Preparing for the Inevitable
It may not be comfortable, but planning for aging and death now can prevent financial disaster later.
When it comes to aging, Father Time is undefeated, but that does not mean you should sit idly by and enter your twilight years unprepared.
“We plan for weddings, we plan for graduations, and we plan for vacations,” says Richard Briede, sales manager for Lake Lawn Metairie Funeral Home & Cemeteries. “All these different things that you plan for over time. Why wouldn’t we plan for something that will happen?”
Save Early, Save Often
Financial planning for one’s geriatric years can seem daunting, especially when you consider the high costs of long-term care in assisted living facilities or a nursing home, potential hospice expenses and eventual funeral costs.
According to the Genworth Cost of Care Survey, which provides average rates for a variety of long-term care services, including assisted living and nursing homes, the average annual cost of adult day health care in the New Orleans area is nearly $16,000. Annual costs for assisted living facilities top $45,000, and a private room at a nursing home will run north of $68,000.
Tack on an additional $7,000 to $10,000 in funeral costs, per Parting.com, and aging can be quite an expensive proposition.
Michel Legrand, wealth management advisor for Northwestern Mutual, advises clients to “save early, save often.”
“People who systematically set aside 20 to 25 percent of their gross income on an annual basis, and do that over their working lifetime — it’s hard to fail financially in retirement if you consistently do that,” Legrand explains.
Planning to “save early, save often” is especially important in this day and age when you consider that, according to Northwestern Mutual’s 2016 Planning & Progress Study, “one-third of Americans believe there is some chance that they will outlive their savings, with one in three (34 percent) saying the likelihood is 51 percent or better.”
Furthermore, “only a quarter of Americans (24 percent) say it’s ‘extremely likely’ that Social Security will be there when they retire.”
Legrand believes that while most people begin thinking about retirement when they enter the work force, or at least by their early 30s, they are also unlikely to consider preplanning for aging until their 50s unless they have experienced the aging process with a family member who needed long-term medical care.
“It’s kind of all part of the aging process,” Legrand says. “We’re helping them address the risks of aging, which are primarily people outliving their assets and having an event requiring a need for long-term care, which is extraordinarily expensive and can leave one or both spouses destitute if not properly planned for.”
Don’t Wait, Get Educated
The worst strategy when planning for aging is to have no strategy. Early steps need to be taken to educate one’s self on the many aspects of the aging process, either for yourself or your parents. From financial planning, to selecting potential assisted living or nursing home accommodations, to preparing funeral arrangements, it’s important to begin researching as early as possible.
“Truthfully, I think it’s good for people to get the information before they really need it,” says Tracy Gonzales, director of business development at Chateau de Notre Dame.
Gonzales encourages potential residents to ask a lot of questions to fully grasp the differences between independent living and assisted living or nursing-home care.
“Financially, people don’t realize that Medicare does not pay for you to live in a nursing home,” Gonzales explains. “You either have to be private pay, you have to have a long-term care policy that’s going to pay for it or you have to be Medicaid or Medicaid pending.”
It’s never too early to consider signing elderly parents up for the waiting list of your desired assisted living facility, and Gonzales recommends people in their 40s and 50s consume as many presentations on the topic as possible.
“You’re going to have to be planning this for your parents,” Gonzales says. “It’s not necessarily that the patient needs to go listen to it, it’s the siblings, and it’s the children that need to hear it.”
In New Orleans, many people have family members who have already purchased cemetery property that can accommodate multiple generations, but choosing a cemetery is only part of the funeral equation.
“A lot of people get lulled into the thinking ‘I already have something, I don’t need to preplan,’” Briede says. “Well, they may not need to talk about the cemetery end of things, but the services or the aspect of what they want to do when the death occurs, that still needs to be done.”
Briede has watched the number of preplanning clients grow tremendously during his 38 years in the funeral business, drawing nearly even with the non-planners.
Currently the median age of funeral preplanning at Lake Lawn is 78, but Briede recommends people begin planning during their 50s or 60s.
“In the 50s and 60s, people are talking about it a whole lot more because we’re going to more and more funerals,” he says.
Emotional and Physical Toll
Facing one’s own mortality is a tough realization to grasp, and the aging process can be an emotional time, not only for one’s self, but for loved ones.
Fear, anger, frustration and confusion can all come together to create a combustible force of emotions during these stressful times, and that is why preplanning is vital.
“If they have a current experience of providing care for an aging family member and that’s required a considerable amount of time or even some of their own resources, that itself can be an emotional impact, but it’s a trigger that causes people to think about their own planning,” Legrand explains.
Even the physical toll of aging can have an emotional impact on a family.
Dr. Daniel Bode, audiologist at Associate Hearing, says hearing loss can lead to anger, frustration and fighting between family members.
“We know that hearing loss negatively impacts a spouse to the point they can have emotional anxiety and even heart issues,” Bode says.
According to Bode, hearing loss is often a precursor to other ailments in aging.
“Hearing loss does not stand alone,” Bode says. “The first signs of difficulty are with the hearing, so if you’re having hearing difficulties there may be other medical concerns that are concurrent with something you may have inherited by genetics or been exposed to with noises.”
As hearing deteriorates to the point of affecting a patient’s balance, Bode says he can be forced to wade into the uncomfortable waters of discussing a patient’s limitations of living on their own. To help spark conversations about assisted living between parents and children, Bode walks the patient through a few exercises.
“I’ll have them stand up, close their eyes and just put their arms out, and you can see their propensity to the right or left,” he explains. “You can see the imbalance being created. Usually it’s an indication of the hearing loss being stronger on one side versus another.”
The exercise results are a starting point, as patients and their families begin to truthfully assess what actions to take moving forward.
“I give them concrete evidence as to what the future might be,” Bode says.
Give a Gift
Lake Lawn Metairie lists many compelling reason to preplan your funeral arrangements, including eliminating the guesswork for your family, avoiding emotional overspending and personalizing your service.
For Richard Briede, the decision to preplan his funeral was based in love.
“For myself, it was giving my children a gift so they don’t have to do that,” Briede says.
Michel Legrand helped his parents setup a plan for their long-term care.
“[My father] realized this was a smart thing to do, and if they hadn’t done that, the burden of providing care for one of both of them would have fallen on their children. At the end of the day, he said, ‘I really don’t want to have that happen.’”
Peace of mind can be the most loving and thoughtful gift a person can leave behind for a child or spouse, and putting a plan in place is the first step toward securing that peace for your family.
“It really helps the children if you do have a plan, and then to honor what your parents’ plan is,” Gonzales says. “It puts a lot of burden on the children to have to say, ‘I hope that’s what my dad would’ve wanted.’”
Variables to consider while planning for aging:
• Will you be caring for children, grandchildren or even your own aging parents?
• What is your family longevity?
• Are you prepared financially for risks, such as market turmoil or a healthcare event that requires hospitalization or long-term care?
• What impact will inflation have on your savings during retirement?