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Helping Clients with Senior Housing Options

Why clients procrastinate this discussion and how you can help

A part of our series, 8,000 Days

 


 

Remember being assigned a book report back in school? Did you plan out your progress and diligently make strides toward its completion? Many of us waited until the night before and got it done in a panicked frenzy.

Procrastination also comes into play later in life when it’s time for clients to plan for senior housing options. They don’t want to discuss it. Avoiding these conversations results in them not having a plan for the possibility of a serious illness or incapacity that could trigger the need for assisted living or nursing home care. Unexpected housing decisions can lead to financial and emotional consequences for clients and their families. Help them get ahead of these challenges by initiating discussions about future housing options.

Is providing eldercare advice really worth it?

It’ll take time and effort to become an eldercare expert. But, because of demographic trends, advisors who don’t provide eldercare guidance may miss a business opportunity. By the year 2030, 20% of our population will be 65 and older.1 At that point, clients will be less interested in golf, travel, and beaches and more focused on where they want to live. 

Dr. Joe Coughlin, director of the MIT AgeLab says it’s imperative that business leaders focus on the needs of aging clients. “Because population aging will manifest in such dramatic-yet-predictable ways, when companies make long-term plans for the future, there should be nothing higher on their priorities list than preparing for an older world,” says Coughlin “It’s worth planning for the unexpected, after all, but only after you prepare for the guaranteed.” Even if your current clients in their 50s aren’t concerned about eldercare for themselves, they’re probably dealing with these issues for parents. Building eldercare skills can help differentiate your practice and can help you retain clients who are concerned about their housing options.

Why should advisors discuss clients’ future housing options?

It can be challenging to focus on eldercare planning while you’re helping prepare boomers for retirement. It makes business sense to help boomers evaluate options with their 401(k)s and IRAs. Households transferred $424 billion from employer-sponsored retirement plans to traditional IRAs in 2014.2 However, the oldest boomers, now 71 years old, and the boomers that follow them, will need eldercare advice. That need will continue to rise.

According to the U.S. Department of Health and Human Services, 70% of people turning 65 will need some form of long-term care during their lives.3 That care can range from around-the-clock medical and personal assistance to independent living with a safety net.

There's a good chance we'll need care
 

70percentHousing


Some advisors have added eldercare expertise to their offerings, and the demand from clients has been strong. Their clients were panicking about how they’re going to pay for care.4 Adding eldercare expertise can attract new clients looking for this kind of guidance. It can also help retain existing clients who seek eldercare advice, for themselves or parents, from other advisors.
 

What are the housing options for aging clients?

Housing options available to aging clients range from aging in place to nursing homes with 24/7 care. The cost of options also varies greatly, and online prices for aging communities can be hard to find. Senior housing executives say the reason they don’t include online pricing is because the needs of each resident are different and that it would be inaccurate to post pricing online.5

Most of the prices below (not independent living or Continuing Care Retirement Communities) are national averages from Genworth’s Cost of Care survey. You can see pricing by state on their website.

Housing option 2017 costs per month Additional information
Aging in place
  • Normal costs of living at home, e.g. insurance, taxes, maintenance, etc.
  • Homemaker services *$3,9947
  • Home health aide**$4,0997
  • Caregivers need to be carefully vetted for trustworthiness and capability6
  • The home may also need to be renovated to meet a resident's changing needs for a more accessible bathroom, bedroom, etc.6
Living with family Depends on arrangement with family members
  • Don’t assume that family members will be willing to provide housing and care3
  • There are fewer family caregivers because of smaller families and demographic trends
Living with family $1,500 - $6,0009
  • Residents include seniors who do not require assistance with daily activities or 24/7 skilled nursing, but may benefit from convenient services, senior-friendly surroundings, and increased social opportunities
  • Hospitality and care services available for an additional monthly fee8
Assisted living Assisted living $3,7507
  • For people who may need a higher level of supervision and care than in an assisted living facility. They offer personal care, room and board, supervision, medication, therapies, rehabilitation, and skilled nursing 24/7
Nursing home care Semi-private room $7,1487
Private room $8,1217
  • Long-term facilities that provide partial care options such as meals, transportation, and assistance with bathing and dressing6
Continuing Care Retirement Community $3,000 to $5,000 or more6
  • Single properties that offer several types of living arrangements, from independent living to assisted living to skilled nursing home care
  • Residents can stay in the same community even if their health declines and they need a higher level of care
  • Entry fees start under $100,000 and can range to the hundreds of thousands of dollars6

*Helps complete household tasks that client can’t complete on their own, including cleaning house, cooking meal, or running errands.

