturers are, on average, offering interest rates more than four times that of a bank CD, which has made these products a tremendous value for investors looking for protection and growth potential.
Todays Caregivers
The Caregiving in the U.S. 2020 report presented by the National Alliance for Caregiving (NAC) and the AARP Public Policy Institute shows that the majority of caregivers (61 percent) are still female. Significantly, a larger percentage of women (67 percent vs. 59 percent of men caregivers), are the primary or sole provider of care and provide a high intensity level of care for more hours per week than non-primary caregivers. As a result, their life balance equation becomes seriously out of balance. Most families/friends don’t recognize or acknowledge the increasingly difficult situation until the caregiver already experiences negative consequences. A nationwide staffing shortage and the effect of being a sole or presumptive caregiver are so widespread that some states are looking at ways to provide caregiver support. Minnesota for example, is making it is possible to provide personal care for loved ones and get compensated for it. There are several options for becoming a paid PCA in Minnesota. However, there are a few specific things that are not allowed, such as providing any type of medical services. A newer Hawaii law provides workers caring for older friends or family members with up to $70 a day, Benefits Pro reports. The stipend is available to those who work at least 30 hours a week and also have caregiving responsibilities.
What’s in a Name!
What’s in a Name! We all want to enjoy a long life and we want to do it in a familiar setting-the one we call home. Continuing Care Retirement Communities (CCRC) are one option popular with older adults. However, according to LeadingAge and Mather LifeWays, the owner and operator of several CCRCs, what’s in a name counts! Lots! “…CCRC no longer did an adequate job of creating the best perception among tomorrow’s older adults,” said LeadingAge President and CEO Larry Minnix. The results indicated that the words “continuing care” suggest a setting where older adults are cared for rather than a setting that also fosters growth and new experiences. The new name, Life Plan Community was the result of the culmination of the CCRC Namestorm process—its name a play on the word brainstorm—that began almost two years ago. In fact, 84% of prospective residents aged 65 or younger said they preferred a name other than CCRC for the category. So, chose your words carefully!
I’ll Create a Plan-Tomorrow!
Many of us are not natural planners. We often put off doing today- what tomorrow we wish we had done. We all do it! We often do better when we plan with the help of others. It could be a mentor, a parent, a teacher, an agent or advisor who educate us or inspire us to plan for our tomorrows. We are always so grateful when planning saves us from avoidable, unwanted consequences. We all have memories from childhood and hopefully not too many from adulthood, when we admonished ourselves for not planning. Longevity is reality. We certainly understand why we need a plan to deal with health care issues.….but what if our health is not as good as it once was. What’s the plan? What about lifestyle and safety needs? What about financial needs? What about generational relationships?What’s the plan? One's destination is never a place, but a new way of seeing things.— Henry Miller
Sibling Rivalry
Arranging care or providing care for a parent is the ideal environment to start off infighting among family members. It can blow up lifelong relationships, or worse lead to costly lawsuits. Too often, the lack of a plan leads to stress and discord. Too often families think if they ignore it, it’ll go away. Bulletin: The conflict doesn’t go away. It festers. My three step plan creates a thoughtful structure that reflects the family’s mission and values resulting in a more collaborative and private resolution. Each step fosters inclusivity instead of exclusivity by offering three structured steps and actionable information creating multiple generational opportunities to communicate in a constructive way. An advisor may serve as a mediator or facilitator to encourage cooperation and timely planning.
It’s Only Possible To Live Happily Ever After
According to Margaret Bonnano, it's only possible to live happily ever after on a day-to-day basis. Ms. Bonnano — best known for writing a series of "Star Trek" novels between 1985 and 2010 — proposes that life should not be considered an abstract concept. Instead her simple but poignant observations suggests it is the aggregate of how we spend each of our days. It creates our present, past, and future. Why is it that we have such a difficult time acknowledging and planning for longevity issues. It reflects the natural order of the universe. While it is never too early to plan for extended or long-term care, it is often too late. Her statement is a powerful motivator — a reminder not to waste any time.
Figuring Out Finances
Aging-in-Place is now on everyone’s budget list. Affordability is a key, strategic element. According to an Association of Community Living article, updated February 18, 2020, the average number of years people who need in-home care is 2 years. The ‘average’ cost called out in the 2020 article is $62,000 per year. For most individual’s budget, $124,000 spread out of a couple of years would impact both their lifestyle and retirement plans, those of their spouse or partner, and those who may have to help provide for that care. Let’s note that the costs probably do not reflect the realities of caregiver and trained staff shortages that became evident during the pandemic. As indicated in my book, figure out financial assets or obligations in order to organize potential ‘can and cannot’ age-in-place scenarios for yourself, spouse, or parent. This except, with a fuller list of questions in the book, will kickstart creating an overview or help to fill in the blanks on a budgeting tool.
