From long hair to long term care

Boomers embrace retirement but avoid planning for LTC

By Phil Zinkewicz

The time has come! We Baby Boomers, because of television and Madison Avenue marketing programs, have watched ourselves age through hula hoops and Howdy Doody, through coonskin caps a la Davy Crocket and Daniel Boone, through Broadway’s “Hair” and “Jesus Christ Superstar,” through television’s “I Dream of Jeanie,” “77 Sunset Strip,” “Maverick,” men walking on the moon, the Met’s winning their first World’s Series, the American Bicentennial, game shows such as “Concentration,” “Jeopardy,” “Wheel of Fortune” and “Let’s Make a Deal.” We’ve listened to our music on records, eight-track tapes, cassettes, CDs and iPods.

Interspersed throughout those events were a president’s assassination, a presidential candidate’s assassination, a president’s resignation, several attempts at assassinating presidents and one president’s impeachment. A few wars took place during those years, but the less said about them the better.

The point is that we Baby Boomers lived through all that and now it’s time that we started thinking seriously about our retirement years. Yes, the time has come.

Of course, we have thought about Social Security, pensions, 401(k)s and other income savings devices; but how many of us have considered, really considered, long term care and how all those savings can be wiped out if we don’t have long term care (LTC) insurance?

Many articles have been written over the years about the subject, but how far have the issues of long term care really sunk in? More important, have Americans really taken the time to discuss the long term care issues with financial advisors or even loved ones?

According to Genworth Financial Companies, a global financial services firm, and Age Wave/Harris Interactive, too many of these issues have not been properly addressed.

Genworth sponsored and Age Wave conducted a survey, “America Talks: Protecting Our Families’ Financial Futures,” which showed that Americans’ greatest fear regarding having a long term illness is becoming a burden to their families, a fear more than five times greater even than dying. Ironically, though, the survey also found that relatively few have even discussed with their families the kind of long term care they would wish to receive, if it were needed.

The findings were presented during a recent Webinar at Genworth’s “Let’s Talk” forum on long term care and retirement, which was led by Age Wave’s CEO Ken Dychtwald, who is a psychologist, gerontologist, best-selling author and leading expert on aging, health and retirement. Genworth has partnered with Age Wave to gain a greater understanding of consumers’ attitudes and perceptions about planning for their own retirement and future health care needs, according to Dychtwald.

Family responsibility/input

“Over half, 55%, said being a burden on their family would be their greatest worry in the event they could no longer care for themselves,” says Dychtwald. “Surprisingly, death was of the least concern, with only 10% of respondents citing this as a worry. Other fears included ending up in a nursing home (24%) and depleting savings (12%).”

Yet the survey revealed that fear of upsetting family members is a major barrier to talking about how they envision the type of care they’d like to receive, according to Dychtwald. “Fully 65% of respondents said it would upset their family members if long term care was discussed,” said Dychtwald. “The other 35% said it would upset themselves.”

Continues Dychtwald: “Discussions that include the entire family are imperative to navigating through the potential financial and emotional risks that an unexpected illness can impose. Yet families still avoid talking to each other about how they would potentially manage the care of a loved one, should the need arise.”

Dychtwald says that the three key areas that need to be discussed to “get the conversation going” are:

• Identify preferred options/costs of care, such as in-home care vs. nursing home care, etc.

• Define roles and responsibilities of family members who might oversee that care.

• Discuss possible sources of funding of care.

“The survey found that 92% of spouses or partners had not discussed all three of these long term care topics with each other; 95% of parents had not discussed them with their adult children; and 96% have not had these talks with their parents,” says Dychtwald.

“For many families, it’s likely that one or more relatives will require long term care at some point in their lives. Whether it be in the home or at a nursing facility, understanding the type of care a loved one would prefer most is an important first step.”

The advisor’s role

Another startling result of the survey was that, while the vast majority of Americans acknowledge the importance of planning for their retirement and long term care, only 9% say their advisor has actually discussed the issue with them. In fact, according to the survey, 91% said their financial professional has not broached the topic of how to fund potential long term care costs at all.

“Discussions about long term care represent a major tipping point for advisors,” says Colleen Goldhammer, senior vice president of sales and distribution for Genworth. “Yet many are missing a tremendous opportunity to talk to their existing clients and strengthen relations by facilitating these family discussions.”

Dychtwald says the survey put people’s retirement plans into perspective. “Fifty-seven percent of those interviewed said that retirement is a chance for a new and exciting chapter in their lives,” he reports. “Many people would like to include some work and even new careers in retirement. Sixty percent plan to work longr because of financial difficulties.

“In many other countries, parents live with their children. Not so in the United States. Our survey showed only 8% said they wanted to move in with their families in retirement years,” Dychtwald continues. “Only 6% wanted any help from their families at all. Only 21% of those surveyed wanted to accumulate wealth in retirement years. Seventy-nine percent said they wanted ‘financial peace of mind.’”

Dychtwald discussed his own parents’ situation as an example of the complexities of retiring with long term illnesses. He said his father is blind and has diabetes. His mother recently had a hip replacement and has other medical problems.

“My father, unbeknownst to his own children, took out a long term care policy 10 years before they began developing these conditions,” Dychtwald explains. “It allows them to live independently at home with day care deliverers coming to their premises.

“Their children are lucky because we don’t have to deplete ourselves of our financial resources to take care of them,” he continues. “And our parents can turn on their own TVs in the living conditions they are familiar with and hear the rustle of the streets outside the windows.”