Elder Care: Retirement and Health Planning
This is the first in a two-part series on key steps you or your family members can take to plan for a more comfortable living and financial experience in the later stages of retirement. Written by LifeCare Advocates’ CEO Kate Granigan, it originally appeared in Fiduciary Trust‘s online newsletter.
As most people are aware, life expectancy in the United States has advanced considerably over the past 50 years. This has given many people the benefit of more time to enjoy retirement, but has also increased the need to manage living, care and financial challenges. Therefore, it is important to have plans in place so that you can access the necessary resources to ensure you or your loved ones can make the most out of your later years.
In 2015, a 65-year-old could expect to live, on average, to age 86. By 2050, it is estimated that there will be over 400,000 individuals in the U.S. over the age of 100.1,2 Because people are living longer, there has been an increased prevalence of challenging conditions such as dementia. Among current 65-year-olds, over 21% of women and 12% of men are expected to develop the condition in their lifetimes.3 This is just one contributor to the need for long-term care, with 70% of 65-year-old individuals expected to need long-term care at some point during their lives, according to the U.S. government. At the same time, living with family members is a less viable option than it was years ago. Since 1970, among married couples with children the percentage of dual-earner households has doubled to 60%, resulting in fewer households with a family member at home to care for a loved one.4
In response to these trends, more options for retirement living and care have developed. Many parents and their children are increasingly working together to plan for the older generation’s retirement years. Some key areas to consider in planning for aging in retirement are living environment, health care, legal documents, and financial and estate planning. Below we will go into detail on the first two areas, and the next article in our series will delve into the other topics.
There are many choices to consider when identifying the best option for where to live as you age. If asked, most people would prefer to age in their own home. Aging in place is not always the best option, however, so it is important to explore this decision early in order to understand its potential costs and challenges. If this is a priority for you and your family, you can often shed light on the feasibility of this goal by putting together a list of the potential home modifications necessary to meet mobility limitations and other challenges of aging.
If making a move to a new or “downsized” location is your goal, then you will want to consider certain factors to narrow your list. Geographical location, type of community or home setting, and proximity to adult children or others that you care about are among the most important considerations. Most people do not want to live with their adult children, and most adult children do not consider this a viable option. Instead, finding a location with family nearby, so that they are able to visit regularly but not be responsible for day-to-day care, is often ideal.
In addition to staying in your existing home or moving in with family members, there are an increasing number of living options available today. They provide different levels of flexibility to fit with your needs as you age. As you begin to consider the variety of options, here are some factors to consider for each:
REPRESENTATIVE RETIREMENT LIVING OPTIONS
- Ideal Resident: For those who require minimal assistance, or who are prepared to hire an in-home health aide if health conditions require and permit.
- Cost: Purchase or rental costs of a residence vary; 2017 median in-home health aide cost based on 44-hour workweek: MA: $59,488, NH: $60,357, FL: $45,760.5
- Key Considerations: Will this meet your needs as you age? Will this require a move if or when your health status changes? Will you be isolated if you are no longer driving?
- Ideal Resident: For those aged 55+ who require minimal assistance, seek an adult-only community, and desire a living environment that is better designed for aging than most traditional residences. This typically includes single-floor layouts and handicap-accessible features as well as a community clubhouse, fitness center and other amenities.
- Cost: Rental costs vary; some are available for purchase at differing price points.
- Key Considerations: What is the “feel” of the community? What is the opportunity to bring in assistance as needs change? Are there specific expectations of when you would need to move from this setting?
- Ideal Resident: For those who require minimal assistance, but who want access to meals, medical support, a fitness center and entertainment.
- Cost: Rental costs vary; some are available for purchase at differing price points.
- Key Considerations: What is the “feel” of the community? Is the community within close proximity to family, medical providers and interests? What is offered within the community for social and cultural engagement? Are there any specific entry requirements related to health or finance, and if so, do you meet those? What is the opportunity to bring in assistance as needs change? Does the facility offer other levels of care if needs change? Are there specific expectations of when you would need to move from this setting?