Setting Up Communication Channels
David Foster Wallace wrote, “The most obvious, important realities are often the ones that are hardest to see and talk about.” Any caregiver or family dealing with or planning for extended and long term care issues would quietly nod in agreement. That truism is the inspiration for my book. Starting the conversation may be difficult but continuing the conversation to a create financial, physical, and psychological solution is even more difficult. The 3 Steps in this book offer a program that fosters communication, if not cooperation. Like any successful undertaking, the goal is to prepare for what’s ahead. Without preparation and planning, there is no control. Why risk blowing up multigenerational lifestyles, relationships, and retirement plans.
Home Has Become Crowded
More and more, home is seen as part of the continuum of care as many of the nation’s 72 million baby boomers intend to age in place. That presents several planning/funding challenges. Historically, housing design did not take into account the aging process. Renovations can be costly as can hiring help and aids when needs arise. Alternatively, you can consider moving your parents into your home. But that presents a whole different myriad of complications. Let’s just stick to the practical. Before the pandemic, just 6% of employees worked primarily from home. Post pandemic, home can be where we work, go to school, talk to doctors, do our shopping, work-out, and socialized. So where do you find extra space in the post-pandemic home? While new and old technologies helped us to quickly adapt to the new “home,” they did not provide the additional space for multigenerational living. The solution is to plan-in-advance for aging-in-place, especially if that you define ‘place’ as your home environment.
The Biggest Challenge
According to WTW, a global advisory, brokering, and solutions company’s 2022 Emerging Trends in Health Care Survey, 73% of respondents said that their biggest challenge is delivering on their promises over the next two year due to increasing healthcare prices. Many employers will be relying on virtual care as a large piece of their “lowering healthcare cost plan.” Ninety-five percent indicated that by the end of 2023, they’ll be offering virtual care for medical and behavioral health issues with sixty-one percent expecting to offer lower cost sharing for virtual care. And 55% said they believe upping their virtual care game will help decrease costs in the long run, and another 50% think it’ll improve outcomes. Employers, employees, and retirees will need to prepare for this challenging and evolving delivery landscape. Will everyone embrace visual care as it becomes more mainstream. How will care recipient's prepare for these challenges and how will rising cost of health care affect care options? Simply put-everyone needs to create a financially stable plan to cover healthcare costs- now and in the future.
Dealing with Increasing Care Costs
Creating a financially stable plan for extended or long-term care needs means understanding the associated costs for care. Everyone, especially after what we all saw during the COVID pandemic, decidedly would prefer to age at home. According to industry information available at www.McKnights.com, increases in salaries from the executive level to all other levels of the workforce are on the rise. Most providers are willing to pay significantly higher salaries than just a year ago. That’s good news. We trust these employees with the well-being of our loved ones and, traditionally, they have not been rightfully compensated. On the other hand, that translates into an increase in the cost of care and likely continued increases for some time to come. This requires a review for those who have a plan. It becomes a real issue for those without a plan. This informative is instructional but also sobering. All of us need an extended or long-term care financially stable plan.
Critical vs Terminal Riders
The insurance industry creates products and programs in response to consumer demand. A rider is an insurance policy provision that adds benefits to or amends the terms of a basic insurance policy to provide additional coverage. Insures must meet established regulatory, legislative, and tax code requirements. Respecting established rules and regulations, insurers have created ‘riders’ which incorporate flexibility. The products that have ‘riders’ are designed to serve two needs or offset two risks. Riders may come at an extra cost—either at the time when premiums are established or when the payout for the rider is determined. This is an area where advise from an agent or advisor is a must.
Medicare Costs & Retirement
When considering planning for individual or family income needs during retirement, the cost of Medicare may not be top of mind. However, Medicare premiums can escalate dramatically-especially with higher incomes. Currently, it can be as much as 240% higher than the standard rate. The premiums are based on modified adjusted gross income (MAGI) from two years prior which is when many retirees reach their peak earning level. Regardless of a retiree’s earning level before retirement, expenses associated with Medicare should not be overlooked in planning for retirement income needs. Planning to have Medicare cover extended and long term care expenses in retirement is not a plan and will exacerbate income shortages if care is needed.
