In retirement planning discussions, we see this statement financial professionals often publish for their clients:
“The average lifetime out of pocket costs for healthcare for a 65 year old couple retiring today is $285,000.”
Why should you never say this? It’s misleading at best and at worst, it’s false. From my own research as to where the number came from, I found it in government sources calculating Medicare deductibles and supplemental insurance payments, and co-pays Medicare does not cover. Generally, the out of pocket calculation refers to non-covered “medical” costs. But when that term gets diluted to mean “healthcare” it is far too broad and it simply ignores the reality that long term care is indeed healthcare. Medicare does not cover that at all, except for limited stays in skilled nursing homes following hospitalizations. It is noteworthy that when the Federal government uses data to calculate what out of pocket medical costs will be, the subject of long term care is entirely omitted.
The “average” lifetime cost of long-term care for two people in this country is far greater than $285,000. According to research by long term care insurance provider, Genworth, seven in ten people will need long term care at some point in their lives.
The comprehensive Genworth cost of care study, done annually, was published for 2020. Consider that at some point, with longevity being as it is, an older person with multiple medical conditions may need 24/7 care. Almost everyone will tell the advisor that he or she wants to stay at home and age in place. What will that cost at home in any of the most expensive states? In California, for example, the median cost of in-home care with a non-licensed caregiver full time, 27/7 is $252,000 per year! This is not medical care, in the sense that no skilled nursing is part of it, no doctor’s prescription is involved, and the agencies that supply unlicensed home care workers can charge whatever the market will bear.
A truthful financial professional will never mislead aging clients, or those planning for retirement by telling them that all they have to worry about for their future out of pocket healthcare costs is $285,000. Prudent financial advisors will themselves look annually at the Genworth study and help clients calculate the costs of long-term care, which every person should know about.
Costs of care, whether at home, in an adult day health center, in assisted living or in a skilled nursing facility vary widely from state to state. Looking at national median costs can be of little benefit to anyone doing retirement planning. Instead, using data from the Genworth study, one can look state by state for the real, most applicable numbers derived from where your client lives or plans to retire.
From my perspective, financial advisors are not educated to fully understand the difference between government provided statistics about out of pocket, non-Medicare covered medical costs and what we mean by long term care. They are quite different terms. It is distressing to me, with substantial experience in nursing, to see the fallacy of statements published by financial professionals about what retirement planning should include. Clients will be shocked to find that their own experience with having to pay for long term care out of pocket is not what their own advisor told them years before.
If you are in the retirement planning business and you want to serve your clients well, bear in mind that the data telling us that seven in ten people will need long term care at some point is likely true. Don’t fool yourself into thinking that retirement planning is just fine if a couple puts away enough to generate $285,000 for out of pocket medical costs. They also need to plan for how to pay for long term care, which they are statistically likely to need. That cost can destroy the most carefully laid plans for retirement income.
As a real-life example, take a client of ours, “George” at AgingParents.com, where we offer advice and guidance to families with aging loved ones. The advice encompasses legal, financial and healthcare issues as well as diminished capacity issues. George is 98 years of age and still sharp, though with some memory loss problems. He was wealthy at one point, after two successful careers. He owns his own home and wants to stay there for the rest of his days. His physical health is fragile and he now needs 24/7 help. He hired a good agency to provide in-home care. He spends in excess of $300,000 a year for caregiving alone, not counting the cost of everything else involved in home ownership, food, recreation, and out of pocket medical costs. Those medical costs involve dental surgery and equipment he needs at home. He has less than $400,000 left in savings. What if he lives another two to four years?
As you can see from this example, George is not a rare case. Many people do live into their 90s and beyond. Many start out with financial security, only to see assets rapidly depleted as the cost of care escalates to heights no one wanted to think about in retirement planning.