- Ideal Resident: For those who have difficulty with daily activities such as meal preparation, cleaning, medication management and mobility. In addition to providing these services, assisted living facilities typically provide social and educational programs for residents.
- Cost: 2017 median annual rent for one private bedroom MA: $67,188, NH: $58,260 FL: $37,200.5
- Key Considerations: Same as the Independent Living considerations.
Continuing Care Retirement Community (CCRC)
- Ideal Resident: For those who seek a community that has options for them to transition from independent living to assisted living to nursing care as their needs change. It can decrease the stress of finding different communities as needs evolve, which can happen suddenly.
- Cost: Significant upfront cash investment (typically $100,000 to $1,000,000) plus annualized fees ranging from $36,000 to $60,000, which may increase with the level of care needed.5
- Key Considerations: What is the financial health of the company? What are the buy-in, entry-fee and refund arrangements? Is there a waiting list, and if so, will the community still meet your needs once you are offered entry? What is the screening process for health and wellness, and do you and your spouse meet these requirements? If the health and wellness of you and your spouse differ, will the community accommodate for the difference? What is the expectation regarding movement along the continuum of care? Are you able to bring in private help if or when desired? Are there medical services offered within the community for those who choose to use those providers? Is there support for those with Alzheimer’s or dementia should the need arise?
- Ideal Resident: Typically for those with one or more of the following conditions: severe cognitive impairment, complicated medical conditions requiring constant monitoring and medication management or incontinence that the person cannot manage on his or her own.
- Cost: 2017 median cost for a private room: MA: $149,650, NH: $126,838, FL: $106,580.5
- Key Considerations: What services are provided? What are the facility’s ratings from the Centers for Medicare and Medicaid Services? If there are deficiencies, are they in patient care? What is the staff turnover? What is the ratio of private to shared rooms available? Is there any in-house therapy or is this subcontracted?
Once you determine your general needs, then comes the sometimes-daunting task of determining which community is the best fit. Unlike choosing a house, there are many additional factors to consider. Community culture, services provided, proximity to activities that are important to you, reputation and financial integrity of the parent company, and opportunity to age in place are among the factors you will need to consider before finalizing your decision. No matter how savvy you are, having your financial and legal counsel review the contracts associated with these decisions is also advisable.
Understanding your healthcare needs, identifying specialists for your care and knowing your preferences for treatment, particularly as your health deteriorates, are all important issues to consider. You will also need to determine the family members or friends that you trust to ultimately make choices for you if you are no longer able. There are many decisions that you will need to think about, and these decisions may change depending on your age, health status, religious beliefs and other personal factors. Having ongoing conversations with a trusted person around these considerations can allow you to feel secure that you have made your wishes known and that they will be honored throughout your life. As will be discussed in the next article in this series, it will be important to have the necessary legal documents in place so your wishes are documented and those you trust are legally empowered to access information and make decisions when appropriate.
There are a variety of online resources, magazines and consumer guides filled with information related to aging products and services. Organizations such as AARP (www.aarp.org) and Consumer Reports(www.consumerreports.org) can be resources for educating yourself in an unbiased manner. Make a commitment to educate yourself by attending seminars on aging offered by local agencies and credible professionals in your area. The National Council on Aging (www.ncoa.org) has a wealth of information on aging, caregiving and remaining independent as you age, as well as public policy and links to community offerings. Understanding your options from a variety of viewpoints can help you formulate your own opinions and preferences, and can often spark valuable conversations with family members, as well as with friends and community members in similar situations.
Assembling a team of trusted advisors and experts for support and guidance is a useful strategy to be “in control” as you age. Some areas in which you may need or desire assistance include:
- Healthcare coordination
- Aging life care management
- Retirement-community selection
- Financial and estate planning
- Investment and trust management
- Legal counsel
The next article in our series will touch on the last three areas listed. For the purposes of this article, we will focus on the first three:
Healthcare Coordination: Since most individuals require health care from providers across medical specialties, a key component of effective health care is care coordination. There are a few different types of resources available to assist on this front:
- Primary Care Physicians (PCPs): Most people have a PCP as the first contact for all of their healthcare needs. Depending on your health insurance coverage, you may be required to see your PCP in order to obtain a referral to other specialists.