Longevity Challenges in Retirement
Today’s advisors need to include a discussion about the costs associated with living longer in retirement. For many people, that may also include additional costs associated with being a caregiver which may negatively impact their ability to save towards their own retirement. In our story, Jodi’s life is slowly taken over by the increasing care needs of her parents. After working through the 3 Steps and having their advisor serve as a facilitator, Jodi gets her parents the type of care they need, at a cost they can afford, in a setting of their choice. When she suggests to her children that she doesn’t want them to be caught in the caregiving sandwich generation, they, at first, panic and assume she is ill. It’s a real struggle for younger generations to understand the positive role early long-term care planning plays in a secure lifestyle and retirement. After visiting a site that estimates a person’s longevity, the Care Planning Team begins to understand why the best time to plan is now.
It’s Springtime! What Can You Grow?
It's Spring! A time when many of us consider growth-not just of gardens and flowers but also growth for securing our future. According to the Devenir 2021 Year-End HSA Survey, plenty of people are doing just that. Americans had invested more than $100 billion in more than 333 million health savings accounts as of the end of January 2022. As the Care Planning Team (CPT) discovers, a Health Saving Account (HSA) is a very effective funding mechanism for health-care costs. And, importantly, if money is withdrawn for qualified long-term care expenses, the growth and withdrawals are tax-free.
Cash Flow Concerns
The smallest deed is better than the grandest intention. When we are thrown into a situation, without some preparation, we may overreact and overreach. Is there anything in life that doesn’t work better with a little preparation? When it comes to financial matters, that is certainly true. An extended care event will impact your cash flow unless you are otherwise prepared. You need cash flow for daily living expenses, you need cash flow for family/friend events and vacations, and you need cash flow for saving, investing, and financing activities. In our story, members of the Jones family are quickly seeing the value of financial preparation for extended or long-term care needs. Fortunately, members of the Jones family are in their working years. Some of them take advantage of a saving plan, called a Health Saving Account (HSA). HSAs are a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. It’s part of the Jones family preparation since they can use money from their HSA tax-free to pay long-term-care insurance premiums, with the maximum annual tax-free amount based on their age. Like most financial instruments, they need to understand all the requirements so their Care Planning Team will look into the pros and cons.
Caregiving Impacts Retirement
In our story, Jodi is her parent’s caregiver. Aside from the effect it’s having on her overall well-being, she overlooks how the demands of caring for her mother are already negatively impacting her ability to advance her career. Eventually, like so many caregivers, she hasn’t even thought about the complications if her father also needs care. She also hasn’t thought about if something were to happen to her husband and she was no longer covered under his plan, she would need the salary and worksite benefits attached to her own employment. How will she manage if care duties result in her voluntary or involuntary termination. Aside from the consequences of losing her employee benefits, long term she jeopardizes income dedicated to her envisioned retirement lifestyle since she will likely not have funds to contribute to an employee sponsored or personal retirement savings plan. An additional financial consequence is the negative impact that the lower or absent income will have on her eventual Social Security benefit.
A Woman Caught in the Sandwich Generation
To quote George Elliot, “What do we live for, if not to make life less difficult for each other?” The basic drive to nurture manifests in the care and development of our children and young friends. But what happens when our parents have care needs such that they become our children? Women of all ages and ethnicities are major providers of long-term care in this country. Eventually, they may have long-term care needs of their own. It is well documented that women tend to live longer than men, tend to outlive their spouses, and generally have less assets in retirement savings. Additionally, the substantial high cost of providing for someone’s care needs and the demands on a caregivers’ time and health are, in many cases, immeasurable. The only relief from the negative side effects attached to caregiving is to plan in advance. In our story of the Jones family, lessons learned resonate with Jodi, the caregiver, as she engages her family to create a plan so when the parent/child equation becomes upside down, they are generationally prepared.
Things That Bring You Joy
As we live our lives, we make many choices. Some are driven by family upbringing and generational events, others come from what we learn along the way, and others are forced upon us. We experience things that we enjoy. But what about things that bring us joy? Turning a very difficult conversation or experience into something that offers us peace and family harmony is the overall purpose of the Three Steps. In the Jones family, using the 3 Steps, they find a way to help Grandma and Grandpa age in their own home. Even though the family only managed to work through the first 2 Steps, they were better prepared for the harsh wake-up call when Grandma fell and got hurt. Once the emergency passes, family members needed to get back to their own lives. Step 3, the Care Planning Team (CPT) helped them do just that. During this step, they discover options that will work- and some that financially or due to underwriting won’t work. They also discover some side benefits of working together-and the results brings them joy.