The Takeway
If you pride yourself in doing great retirement planning with clients, get real. Sit down with the data and find out what your clients might expect to need if they live long and require help at home or elsewhere. Tell the truth about it. If they need long-term care insurance to feel secure, talk about it. If they have sufficient assets to make it to 100 or so with full time care, they don’t need to get long term care insurance but they will need to have access to sufficient cash to cover the actual, not fantasy, costs. Above all, be clear in your own mind about what “out of pocket medical costs” means as compared with long term care costs. You are the key to these honest calculations. You can be the hero of the retirement planning story when you present an honest picture to every client you have.
Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices and Hidden Truths About Retirement and Long Term Care. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times and, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 36 years.
Advisors talk to clients all the time about the big topic of retirement. The industry inundates the media with advertising among competitors about who can do retirement planning best. You help clients plan for how to reach their goals. You do your research and calculations. You offer sage advice after years of experience. And then there’s your OWN plan: when is it time to schedule your own exit from the burdens of your work?
We often hear “age is only a number” or “age is just a state of mind”. That’s not really true. Age is a process that takes its toll and ignoring it can be costly. We work, we have our self-image of productivity and success. We pass 50, then 60 still going strong. But one day, you forget an important phone number you should know. You quietly ignore it. Until it happens again. You forget names and that’s not really such a big deal, as lots of your age-mate friends laugh about the same thing. But at the back of your mind there is that tiny, creeping doubt: am I starting to “lose it”?? Fear has emerged in the shadows of your consciousness. “How long can I keep going?”
The literature of the financial services industry is replete with advice about advisors’ succession planning. Sounds good, but it never tells you exactly when to move on, to merge your business with one managed by younger folks, or sell the book of business to someone you trust.
Here at AgingInvestor.com, we offer a deep dive into information about aging clients and how to spot signs of trouble. We give you our professional guidance as aging experts on how to understand when your client is demonstrating dangerous signs of diminished capacity. We give you concrete suggestions about what you need to do. We spend a little time on the subject of the impaired advisor too, and how firms can deal with that. But we have not asked you to look within and formulate a plan for your own exit strategy when you, yourself see any warning signs that age is affecting you in your work.
It’s time to do just that. We know that many advisors are still doing fine at 60, 65, 70 and up. However, age statistics don’t lie and loss of sharpness can happen to anyone. Advisors don’t age differently from anyone else in the world. A few firms do have a mandatory retirement age but most don’t. Independent advisors are independent for a good reason. You didn’t want to march to the beat of an institutional drum. That independence has likely led to greater job satisfaction and perhaps even greater financial success. But it leaves you vulnerable when you are on your own, getting on in years and not clear about whether to merge with a firm, sell, or otherwise set a date for realizing your own exit strategy.
Here are five things to ask yourself in considering the question: when is it the right time for me to exit this business?
Am I noticing any changes in my memory such as forgetting appointments or important phone numbers I ought to remember easily?
Am I having any difficulty concentrating on complex financial information that is part of the nuts and bolts of my work?
Has anyone in my life encouraged me to retire, “take it easy” or otherwise modify my work life?
Have I failed to create an exit plan for myself the way I help my clients set their retirement dates?
Am I afraid that if I retire, merge my business or sell my book that I will lose a sense of my own self-worth or identity?
If the answer to the first two questions is “yes”, that’s a signal to attend to rather than ignore. It may be time to quit while you’re ahead. If you have not thought these things through, that’s what needs to happen. As for the last questions, 4 and 5, consider this. Anyone who gives up a long-held identity based on what you do for a living has to face the same challenges. And many people do transition successfully to a different lifestyle, to finding purpose in other pursuits or in removing a major source of stress that can come from your work. The life cycle does not go on forever, despite society’s denial of aging. Kicking the bucket at your desk is not a pretty picture. On the contrary, you can set your glide path out in a graceful way.
The Takeaways:
If you are 65 or above, you really do need an exit strategy. It could take some years to execute it but have a plan. If you do not have one, create one. If you have any small, back-of-your-mind doubt about being as sharp as you once were in a younger day, pay attention to that little doubt. It just might be your internal nudge to make your exit happen. Consider a strategy that allows this at a time when you can make the most of the benefits involved while you’re still at the top of your game. What you have created has value. Take advantage of negotiating with that value at its high point.
