Don’t Assume This Will Be Easy – Start Now
A new study by Bankers Life for a Secure Retirement, A Growing Urgency, Retirement Care Realities for Middle-Income Boomers, has found what I pretty much knew to be true: Baby Boomers are not prepared for the possibility of needing chronic care in retirement.
Even though two-thirds know someone who has required care, and nearly half have actually provided such care to a parent or other loved one, 79%, or nearly 4 in 5, have no money set aside specifically for their retirement care needs. They report Baby Boomers are increasingly concerned about staying healthy enough to enjoy retirement (56%). Of those who do have a retirement care nest egg, the median amount saved is only $40,000.
As a Baby Boomer myself, I get why folks resist it. However, nearly every day, I think about it and have a conversation about it. I’m normally an encourager but health care costs in retirement are probably going to be higher than you expect and may someday become your biggest concern.
Here are some of the reasons I see folks resisting it and what to do:
We can’t imagine needing it. Most of us can sooner imagine ourselves dead than old. According to the study, boomers have done a better job planning for their own deaths. Boomers just don’t want to think about being in a condition where we are dependent on someone else to manage our daily needs.
Other studies have shown that boomers tend to underestimate their life expectancy. I think this is because they are imagining the future only to the end of their healthy years, after which it’s lights out. But instead of dying at age 85, we could just as easily slip into Alzheimer’s or some other infirmity at that age and live on for another five or ten years in an impaired condition. This is the future boomers need to think about, whether we like it or not.
We may not need it. Or, we could stay healthy right up to the end. Some are dying early—in their 70s. As far as chronic care, they are the ones who never needed it. The Bankers Life study says 70% of current boomers will require some type of chronic care during their lifetime, according to projections from the U.S. Department of Health and Human Services. This, of course, means 30% will not need it. It’s easy for each of us to believe we’ll be in the I-won’t-need-care camp.
I’ll rely on Medicaid. If I do need care, I’ll take my chances, use my money and eventually Medicaid will take care of me. This is an option, however, for some it’s really akin to just putting it off or doing nothing.
I can’t afford it (or don’t want to afford it). Why spend money on high insurance premiums when I don’t have the money or desire. Many think (but don’t always voice) I’ve looked forward for years to enjoying my retirement. I don’t want to think about care, saving for care or spending money for care.
My children will take care of me. For some families this a possible option. I strongly recommend NOT making it your plan. Even if your children are asking to care for you, I suggest you have a backup plan in place. Life changes. There are numerous reasons this may not work out for either one of you when the time comes.
Try thinking about retirement care in a new way. Let’s do everything we can to keep you at home as long as possible.
Most of us want to stay in our home for as long as possible. As you do your next remodel sometime in the next few years consider starting to make changes that will allow you to stay in your home as long as possible.
You’ve probably already begun to slip into part of the care process. Here’s why. Have you ever spent any time in an all-inclusive resort? I know the times that Angela and I have done that we’re reminded how nice it is not to have to worry about food preparation, cleaning the room and even making the bed.
How many of these similar services are you already using; house cleaning, handyman, lawn care, window washer, meal prep service, laundry, snow removal? Most of us don’t do everything ourselves all the time any more.
As the natural slowing-down that comes with aging becomes more evident if you’re prepared it will be easier to have a helper come in and relieve some of the burden of cleaning and cooking and perhaps eventually dressing and bathing. Remember leaving all of this to a loving spouse can be brutal.
There will be a cost to having others help you. You may be paying some of that now. Over the years that cost will grow and expand. Some will be prepared with the needed resources and planning. Some will be unprepared.
I always recommend having a conversation early so plans can be made. ‘Early’ is probably defined as NOW. If possible, avoid the tough emotions that come and the desperation that sets in when you’ve waited too long and find you’re unprepared.
There are still several solutions available that avoid the high cost of insurance.
In the midst of finishing this piece PBS did a short report on retirement care and suicide. The first 2-3 minutes tell a poignant story of a family and how hard the decisions can become. The daughter shares the story of eventually running out of resources and the family being left with only Medicaid. I suggest you watch the first 3 minutes now if at all possible.
If you’re less than 10 years away from your retirement years, overlooking your future retirement care reality options may put years of hard work, hopes and dreams in jeopardy and leave a healthy spouse with very little to enjoy.
I’ve worked with multiple families (including my own) over the years with similar choices. Some were prepared and some not. I’m available to help you. If we haven’t talked about this already, let’s do so soon.
Video: https://youtu.be/ViTkDmRvWGE