Peace
Peace may be defined by your state of mind, your state of being, or by the state of global affairs. Globally, we now are experiencing the end of ‘abundance thinking’ due to supply-chain disruptions, the pandemic, and the situation in the Ukraine. At least 70% of communication between ourselves and others is non-verbal. Observe how quickly children sense stress and anxiety without any real understanding of the issue-at-hand. Adult generations do the same. So when a family caregiver responds with ‘I’m fine,’ other family members know otherwise. So, how do you prepare? In the story of the Jackson family, we see this family has used 3 Simple Steps to work out a plan for her parents that relieves caregiver Jodi of her deteriorating health, negative career and financial impacts, and family stress. Lesson learned combined with the recognition of the end of abundance thinking, Jodi wants to create a plan. She wants to create ‘peace’ within her own family regardless of the stress that comes with illness, aging, or state of mind. Jodi kicks off the meeting by sharing the social security online estimator which offers the average number of additional years a person can expect to live. While she cannot control the global situation, her goal is to create family peace and harmony.
Celebrating the Women in Our Lives
Each year, on March 8, we celebrate International Women’s Day (IWD). International Women's Day was celebrated for the first time by the United Nations in 1975. This Global Day of Recognition celebrates the social, economic, cultural and political achievements of women. Significant activity is witnessed worldwide as groups come together to celebrate women's achievements or rally for women's equality. However, there is one thing on the horizon that can impede a woman’s advancement of her dream of a successful career and a financially stable lifestyle. It’s a loving thing. She puts her life on hold in order to take care of a parent with extended or long-term care needs. As we see in our story about the Jones Family, due to the pandemic, the family has not gotten together for some time. They decide to do zoom birthday celebration for Grandma Carolyn. The family is shocked to see how unstable Grandma has become and how much aid Grandpa James must offer her. Like most families, the Jones don’t discuss the grandparents growing care needs. It’s a difficult topic. But for Jodi, the consequences that ensue are gradually derailing her career goals, her health, her financial plans and her wellbeing.
Twenty Years from Now
“Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do” wrote H. Jackson Brown, Jr. who credited the statement to his mother, Sarah Frances Brown. When it comes to planning for extended or long term care, those words certainly ring true. A lack of planning has immediate consequences and possibly consequences that will reach 20 years into the future. Nowadays, planning options are expanding and there is a growing marketplace that offers many choices and planning tools. Get educated and get planning!
An Advisor/Agent Tool
Recently, an advisor mentioned to me that he and a colleague are using the book as a basic “textbook” to become familiar with limited, extended, and long-term care options. It’s part of fulfilling their fiduciary obligation. The links, charts, diagrams, and footnotes allow them to dig deeper so they have the ability to work more effectively with their client. The story of the Jones family provides a human context to the data and information, especially when shared with a client…which is exactly what they are doing. It’s a less invasive way of creating a practical approach to a ‘taboo’ topic.
LovEvolution
I heard someone use the term “Lovevolution.” Of course, it had to do with associating the month of February with celebrating love. The expression reminded me that we seem to continually invent new terms of endearment. On the other hand, actions speak louder than words. Gifts will always be a welcome sign of affection, so why not plan to give the gift of unity and harmony. Typically, when someone gets hurt or needs immediate care, everyone wants to take charge and help. That’s a loving gift, at least in thought. In practice, it often results in panic, confusion, and blame. In our story, Grandma Carolyn, unsteady on her feet, takes a fall. Grandpa James tries to break her fall and they both tumble to the ground. Participating and helping at a time of need is a loving action. So, everyone rushes in with suggestions. The results can be very chaotic. Step Two of the Three Simple Steps uses a simple diagram to create a Care Squad which assigns every generation a way to express their love and devotion. Let’s see how the Jones’s family made out.
Who is Your Valentine?
Valentine's Day is meant to celebrate anyone you love and cherish. Take a second to think about who really matters to you. Take a moment to think about how those you love in each generation interact with one another. Sometimes we don't even notice or acknowledge that a family member is singly handling the emotional, physical, and financial chores of caring for someone they love...someone you love too!
Winter; cozy and slippery!