Every advisor wants clients to think that he or she is unique, different, better than the competition. Maybe you are. But if your retirement planning with them stops at calculating their planned retirement income and preserving their assets, you’re not extraordinary. It takes more than that to be outstanding.
Standing out among the others means that you are looking at the client’s entire life and relationship to their family members. Acquiring the courage and skill to do that is how you distinguish yourself from the next advisor down the street or anywhere. So how do you do that? Aren’t you just supposed to do a good job managing the money?
Advising about and managing the money is your essential bedrock, and then there is service above and beyond. That’s the unique play, going beyond average. It’s not so hard to do, but it may be outside your usual comfort zone. You assess. You discuss difficult subjects clients may not want to talk about. You take the time. You communicate more often than the next guy or gal. You offer tools. You become a sort of coach, encouraging a retiree or soon-to-be-retired client to do things that will make life easier for everyone around them. Your guidance can help not only your client, but every person whose life is touched by what your client does and fails to do. Most will likely think how wonderfully unusual you are for doing this. The average advisor won’t bother with any of it but not being ordinary, you can shine.
Let’s start with one tool you can use, created at AgingInvestor.com (free download here). In this article, we address the first item on our Ten Step Checklist For Smart Retirees. The first step is:
“Decide whom you want to communicate with about your future. Set a date and sit down together.”
This sounds simple but it’s not. Clients’ families frequently have poor communication about aging, the potential for needing help, and finances. The elders may want secrecy. Everyone may be afraid to talk about end of life. Although wealthier folks usually do better with estate planning than the less wealthy, not everyone takes the time to update their legal documents and your client’s loved ones need to know this. If you, the advisor encourage a family meeting (or friends meeting if there is no family) specifically about basic topics in your client’s future, that can get the ball rolling on communication about other essential matters related to getting older. The communication must address the real risk of becoming impaired with aging. The checklist is a guide for your client, a place to start. If a client does these steps, it will save everyone enormous and avoidable aggravation later.
Our checklist has ten steps in it. We’ll go through all the ten steps and why they are crucial in subsequent posts. Get your copy today and consider having a conversation with every client age 55 and older in your book about the checklist. You hand it out to them and discuss how to use it. You can bring it up at portfolio review, on the client’s birthday or at the time of retirement. If you want to set yourself apart, talking about things besides the client’s income in retirement will indeed set you apart.
At its Senior Protection Conference on November 12, 2019, FINRA took a cell phone poll of broker-dealers. They wanted to find out how many were worried about aging registered representatives at their firms. The result: 65% were worried, according to the report published in Financial Advisor. Yes, aging B-Ds are a problem.
Here at AgingInvestor.com, we’ve been sounding the alarm about this problem since 2016, when we published our book, Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices. “The Elephant in the Room” chapter dives into how impairment in advisors affects the industry and how that most definitely will affect their work with clients. A B-D or advisor whose memory and judgment are impaired, even in the early stages, can expose the firm to liability for mistakes these folks make. Cognitive decline should not be taken lightly.
The speakers at the conference offered attendees very little concrete advice on how to address the problem of an impaired advisor. What could one expect of them? They have no training nor skill set in identifying diminished capacity themselves. Without expertise, their discussions lack action plans.
As aging experts ourselves (RN, Elder law attorney and geriatric psychologist) and a resource to the industry, we question the suggestion that one should wait for “performance issues” to surface before any firm does anything about an impaired professional in its midst. If there is a “performance issue” visible to management, it is likely that it existed for some time and harm to clients already could have occurred. The notion is reactive, not proactive. Isn’t that contrary to the essential philosophy of financial planning itself to look ahead, strategize and don’t wait for a crisis??
Waiting for a manager to call a special team assigned to address the problem is not the best approach, as we see it. For one thing, most firms don’t have a special team that would serve the purpose of knowing what to do with an impaired advisor. Yes, every firm would be well protected if such a team were formed and that is something we always recommend. However, failing to screen advisors with any in-house tools when impairment is suspected is to ignore the lurking possibility of harm to clients. What do we mean by an in-house tool? Start with a checklist.
