AgingOptions Life Plan: Finance

“Will I have enough assets in order to not run out of money before I run out of life?” is top of mind for all of us in the final third of our lives. In answering this, preservation, positioning and passing of accumulated wealth goes beyond traditional estate planning. It calls for all affected family members to be participants in a model that integrates health, housing and elder law considerations.


Recognizing the out-of-pocket costs of caregiving

Are you prepared for caregiving costs? The cost of providing care for yourself can be quite staggering but what many people don’t include in their financial planning is the cost of providing care for family members other than a spouse.  A survey by Caring.com found that almost half of all caregivers shell out $5,000 a year for medications, medical bills, in-home care or other costs associated with a loved one’s care.  The survey also found that about 7 percent of caregivers were shelling out $50,000 a year.

Those costs can include insurance premiums and fees not covered by insurance such as high deductibles, co-pays, dental care and hearing aids. According to a study in the Journal of General Internal Medicine, in the last five years of life, Medicare recipients paid an average of nearly $40,000 during the time-frame from 2002-2008 for out-of-pocket medical costs.

The Caring.com survey found that half of users say they spend $500 or more on pharmacies. Other costs such as communal living and in-home care costs can also bust the budgets of family members.  This is one example of how not having a family meeting to discuss these issues can bite you over time.

Yet another reason to have that conversation is that adult children are often unaware that their family members have access to resources that could provide relief from cutting into their own assets to pay for care. Geriatric managers, Elder Law Attorneys, and Financial Planners provide professional experience to help you navigate retirement planning.  Their experience can help save time and cut costs.  Just for starters, they’ll know options for paying for and providing care and tax breaks caregivers are eligible for.  Beyond that, they can help diffuse family situations so that the family can concentrate on the loved one.

And finally, when caregivers concentrate solely on their loved ones, they often neglect their own life, often sacrificing their own retirement benefits and healthcare to their own detriment in order to provide for someone else.

Getting a late start on retirement savings doesn’t mean you can’t win the race

Saving for retirement can be a daunting task.  There are student loans, the cost of raising children, the mortgage on your house, health emergencies…the list can seem to be endless.  Click here to see the long list of reasons we don’t save.  If you’re like most Americans, you don’t have enough retirement savings socked away to last the possible decades of life you’ll live after retirement.  However, even those in their 50s can still manage to overcome at least some of that shortage by taking a multi-prong approach according to the Wall Street Journal.  It can be daunting to think about saving 15 to 20 percent and for many people even considering it is a non starter.  Instead consider increasing your savings rate, postponing your retirement for a few years and holding off on collecting Social Security benefits.  While it may not be able to make up the entire shortfall, you’ll get closer to the goal in smaller, more palatable bites.

Here are some more tips on how to save for retirement even if you start late.  Even if you are in your 50s, you still have time for the magical compounded interest.  No matter whose article you read though, you’re going to have to start sacrificing.  Either by spending less, earning more (and potentially that means a second job) or putting off retirement or some combination of the three.

Start by finding some idea about how much you’ll need to retire, there’s a mountain of calculators available, doing some research about what it will take to get there and putting some action into play rather than sitting on your hands.  Eventually, you’ll get there.  Here’s a great list of steps and tools to get you started.

Finally, don’t do it yourself.  Hire a professional to help you work smarter not harder on achieving your goals.

Most Americans not saving enough, too many aren’t saving anything

A new survey shows that more than a third of all Americans (36 percent) have nothing saved for retirement.  What’s more bothersome is that 14 percent of people ages 65 and older have no retirement savings and a significant portion of those who are saving aren’t saving enough.  Not surprisingly, younger adults have significantly less likelihood of having savings (69 percent of 18 to 29 year olds have no savings).  With fewer businesses offering retirement plans and Social Security still not seeing a fix for the problems it’s expected to see in just 20 years, the burden for retirement falls more often on the individual.  Many people give the cost of living and day-to-day expenses as their primary reason for not saving or not saving enough.  According to Bankrate, the origin of the survey, many people don’t save because they don’t have access to a workplace retirement savings plan.  Another problem though is that many are in denial about what their financial needs will be in retirement.  I’m reminded of the expression, “a journey of a thousand miles begins with a single step.”  If you don’t have access to workplace savings, consider hiring a financial professional to help you get started on the right track to retirement.

Study find savers are healthier

Saving for retirement pays back with your health.  At least that’s what a study out of Washington University found.  Workers who save for retirement evidently feel they have a stake in staying alive to enjoy it.  The result, if you’re saving for retirement, you’re probably taking better care of your health.  Researchers found that if you had a 401(k) plan, you likely paid better attention to lab results and did something to improve them.  Of course, it may not be a causal relationship.  It could be that those people predisposed to saving for retirement are naturally the sort of people who care about their health, and are conscientious in other ways.  Here’s the story.  So, what do you think?  Are you the sort of person who naturally did all the things you were supposed to do including saving for retirement or the type that saved for retirement despite a desire to bungee jump off a bridge in Australia?

Seniors get exploited–a lot–and most often by family members

Five percent or more of seniors in the United States are financially exploited (it’s estimated that only one in 44 victims report the crime), most often at the hands of family members.  Financial exploitation is the most frequent form of elder abuse and yet it mostly escapes the examination it deserves.  That’s the findings from a study in the Journal of General Internal Medicine.

About 60 percent of financial abuse occurs at the hands of immediate family members, usually adult children.  Add in so-called friends and neighbors for almost 20 percent more and you get a picture of vulnerability.  Most often the people at the greatest risk are those with the greatest to lose—the poor.

  • Financial abuse includes:
  • Taking money or property
  • Forging a signature
  • Forcing a signature
  • Using property without permission
  • Scams of all sorts
  • And fraud.

Sometimes the abusers feel they have the right to do so because they’ll “inherit it anyway,” because they have a negative relationship with the abused and feel entitled or want to prevent siblings or other family members from inheriting.

In the United States, over 70 percent of the nation’s wealth is controlled by people over the age of 50.  Many of those people do not recognize the value of their assets (especially their home or other real property).  In addition, many older people have been left behind when it comes to the tech world, leaving them vulnerable to people looking to take advantage of their lack of understanding about computers and other electronics.

If you think a loved one has been financially exploited, look for patterns of unpaid bills, new “friends,” legal documents your loved one doesn’t understand, missing property, unusual financial activity and the absence of documentation.

Financial exploitation hurts everyone regardless of whether you are the initial victim.  About 10 percent of victims will eventually be forced to resort to Medicaid as a result of being exploited.

For more information about this crime, go to http://www.ncea.aoa.gov/.  To report fraud, go to http://www.stopfraud.gov/protect-yourself.html.