Winter has long been considered a time to hunker down. It’s a time to take stock of where you are in your life’s journey. For some, winter promises fun times, building snowmen, marshmallows happily bouncing in a sea of sweet hot chocolate bliss, a long overdue conversation while you relax by a warm fire. For others, as Shakespeare wrote, “Now is the winter of our discontent.” Vehicles sliding out of control, colds, Omicron, slips, and falls. In our story of the Jones family, while at a get together Grandma Carolyn slips and falls. Grandpa James tries to break her fall- and they both tumble to the ground. The challenge is how to handle this unexpected care need. The atmosphere on the zoom call is one of worry and discontent, no matter the season.
Envision Your Future Self
We often use this time of year to walk backwards through our lives where we revisit all kinds of things we should have done, glad we did do, will never do again…well, you get the picture. But what about the future? Envisioning our future selves is more of a challenge. We know things will change; they always do. We also know that our health will determine, to a great extent, what will be written in our future life chapters. Sometimes we forget that the health of those we care about, will also become part of our new year’s stories. This year, think about the unexpected, serious care needs that the last couple of years of the pandemic inserted into our lives. How would you better plan, better prepare for extended and long-term care needs? Whether sudden or gradual, it changes and alters the future that we envision. Explore your options and then seek out a professional advisor who can help you envision possibilities for a more financially secure future.
Links the past, bridges the future
Each Year, as January ushers in the new year, we are encouraged to take time to reflect, reaffirm, or adjust our values as manifested in our everyday lives. As Alex Haley explored in his work, “Roots,” “In every conceivable manner, the family is link to our past, bridge to our future.” Though family can be complicated, those ties can tell us a good deal- about ourselves, as physical, psychological, and societal beings. When the pressures of extended or long-term care needs for family members start to become part of our everyday lives, without a plan, families can find themselves gradually torn apart. Everyday activities may become disrupted, work schedules may become jumbled, and leisure time may all but disappear. As we see in this story, extended care needs also impact family members future retirement plans. Knowing how to approach planning for family members care can offer a more financially stable bridge to the future.
"Wisdom is organized life."
Science is organized knowledge. Wisdom is organized life. William Durant, author of this statement, had an uncanny ability to synthesized complex philosophy concepts and historical events into digestible narratives. The science behind the aging process is complex and very personal. Do we use the wisdom we gain from available science and knowledge to better organize, prepare, and stack the deck for more positive outcomes as we age ? In our story of the Jones family, we see that they narrowly escape having Jodi’s life overtaken by caring for her aging parents. Based on the realities that come with her parents aging and care needs, she works with family members to create a suitable plan for her parents to age in their own home. Jodi, all the wiser from the experience, suggests that she and her husband consider a “redo” for themselves. She doesn’t want her children caught in the ‘sandwich generation’ syndrome. She has learned that using Three Simple Steps will lead to a plan that looks at available planning options which work in tandem with their current financial life. Getting their future care lives organized now will be especially effective in helping to create a financially stable future for her, her husband, Jackson, and by extension, her generational family.
Will you become the “presumptive caregiver?"
Sometimes you need to alter life a bit, like a new shirt that just needs a small alteration to make it fit better, to make it fit you better. It’s January, a month well-known for setting New Year’s resolutions. Are you resolved to alter your life a bit! There is a good deal written on how important it is to set manageable goals. Many people who succeed in achieving their goal create a plan which involves looking to family and friends for support. The problem is that without a goal that includes a plan for care needs as we age or become ill, family and friends may look to you for support- which was not part of your plan. It actually interferes with your goal. In this story of the Jones family, Jodi finds herself giving up her goal. She was working towards a promotion as a step towards her long-term goal of insuring a financially stable retirement. Instead, she finds she has become the “presumptive caregiver” since her parent’s goal is to age and receive care in their own home.
Heartfelt Family Committment
One of the greatest regrets that we hear from people is that they didn’t live lovingly enough; that they didn’t invest their time and energy in the hard work of protecting their generational family. We need to ask ourselves; do I have enough heart for those who support my life journey? At the end of the day, we’re more likely to regret a busy life lived too carelessly - that is without caring for those who cared for us. Not every road is laid out for us. We have to believe we can move forward together and take the first step. But it’s not always easy to find a way forward-even with good intentions and a caring heart when it comes to planning for limited, extended, and/or long-term care. Visit with the Jones family and see if their journey leads you to a more physical, psychological, and financially stable plan for those you love….including yourself.