On our website is a free downloadable Financial Advisor’s Checklist: 10 Red Flags of Diminished Capacity to help you spot the warning signs in clients. There is no reason any firm could not use relevant parts of the same tool to spot signs of diminished capacity in its own employees. It is not across-the-board applicable to the professional as compared with a client showing red flags but some points do apply to anyone. For example, memory loss, failure to appreciate the consequences of decisions, confusion, loss of ability to process basic concepts are all on the checklist and are universal warning signs.
What Can You Do With An Advisor You Think Is Impaired?
Proactive steps are essential. Here are our recommendations:
First, record your observations of changes in the advisor’s behavior. For example, forgetting appointments, failure to meet on schedule with clients, seeing too many blank stares in your interactions with him or her, becoming withdrawn from interactions can all be signs of trouble a manager must address. They could be associated with cognitive impairment or with other health conditions. Managers need to ask the advisor about what they and other colleagues see that looks like a possible red flag.
Ask about general health issues, which can directly impact how an advisor does the job of handling clients. Is it nosy? Yes. Is client financial safety at stake if you don’t ask? Yes. Take the risk of opening the conversation. That is smart. Waiting for a disaster is not.
Establish an in-house policy for what should be recorded by colleagues and reported to managers about possible signs of cognitive decline and the direction you want to take after signs are identified. The policy should be in writing and distributed.
Have a plan to closely watch the apparently impaired advisor.
Asking the advisor to work with someone to supervise transactions is one option. Reviewing how the advisor is managing his or her work at short intervals is another option. And with obviously impaired folks who do not themselves recognize their own cognitive changes (not an uncommon thing), have a suspension or graceful exit means to stop the impaired person from putting clients at risk. This falls under what those conference speakers vaguely referred to as “other arrangements”. Be specific.
This is uncomfortable territory for managers, compliance officers and for colleagues of older advisors in firms. However, the FINRA poll is telling. If this problem were not rising in our midst, 65% of those polled would not be worried. If you are concerned where you work, get your copy of Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices, now or get a live or online presentation from us at AgingInvestor.com. Don’t put your firm and your clients at unnecessary risk.
By Carolyn Rosenblatt, RN, Elder law attorney, Consultant, AgingInvestor.com
An Important Question For Your Clients Contemplating Retirement
Longevity is increasing, as millions of Americans are living to 90 years and above, the U.S. Census Bureau reports. Will any of these long-lived folks be the parents of your current clients? Some clients reaching retirement age themselves will be dealing with the challenges of their aging family members, even as they plan their own retirement years.
One critical question perhaps not built into your calculations for retirement income needs should be whether your clients can reasonably expect to have to support their aging parents. As reported by NPR citing the Census Bureau report, nearly 20 percent of 90- to 94-year-olds live in nursing homes. Among those 95-99, about 31 percent are in nursing homes. And in the 100+ population, 38.2 percent live in nursing homes. Who pays for that care?
Most financial advisors have a basic understanding that Medicare benefits are very limited when it comes to nursing home care. Post hospitalization, the maximum benefit is 100 days and most people do not receive even that, due to qualification requirements. For those who have to live in nursing homes long term, rather than for shorter stays involving rehabilitation such as physical therapy, the costs are paid out of pocket. The exception is for the lowest income elders. For them, Medicaid pays the cost of long term nursing home care. For everyone else, a long stay in a nursing home can wipe out an older person’s assets. The financial burden then falls on family who may have the means to prevent the impoverishment of their loved one.
Some adult children will not allow Mom or Dad to live in a nursing home long term. Maybe it was a promise they made to the aging parent. Essentially, it is no one’s first choice of where to go when care is needed. If a family has some assets but does not want to wipe out their own retirement income by paying for nursing home care or even full-time home care, the most cost effective solution is to take in the aging parent.