- Care Coordinators: These are individuals responsible for helping you navigate the medical and health insurance system to ensure you receive the appropriate support. They are most involved with those who have chronic or serious medical conditions, and can help access the appropriate insurance resources, care facilities, physicians, treatments and medications. In addition, they can educate you about your particular condition and answer a variety of questions. They are often registered nurses employed by health and long-term care insurance companies, hospitals and some doctor’s offices.
- Hospitalists: In the past, your PCP would often continue to care for you in the hospital, but in today’s hospitals it is more typical to find a hospitalist in charge of your care. Hospitalists are physicians trained to focus on quality care while a person is in the hospital and meeting the patient’s needs upon discharge in order to decrease the likelihood of re-admission.
- Concierge Doctors: There are increasing opportunities to work with a concierge doctor or medical practice. This type of arrangement has benefits such as house calls, direct access to your designated doctor, and lower patient-to-doctor ratios, which in turn allows for more time and attention than is often allowed in typical doctor visits. Concierge medical services typically come with an annual fee ranging from $1,500 to $5,000, and can run as high as $25,000. Despite the cost, many find this personal service worth the fees. It is important to note that these costs are typically not covered by Medicare or private insurance.
Aging Life Care Management: Aging life care managers (sometimes referred to as geriatric care managers) act as objective, third-party experts in the area of aging, and help explore your needs and interests in order to formulate a plan to meet your goals as you age, often in partnership with family members. They are typically compensated by you on an hourly or flat fee basis, depending upon the services needed. Areas of support may include:
- Health and Disability: attend doctor’s visits, facilitate communication between doctors and families, arrange home health care or hospice support, provide guidance to family caregivers
- Financial: oversee bill paying, navigate government entitlements, assist with filing insurance claims
- Housing: help identify and select appropriate housing options
- Family Support: provide advice around care and housing options, including long-term care decisions; help resolve family differences of opinion around care
- Advocacy: promote individual and family interests with healthcare and other providers
- Crisis Intervention: provide intensive support in navigating the healthcare, rehabilitation and insurance system in the event of a medical emergency or rapid decline in function
The field of aging life care management is expanding, and there is an Aging Life Care Association(www.aginglifecare.org), formerly known as National Association of Geriatric Care Managers, that is a clearing housefor credible, experienced professionals who can provide advice and support.
Retirement Community Selection: As mentioned earlier, selecting a retirement community is more complicated than finding a traditional residence, given all the other factors and services that need to be considered. In selecting an advisor in this arena, it is important to understand their business model and how they are compensated to ensure they are clear of any conflicts of interest. Some of these groups are compensated by the retirement communities, so their interests may not be aligned with yours. This “no cost” model works for many people, but it is important to be aware of possible biases.
Regardless of the professionals with whom you choose to work, be sure to understand their experience and areas of expertise, compensation models and professional values to ensure that they are aligned with you and your needs. Most professional advisors need to comply with licensing boards, professional guidelines and codes of ethics that you can consult to confirm compliance.
In order to remain in control, you need to know when to ask for and allow help. Having agreements in place about when to ask an expert to reassess your needs and make recommendations to allow further support is critical to aging well. Having the “next level of care” or “next right steps” outlined, and triggering factors agreed will ensure that you are able to make small changes to avoid big crises in the future.
When there is an increase or new presence in one or more of the following areas, these are indicators that you may need to reassess living or healthcare arrangements:
- Forgetting to take medications
- Difficulty remembering
- Auto accidents
- New diagnosis or increased concern around an existing condition
- Overall decline in health condition
- Death of a spouse or partner
Ideally, your plan will help guide you to the next steps in living and care arrangements, and you will have relationships with the professionals needed to help guide you and your family through any transitions in care.
For many, the increasing life expectancy at age 65 brings more opportunities to enjoy friends and family. The longer time in retirement also brings with it potential living, health and financial challenges. However, with advance planning, careful monitoring and access to the appropriate resources, families can reduce the stress of these challenges and help older family members get the most out of their retirement years.
In the next article in this series, we will address the financial and estate planning, and legal considerations of elder care.