**Help those who live in their home instead of residential care facilities. Offer more extensive personal care than family or friends are able to or have the time or resources to provide.


Additional resources that provide senior living community pricing options:

What do these costs cover?

Each senior living community has its own pricing model, but monthly costs typically cover:

  • Taxes
  • Insurance
  • Utilities
  • Repairs
  • Appliance repair or replacement
  • Meal plan
  • Recreation and entertainment
  • Fitness center
  • Library
  • Beauty salon/barbershop
  • Craft workshop
  • Scheduled transportation

To get accurate pricing, clients, and their families, should visit a community, get a full tour, talk with the residents, and then have a conversation about their needs and financial resources.
 

How you can help?

Step one is to realize that clients and their families don’t like talking about eldercare. Forty percent of adult children are hesitant to discuss their parents’ financial situations because they feel it’s none of their business.10 Adult children usually aren’t on the same page as their parents when it comes to eldercare planning. Twenty-four percent of adult children expect to provide financial support to their parents, while 97% of parents feel they’ll be fine on their own.10 The good news for you is that 68% of parents and 60% of adult children would rather discuss finances with a financial advisor than with family members.10

If you bring up the eldercare conversation, let clients know that you realize it’s not an easy topic to discuss. But remind them that it’s better to discuss it sooner rather than later, when their options for insurance or care may be fewer and the costs may be higher.

Eldercare advice is complex and requires expertise. If you lack that expertise, consider referring clients who need eldercare advice to a Certified Financial Planner. Build a recommended partners network, including:

  • Eldercare attorneys
  • Family counselors
  • Senior housing leadership
  • Specialists in long-term care financing
  • Home care experts
  • Geriatric care managers

For specialized eldercare training, the American Institute of Financial Gerontology offers a Registered Financial Gerontologist (RFG) program. RFG’s have specialized training in the practice of wealth span planning for older consumers and their families.

Since senior housing options are expensive, clients will want advice about how to pay for it. The details of how to pay are beyond the scope of this article, but generally speaking, wealthy clients may be able to self-insure and pay for senior housing themselves. Clients with low income may be able to rely on Medicaid. Others may try combinations of self-insurance, long-term care insurance, financial help from families, Medicare, and VA Benefits. It’s important to understand the rules, regulations, and fine print for each of these options.
 

Let’s summarize what we’ve covered:

  1. Why you should discuss clients’ future housing options 
  2. Housing options for aging clients
  3. How you can help

Procrastinating senior housing discussions is natural

Just like putting off that book report, clients will likely avoid discussing senior housing options with each other and their families. People avoid discussing things they don’t like to think about. However, when asked whether avoidance strategies work, the same people say that they don’t. Step up, and initiate these discussions.


Next steps:

  1. Download or order the I Don't Want to Talk About It client white paper below
  2. Research the costs of senior communities in your area. Set up meetings with the leaders of a few communities and begin building relationships.
  3. Identify three clients and ask if they’ve started thinking about senior housing options either for themselves or their parents
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Clients Really Don’t Like Discussing Eldercare with Their Parents  

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Source: How Senior Care Impacts Families Financially, Emotionally and in the Workplace, Care.com, 2016. Most recent data available used.


1Aging Parents With Lots of Stuff, and Children Who Don’t Want It, New York Times, 8/18/17

2The Role of IRAs in US Households’ Saving for Retirement 2016, ICI RESEARCH PERSPECTIVE, 1/17

3How to discuss long-term-care options with clients, Journal of Accountancy, 3/1/17 

4Boomers with aging parents seek advisors' elder-care expertise, CNBC, 10/13/14. Most recent data available used.

5Why Senior Housing Prices Are Impossible to Find, Forbes, 9/19/17

6Understand senior housing options, Journal of Accountancy, 8/1/16. Most recent data available used.

7Compare Long Term Care Costs Across the United States, Genworth, 2017

8Long-Term-Care Insurance: Is it worth it?, The Wall Street Journal, 5/1/15. Most recent data available used.

9What does it cost?, Whereyoulivematters.org, 1/17/16. Most recent data available used.

10The Real Reason Families Avoid Talking About Retirement, AgingCare.com, 2012. Most recent data available used.

 

The information in this presentation is provided for informational purposes only. Hartford Mutual Funds may or may not be invested in the companies referenced herein; however, no endorsement of any product or service is being made. Hartford Funds is not associated with the entities referenced in this presentation.

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