There is a cost involved in this choice as well, and it extends to many factors beyond money. Every family relationship in the household is impacted. Some adult children are not patient, not willing and not good at caring for an impaired aging parent in declining health. For others it is seen as an honor and a final chance to give back to the parent in gratitude for what the parent did for them over a long lifetime. Individuals vary in their perspectives, ability and willingness to take in an aging loved one.
Some families take in an aging parent and pay for part-time help, providing a significant part of the caregiving themselves. Others pay for assisted living for an aging parent, but that is not suitable for those who need care around the clock. Others allow a parent to spend down their assets until they can qualify for state paid nursing home care. The parent is then placed there somewhat as a last resort.
No matter what choice a client will make about an aging parent, it is important that the financial professional in their lives helps them see the big picture and plan according to anticipated needs for both the client and the elders for whom they feel responsible.
The Takeaways
Longevity is creating an issue for families who are facing years of decline in aging parents who may not have the means to pay for care on their own.
Responsible financial advisors must raise the question with every retiring client: is there someone in your life that you will likely have to support financially during your retirement?
Advisors and families alike must consider and plan for how any essential financial support should be handled by adult children of aging parents. Take in the parent? Supplement the parent’s income by paying for home care or assisted living?
When the means are not available to offer financial support, and the physical needs for care are extensive, it sometimes becomes necessary to allow the aging parent to become impoverished and to qualify for Medicaid. Medicaid does pay for long term nursing home care.
For those with sufficient investment income expected, financial support for aging parents can be part of an overall retirement planning strategy. It is up to the financial professional to help with this process.
If you the financial professional need a clear explanation of the actual costs of long term care, whether at home, in adult day centers, assisted living or skilled nursing, get the facts so you can plan with clients. It’s all laid out for you in Hidden Truths About Retirement & Long Term Care, available now. Click here to get your print, digital, or audio copy.
About Carolyn Rosenblatt and Dr. Mikol Davis
Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 34 years.
The Senior Safe Act allows you to hold transactions when you suspect financial abuse of a client. The Act is designed, at least in theory, to allow time for the trusted contacts you have on file to take appropriate action. Many of those victimized by predators or manipulated by unscrupulous family have dementia and have lost their judgment about what makes sense financially. The Act urges you to get trusted contacts and provides that you are not breaking privacy rules to contact them in the reasonable belief that your client is being financially abused. The length of time you can hold a requested transaction can be as long as a month. This is where the Senior Safe Act has missed the mark.
Let’s look at the reality of impaired elders who are in charge of their wealth on the family trust. The trust is in order, and if the elder recognizes that he or she is experiencing decline in mental ability, that trustee may choose to resign. Simple. But that is not what happens in too many cases. For many persons who have cognitive decline and dementia, the elder does not recognize that he is impaired at all. “I feel fine!” he tells his worried family. When asked to resign as trustee, having total control over (theoretically) millions of dollars in a trust, the elder flatly and stubbornly refuses. Meanwhile, financial abuse by predatory people can continue unabated.
When an older person experiences cognitive decline, it typically has a very slow onset. Short-term memory loss does not raise enough red flags for those closest to the elder to take any action. “She’s just getting old” they say dismissively. But memory loss is often the first and earliest warning sign of Alzheimer’s disease, the most common form of dementia. The odds of having Alzheimer’s disease by age 85 are at least one in three. Think about your own older clients. Some live well beyond age 85. The risk of dementia rises with age. Short-term memory loss interfering with daily life is not a normal part of aging. Financial abuse and cognitive impairment often go together.
When financial abuse reaches a visible level, the advisor may do what the law allows and call the trusted contact person, usually an adult child. The advisor hopes that the call will somehow trigger something and the abuse will be stopped. But here is a reality check: The family can’t accomplish anything needed in two weeks or even a month if you hold transactions then. Here is a real case example of just such a situation, showing how long it really did take.
