Family Living Focus: Don’t delay planning for the future
Due to medical and other technological breakthroughs, people are living longer these days. Because of this, many people wrongly assume that they can put off getting their affairs in order for a few more years. However, exactly the opposite is true.
While living in a time with wonderful medical advances means that many of us can expect to live to a ripe old age, the scary reality is that we often didn’t plan for that long life. The nest egg that we put away for our retirement years ago was probably designed to last for twenty years or so, taking us from the historical retirement age of sixty-five to our mid-eighties, if we were lucky.
The reality is that for many such people, their planning will have them come up short since they may live well into their nineties. Making matters worse, many older adults assumed that the equity in their homes would cover their final years, if there is a collapse of the residential real estate market over several years, that may no longer by true.
Everyone is also aware of the roller coaster that is the financial marketplace. The best time to start planning is when you are young enough to take steps that can have a positive impact on the outcome, but many of us don’t.
Here’s what we are facing. Statistics tell us that at least 70 percent of people over sixty-five years of age will require assistance with activities of daily living at some point during their lives, and typically this will continue for three years, including one year of full-time or nursing home care. One year of paid care at home, assuming you need periodic personal-care help from a home health aide (the average is about eighteen hours a week) will cost almost $20,000 per year, based on current national statistics. Multiply that by two years, and you are looking at $40,000 just for this one expense. The current average cost for a semi-private room in a nursing home is $75,000 per year, bringing the average expected total bill for care up to nearly $125,000 per person. (Adult children in their fifties and sixties would benefit by exploring purchasing long-term-care insurance while still young enough and healthy enough to obtain it for a reasonable premium.)
Planning ahead might also help you decide when to stop working and when to begin taking your Social Security benefits. This is a complicated decision and depends a lot on your income while you’ve been working, the lifestyle you envision in retirement and the assets and insurance you have to draw upon in your later years. Doing a little analysis might help you determine that it is prudent to continue working a bit longer than you might otherwise have planned.
Finally, living longer might mean that you are living without your spouse for many years. If you’ve assumed you will have two Social Security payments and perhaps two pensions, you might be surprised at how dramatically things change (and how immediately) when you lose your spouse. It’s helpful to plan a budget that is comfortable on one retirement income to protect the surviving partner from a significant change in lifestyle following the death of the other spouse. Of course, one way to plan to mitigate this is through the use of life insurance or the accumulation of assets that can be liquidated to help pay living expenses.
Planning ahead is always a good idea, but even more so now that we have to plan for longer and longer periods of time. However, we’ve all met that person who carries on about how worried he is about the future or who talks about being afraid of what will happen to her. How often do we find ourselves thinking (or saying), “Why don’t you stop talking about it and do something?”
Why is it so hard to overcome worry and fear, make a plan, and then act on it?
Some people seem to need to have something to worry about. We can call them the “worry warts.” They seem wired to worry, and if there isn’t something worth worrying about, they’ll create something.
But let’s assume that we are talking about the rest of the population–those who don’t want to worry about their future but can’t seem to figure out how to stop.
The most important thing that each of us needs to do is to start planning. Making a plan is a huge step in reducing worry because the simple process of thinking through what you will do if this or that happens can make the unknowns feel less daunting. Once you’ve made the plan, you need to put it into motion. This is where so many get stopped in their tracks. The plans are made and neatly bound and placed in the file cabinet or bookshelf, never to be looked at again.
Let’s say that part of your plan is to slowly go through and streamline your belongings, because you have given a deposit to move to a senior living community and you realize you will have a smaller home with less storage space. With good intentions, you tell yourself that you will get the clean-out done over the next few months. You try, really you do, but you’re just so busy with the grandchildren, a cruise, and your book group. Suddenly months have gone by and you’re in a panic, staying up at night worried about where everything will fit in your new home when you move in just a few days.
The easiest way to guarantee that you implement your plan is to build in some accountability. Set deadlines and milestones for yourself, and then enlist someone to make sure that you accomplish them.
For example, in this case, if you had hired a professional organizer or a senior move manager, that person would have kept you on track. You did the first part by setting a deadline, but you weren’t able to hold yourself accountable.
A good professional will make sure that you execute your plans and achieve your milestones. He or she might have to engage in some tough love at times, but you’ll be glad in the end. There’s a reason why weight-loss programs that require you to weigh in post consistently good results, and why working with a personal trainer helps most people who engage the services of one to stay with their exercise plans.
Dealing with the business of life is no different. If you want to worry less, make a Life Transition Plan and implement it. And if you want that to happen, hold yourself accountable.
Taking the time to plan ahead for your own or your parents’ long-term-care needs will reduce the inevitable stress when the time comes. You will have an idea of the resources that are available to help yourself or your parents, and you will have prepared for how to pay for it. If you as an adult child have siblings, it helps if you are all on the same page regarding how each of you will contribute to your parents’ care, whether it is financially or by providing hands-on care.
So where do you begin?
No matter if you are the older adult or the adult child, you must both begin at the same place by acknowledging the fact that time is passing and soon enough you will be facing the finish of what has hopefully been a long and fulfilling life for you, or a life well-lived for your parents.