They say we get wiser as we get older. I agree with that as our “experience wealth” grows with everything we learn. But let’s face it: Many new uncertainties and challenges can crop up as people get deeper into their golden years. Changes in physical health and issues with memory can mean you—or your elderly parents—might require new types of never-before-needed assistance. And then we can get hit with anything, like our recent newsletter featured our countries (the world’s) circumstances today, a real punch in the mouth.
With that in mind, here’s a look at two key issues that may impact your life or the lives of your elderly parents—aging in place and safeguarding all types of wealth from costly cognitive mistakes.
There’s no place like home
More than 75 percent of Americans age 50 and older want to stay in their current homes and communities as they age instead of moving to a nursing home or elsewhere, according to AARP.
But wishing doesn’t make it so. To potentially make that happen for you and your spouse or for your parents (or all of the above), you need to plan with the same level of seriousness that you plan for your financial future. We know you as our clients have these plans in place. We are happy to help you with a second opinion on your parent’s situation, or anyone you are close to that may need a second set of eyes from a fiduciary.
According to Kim Evanoski, CEO of care management company Care Manage for All, some of the key issues surrounding the idea of aging in place include the following:
- Needs. Identify the big needs and pain points to address. If you’re helping parents, talk with their doctors about specific ways health problems could reduce their mobility or their ability to take care of themselves. If you’re planning for yourself, think about any illnesses that you or your spouse have or that run in your families—and how those illnesses tend to impact the ability to do certain things.
- Changes and renovations to the home. Often, aging in place successfully requires maximizing the usefulness of the current house and making it safe and comfortable at any age.
- Swap out existing hardware. Replace knobs with lever-handled doorknobs, add sturdier handrails along stairs and add rollout shelves in the kitchen.
- Widen doorways. A door opening of at least 32 inches allows better access for people using walkers or wheelchairs.
- Focus on the first floor. For example, avoid stairs by having the main bedroom on the first floor.
- Keeping social connections intact and strong. Depression and other health issues associated with loneliness and isolation can be serious problems. Our country is facing that now as it balances fighting the spread of Covid19 with opening up America for the public good on so many fronts. Ask yourself how aging in place might impact social connections—yours or, if you’re helping your parents age in place, theirs. You might find, for example, that it makes sense to hire someone to drive your octogenarian parents to movies or dinners so they stay connected with themselves and others. We have used uber to help those unable to drive be more mobile with great success.
SAFEGUARDING FINANCIAL WELL-BEING
As we age, we may find that the biggest risk to our financial health isn’t a market crash—it’s our own behavior. So says Chris Heye, co-founder of Whealthcare Planning.
That’s because our cognitive abilities tend to decline over time, and the risk of dementia rises as we get older. According to the World Health Organization, the number of people living with dementia worldwide is expected to nearly triple by 2050.* Regardless f the political side you may have regarding the WHO, this picture is concerning.
But you don’t need a diagnosed illness to make harmful financial decisions. Various health issues can diminish people’s ability to make prudent decisions, leading to outcomes such as the following:
- Investing impulsively. It is very volatile out in the market today. Aging can reduce our ability to accurately assess risk and control our impulses. That, in turn, can lead people to buy investments that are far too volatile for their risk tolerance based on their needs and their age. There are some real opportunities to both win and lose in today’s environment (this is typical but the current volatility and uncertainty amplify this challenge or opportunity). A reminder, we are here for you, with a second opinion or stress test, working as a fiduciary, for any close relationships you have, as both complimentary and comprehensive.
- Falling for financial scams and exploitation. The vast majority of financial services providers with attractive advertising are not working as a fiduciary, in other words, your best interest and transparency are not a part of their service equation. Chances are good your extended family, former or current coworkers friends, neighbors, fellow congregants, or other important relationships are being approached by those whose expertise may not be applicable to both preserving and growing wealth, and your best interest is not their sole focus, as they are in the business of representing suitable financial products for sale by the company they represent. Suitable is not a “best interest” level. You and those you are close to deserve “best interest treatment.”
- Even worse, financial scams, some disguised as legal options, are unfortunately numerous. These scams or “bad products” are taking advantage of the reasonable concern heightened in the world today. These “heightened concerns” can become fear when increased in intensity from the irresponsible displays of some (most?) of the media. Behavioral factors such as fear, and loneliness can make people—even highly intelligent and financially savvy people—susceptible to financial scams. Such scams may involve investment “opportunities” that don’t exist or thieves who feign romantic interest in widowed or divorced seniors. We appreciate our role and feel fortunate to have the responsibility to make sure those who work with us, with or without their partner still here, have a qualified ear and voice in their lives to listen as an expert who can help with even the things more important than the financial ideas or assets are in review. Separating a scam from an opportunity
So how can you help an aging parent or parents avoid these scenarios? And just as important, what can you do to prepare yourself so you avoid making major money mistakes as you get older?
- Plan now. If you’re in your 40s, 50s or 60s, make a plan for how and when you want to transfer decision-making powers to heirs or others. Make the plan dependent on your level of cognitive health—using tests that assess your decision-making ability. If you’re concerned about your elderly parents, help them take such tests.
- Get documents in order. Formalize your wishes and plans via a will, a living will, power of attorney and other legal documents. You can also create documents that spell out certain guidelines—such as family agreements that explain how and to whom you will lend money. We have discussed the value of naming stories of events with the learning events in your life to pass on for generations to come. List the names of the stories with 1-2 line description on the lesson for the benefit of all you love in the future when you are no longer here. This pandemic has given us many opportunities to learn that will be valuable forever. Don’t lose them, name the stories! And pass them along to those you love.
- Communicate with financial advisor(s). Get to know your parents’ financial advisor(s) so you can set the stage for dealing with potentially difficult conversations and challenging situations. You may end up coordinating efforts down the road, so build relationships with these key professionals now. Remember, we are here for a second opinion. If we feel the relationship your loved one is in and their plan makes sense we will tell you, speaking as a fiduciary that there is no need for a change. On the other hand, each month we typically find “surprises” that we end of fixing for the friends and relatives of our clients and a change is needed.
- Watch for warning signs. If a parent or spouse is acting impulsively with money or in other ways, that’s a possible sign of deteriorating health. Communication, using professionals, family therapists etc are resources that should not be ignored.
As noted above, loneliness can also put older adults at risk. If an older family member reports having conversations with “new” people whom nobody knows, investigate the nature of these discussions. It could indicate that exploiters are making inroads into the family member’s life. It could also mean a generous kind person is there on a positive note. Don’t jump to the negative, or positive, without research.
Take action now
It’s much better to plan and take helpful steps early—before there are issues or emergencies that force you to react. That’s true whether you’re helping your parents or thinking about your own lifestyle during your golden years.
Best bet: Discuss these and similar concerns with the key trusted professionals in your life.
*World Health Organization, 10 Facts on Dementia, September 2019.
*Joanne Binette and Kerri Vasold, 2018 Home and Community Preferences: A National Survey of Adults Age 8-Plus, AARP Research, August 2018.
ACKNOWLEDGMENT:This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2020 by AES Nation, LLC. This article was edited by Goldbloom Wealth Management
This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Securities offered through Goldbloom Wealth Management, LLC . Steve Goldbloom is a IAR of Goldbloom Wealth Management, LLC. Steve Goldblooom and Goldbloom Wealth Management, LLC. are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.
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