The Great Retirement Debate: How Can We Improve Our Chances of Aging in Place? Hi, everybody, and welcome to another episode of the Great Retirement Debate. I'm here with Jeff Levine. I'm Ed Slott. And today, we're talking about a very serious topic that will affect just about everyone. Jeff? Yeah. Today I wanna ask a question. How can we improve our chances of aging in place as we get older? Yeah. Medical expenses. I mean, it's not even a question. It's it's it's at a point it's not if but when. If you live long enough statistically that's likely to be the case that you are going to need more and more care as you get older. Obviously lots of different types of care. There are those people who have physical impairments where they can't move around as easily. There are those individuals who unfortunately have cognitive decline. Some people have both. So lots of different reasons that someone may need more care as they get older. It may make it more difficult for them to live in their home. But we wanna we wanna figure out like Well, what is it? You know, it's so it's generational. It can be a parent. It can be a spouse. It could be disabled child. There's so many versions of it. That's right. So let's think about some of the things that individuals can do in order to give themselves the best chance of aging in place. And a lot of this comes down to things that aren't necessarily financial. Right? Like, for instance, one of the best things that someone can do to give themselves an opportunity to age in place is to live close to friends and family. Statistically speaking, you know, that is a really important component to this because it gives you a a support structure. People who are able to help you with certain things when you need that. Without living close to friends and family, the likelihood that you're going to need to eventually move to another location, whether that be a nursing home, assisted living, something like that, is significantly higher. Right, and health conditions. But going back to the financial, that's going to be a big mover of the decision, what can you afford? And I don't want to make light of it, but there's a saying, I think I've heard you say it and I've said it before, the best retirement plan is to keep working and building assets if you can, and start building them as soon as possible because that money is going to be critical to where if aging in place can be done because that's expensive. Yeah, and that's another really important component to this, aging in place. We're talking about keeping somebody in their home, which most people would rather do. A lot of people would rather do that, yes. Now there are some people who love the idea of going somewhere and an assisted living facility sounds really appealing to them because they say, oh, I don't have to worry about all this anymore. Well, they're more independent at that point. And then they have the hybrid places where they phase in if Sure. Yeah. Continuing care retirement communities where you can kind of receive different levels of care as you need it. So there are lots of different options. But to the point we made, lot of people say, this is my home. This is where I I raise my children. This is where I feel most comfortable. I don't wanna leave here. And so on the financial side, I think one of the most important things that people can do is to understand the costs that might be associated with bringing care into the home. And one of the surprising things that a lot of people don't realize is how little comparatively where you live matters for that. So when we look at, for instance, nursing home costs, there is a huge disparity in the cost of a nursing home between, let's say, Missouri and New York, or California and Mississippi. The same disparity does not exist in home health care. Not that there's not a difference. There is. But it's not nearly the same. It's not nearly as dramatic. And so the idea where some people go, well, I'm going to be in a when I move into retirement when I go into retirement, we're planning to move to this location, and I'll age in place at my home there, and it'll be much cheaper. That may not be the case. So from the financial end of it, just simply understanding what is the cost that it's going to, I will incur by having, let's say, assistance in my home, whether that be six hours a day because you need a little bit of help, what happens when you want twelve hours a day because you need now more help. As you get older and as you decline further in health, you may need round the clock care. What does that cost each year? And believe it or not, it can be sometimes more expensive to have that sort of care in your home if you need round the clock care than it can be to receive the same sort of skilled care at a nursing home or something similar to that. So understanding the cost is a really important factor of this. And saving enough to be able to do that, that's your goal. You may need to spend less early in retirement to keep a larger cushion later in retirement in case those expenses arise. One thing that can be done, I know lots of people have the long term care policies, but they're not nothing like they were in the past. My mom had a great policy from twenty, thirty years ago, paid all of it. Probably had a lifetime benefit, right? Yeah. Yeah. Almost impossible if Right. They paid everything. But now a product I have is the long term care rider on a permanent life insurance policy. Yes, definitely starting to see more of those life insurance with long term care riders, annuities rather, with double or triple payments compared to the normal payment if someone goes into a nursing home or has some sort of medical event even for home health care. Always important to read the fine print on all these policies to know exactly what they'll cover. The last thing you want is to buy a policy to say, oh, well, if I need I want an agent in place, if I need it, I'll have it. And then to find out that that policy only covers if you're in a skilled nursing facility or something like that. So very important to read the fine print. But look, the other thing is to make sure that people are aware of where else can I get the money? For instance, you know, for years, reverse mortgages I know. Had a, you know, terrible wrap associated with them. And today, while a lot of people still have negative feelings overall about them, a lot of times they're not quite they're not quite as as based better about Tom Selleck. Yeah, that's fair. Tom Selleck has done a wonderful job. And he leans over. He does. And he has that great mustache. I mean there's just that, I don't know if I could ever grow that mustache no matter how hard I try. But it's true, all kidding aside, it's a much more viable strategy because you're getting money out of assets that your kids probably don't