Three Simple Steps
How Not To Tear Your Family Apart offers Three Simple Steps to position the advisor, wealth manager, agent, attorney, or specialist as the interpreter of options to prepare for extended or long-term care needs. The Steps invite multiple family generations to work with a professional to fully explore the options offered during the fictional family’s quest to understand how different options prepare different generations to plan for extended care needs. It is the fiduciary responsibility of professionals to help clients understand how to protect their future from the unwanted consequences of not planning for care needs. As the Pandemic illustrated, being unprepared for unexpected care needs, as well as those that come with aging and longevity, can create stress that tears lives and careers apart. This story book offers three steps to guide these difficult but necessary conversations.
Happy New Year! Let’s Plan!
Welcome 2022! Ringing in the New Year is an excellent example of the power of positivity. For many of us, while it coincides with some of the darker, chillier days of the year, it also represents a reason to focus on the future. Many of the great turning points in life are reflected in future plans. Plans are usually reached through incremental steps and solidified through gaining new knowledge and insights. Importantly, knowledge is often filtered by generational and behavioral finance attitudes. We look at events and information that influence our future plans through personalized lens. It’s a real struggle for younger generations to understand the positive or negative role that planning for extended and long term care needs can have on multiple generations. 2021 highlighted the importance of family support and teamwork when an unplanned health event, such as a Pandemic, occurs. Planning helps to avoid any individual family or friend from shouldering the burden of providing care while juggling their own responsibilities. Let’s Plan-Not Panic in 2022!
It’s a New Year!-Let’s Plan!
Ringing in the New Year is an excellent example of the power of positivity. For many of us, it coincides with some of the darker and chillier days of the year, yet it also represents a reason to focus on the future. As we reflect back, 2021 was, arguably, the worse year in recent memory. Globally, we saw how smart and not-so-smart decisions end up defining our lives and the lives of our family and friends. Many of the great turning points of life are reached through incremental steps and solidified through gaining new knowledge. Importantly, knowledge is often filtered by generational and behavioral finance attitudes. In other words, we need to look at the opportunities to plan for our futures through our own lens. It’s a real struggle for younger generations to understand the positive role that planning for extended and long term care needs can have on multiple generations. However, 2021 highlighted the importance of family support and teamwork team-work when an unplanned health event occurs. Planning helps to avoid any one person shouldering the burden for others.
How Not To Tear Your Family Apart
Jodi was fast becoming the family’s “presumptive caregiver.” She stopped exercising, eating right, sleeping through the night, started to neglect personal relationships, and was passed over for a promotion. She knew things would only get worse. Is there time to plan or is it too late? It is such a hard conversation to have…….Are you Jodi or has someone you love taken on that role? As Alexander Graham Bell said, ”The only difference between success and failure is the ability to take action.” I have created three simple steps to help you and your family take action. If the subject of aging and care is taboo in your family or circle of friend, then just discuss the Jones’s family journey. As Yoda said, “In a dark place we find ourselves, a little more knowledge lights our way.” Extended or long-term care needs and costs can upset your life and the life of those you love.Those conversations are not easy to have but the reward is a fuller, richer, and more peaceful life for everyone.
As we move through the seasons of our lives
As the seasons change, we embrace the youthful exuberance of the early summer light, the shortening days of fall, the colder, dimmer warmth of winter’s light that eventually gives way to the brightening days of spring. It’s a natural progression. As I learn to enjoy or find solace in each changing season, it reminds me that we also have seasons. We prepare for nature’s changing seasons but we are not so quick to prepare for our own natural changes as we move through the seasons of our lives. While it’s never too early to plan, it's unwise to find yourself unprepared. Just as a snow shovel in summer can’t do you much good, the wrong plan or no plan won’t do you much good. Now is the best season to become educated and plan for the later “seasons” of your life.
How Not To Tear Your Family Apart
November is Long-Term Care Awareness Month. Experience is an excellent teacher but it can be a harsh master. Families, no matter how you define family, already come loaded with lots of built-in dynamics. Now is a good time to become familiar with options that may avoid physical, psychological, and financial stress. We are all getting older (that’s the good news) but remaining independent may not always be possible. My three simple steps helps you to create a game plan. You will be able to plan more effectively as a family and with advisors. Gain an overview of how you can prepare to “help,” not “handle” both the challenges and rewards and support both current and future caregivers and care recipients. Don’t tear your family apart when three simple steps can help you create a plan that personally works for you and those you care about.