need anyway. Was telling me once, it's probably true. Ninety nine percent of parents want the kids inherit the And ninety nine percent of kids don't want that house. Yeah, well, think about it. Now you have to first deal with all this nonsense after death if you have multiple children of what one wants it, one doesn't want it, one wants. Then you have to sell it. You've to split the money. It's just cash is a lot easier to deal with. But I think to that point, the reverse mortgage, when we talk about aging in place, no matter what happens with that loan, one of the safeguards is as long as you're in that home, the bank can't collect on it. So there's a safeguard in there. And compared to years ago, reverse mortgages are more regulated. They tend to be lower cost. It was the Wild West fifteen, twenty years ago. There have been significant improvements in policies and regulations since then to make these much more viable solutions. I think the other thing, though, which we haven't mentioned yet, Ed, that is critically important if we want to age in place, is to actually do the work ahead of time to make your home a more friendly environment for folks as they age. And you Nobody thinks of that, though, because you never know when something's going to to fall or something. And in fairness, you don't even think of all the things that might go wrong. For instance, just rugs that existed before may need to be taken out. They increase tripping hazards. This is where having an aging care expert or specialist come into your home before it's necessary, right, can be very helpful. They can help spot things that you might not otherwise think of. For instance, you know, are the doorways wide enough to to fit a wheelchair through? Is there a you know, we we think about big picture things like, can I get into the house? Are there stairs? But, you know, is there a shower or a tub that is easy to get into or out of? Or outlets at heights that are easily accessible. I mean, there's a there's a million and one different things, and and there's a whole, there's a whole field, a profession of individuals who can come into your home and help identify these things. And you can do it beforehand so that you're not in a rush. The last thing you want is to have to reach out to the contractor and say, I need a ramp put in tomorrow. You don't want to be in crisis situation. But that's, it all sounds good the way you say, oh yeah, we'll get somebody, but nobody's going to do that in most cases. Well that's why we're here today Ed. That's good to hopefully make more people or encourage more people to do that sort of I'm put in a chairlift when the situation hasn't even presented itself, things like that. You know what, maybe not, but there are still things like even if someone was not willing to commit to that expense because they don't know that they'll need it, there's still an ability to do some research today to find out what companies you may like or what sort parent yeah, get name like you said, prepare in advance. That's it. Have a list, the aging companies, the companies you're talking about, get a review of the house. And this would be good for say children, I don't mean the word, well I mean children but not kids. Children with aging parents. Children in their 50s or 60s maybe to help the parents. Yeah, and a great resource out there for folks looking at this would be the Aging Life Care Association, ALCA. They have individuals throughout the country. People can go online, put their zip code in, see if there's a person near them. If not, some of this can be done virtually. Obviously, going into someone's home is going to be a lot more efficient if you're in a geographic similar area. But there there is a a whole suite of professionals out there who are here to help individuals make those better decisions. Look. Even on the financial side, setting up things like bill pay ahead of time, having more things be electronic Yeah. So that someone else can help take advantage, you know, or not take advantage of it. Especially when kids live in California and New York. That's right. It makes it a lot easier for someone to go online and and pay your electric bill or your water bill. So setting up these things look. All of this has one thing in common, and that is you've gotta do the work in advance in order to set yourself up for success if and when the event happens. And, unfortunately, as humans, it's actually easier for us statistically to think of ourselves as dying than it is for us to think of ourselves as being infirm to the point where we need help. But the reality is, as you led off this discussion at saying, if you live long enough, it's more likely to be a when not an if. Right, so all of these things should be done, and it's interesting is both on the financial end, like we talked about reverse mortgage, using the house, that's a great idea. And actually that works out better the older you are. In many cases, sure. Right, so you need to set up the finances now, you can't act like we talked about just before in crisis, now I need all this money. So this is something you should think of, or the children, the adult children should be think of because they may notice things in their parents before the parents even notice things. Yeah, and look this is again where even having professional advisors can be helpful. One of the the research shows one of the first signs of cognitive impairment is actually on the financial side. That's true. And and there are times when financial professionals can actually sort of identify these things happening beforehand. And look, just even even having family conversations about when we're gonna like, when is it an okay time to tell mom and dad that they should not be driving anymore? If you have those conversations early, it can really help. So those conversations are critical. And look, Ed, thankfully, conversations like this are also critical to make sure that people listening have the information they need to make good decisions. Because better information leads to better decisions, and better decisions on the whole lead to better outcomes. And Ed, that is the mission that you and I are on here at the Great Retirement Debate, to empower all of you to make the best decisions as possible so that you and your families can enjoy the retirements you so deserve. Thanks so much for joining us on this episode of the great retirement debate, and we'll see you real soon. Jeffrey Levine is chief planning officer at Focus Partners. This podcast is for informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information mentioned may be based on third party information which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. The topic discussed and corresponding arguments are those of the speakers and may not accurately reflect those of focused partners.