In our work with a family at AgingParents.com we saw rampant financial abuse of an elder by a family member. The elder had dementia but had not been formally diagnosed by his doctor. Over 70% of his income was going to the predator. He was asked to resign as trustee by his two adult children, who were reasonably worried that he was going to give away all his cash and further encumber his home. The dad, whom we’ll call Gene, had been developing dementia for at least two years. He felt obligated to the predator and was totally powerless in resisting her demands for money. He just kept writing checks, draining his own resources. It was clearly a case of financial manipulation.
We were involved in working to persuade Gene to allow what his family trust provided: to have his daughter, Jennie, become the successor trustee. He agreed, then reneged. He accepted the logic and then refused to accept it. The kids had no choice but to use the law to take over control. Their father was too stubborn to resign as trustee when asked, even with the entire family presenting a united front, asking and respectfully begging.
The trust, like many such documents provided that Gene could be removed as trustee by his appointed successor, his daughter, after two physicians had declared him to be incapacitated for handling his own finances. A court decision was not required. However, getting him to two doctors willing to assess him and put their observations in writing was a challenge that took months to accomplish. The total time spent getting the change of trustees accomplished according to the terms of Gene’s trust was eight months.
His children were the trusted contacts in the advisor’s file. They knew about the abuse and were in agreement with the advisor that Gene had to stop being the trustee. The adult children had to hire consultants (AgingParents.com), have meetings, hire an attorney, and try various methods to get the job done. Their time energy and thousands of dollars were expended to prevent an even worse outcome, which was being left to support their aging father if he were to totally deplete his own funds.
The takeaways:
Though well intended, we do not expect that the Senior Safe Act will do much to stop financial abuse because of the short time allowed for a financial professional to hold transactions. In Gene’s case, the predator would have been happy to wait a mere two weeks or a month before resuming the financial manipulation of Gene.
Know that any older impaired client may not understand that he or she is cognitively impaired and will ignore pleas to resign as trustee with total control over any family trust.
If you see that an older client is showing signs of cognitive decline, do not wait until it gets worse. Reach out at the time of your first suspicions of trouble. The family or other trusted persons may well have a better opportunity to persuade an elder to transfer power over finances to the appointed successor before complete loss of capacity. Expect this to take time.
In the case described above as a result of ongoing financial abuse, nearly all of Gene’s cash was depleted during the eight months of effort on the part of his adult children to have him removed. The advisor did the right thing but too much of Gene’s cash was depleted in the period when the abuser could keep manipulating him for those months of effort by family to have him removed as trustee.
If you are seeing abuse and feel lost about how to stop it, contact us at AgingInvestor.com for a confidential consultation with our nurse-lawyer, geriatric psychologist team so you can do everything possible to protect your vulnerable client.
The U.S. Census Bureau projects that by 2060, nearly twenty-five percent of Americans will be age 65 and above. At the same point, the number of people age 85 and older will triple. What will they all be doing in those long retirement years? If they live into their 90s, will they run out of money?
Many who have not saved enough ultimately find new jobs. Working in retirement is something to discuss with clients who are aging, have set a retirement date and have no answers to what happens if they outlive their savings. The advisor is not a miracle worker who can stretch their dollars beyond what is reasonable with prudent investments.
Maybe some clients will consider seeking a “not too big” job that is relatively easy, compared with what they did in a prior career. For the advisor with a client whose invested assets have a predictable length that does not match life expectancy, it is wise to help them plan how to keep their dignity as they live longer than they thought possible. That is through producing some earned income, even if modest.
If an older client is determined to retire from a stressful job, that’s fine. No one needs high pressure forever. But every job is not stress filled and some are more satisfying than others. The stereotypical image of a retired elder serving fast food is not for everyone, especially for educated clients who may have more interesting choices. For some retirees, long stretches without structure lead to isolation, boredom and even to depression. The routine of some kind of work relieves that risk and can bring enjoyment a person never had in the prior career.
Some may need the double benefit of bringing in money while finding ways to be with others. Elders certainly don’t need to go from one job to another at the point of retirement, but the holistic retirement plan for a person with modest investments should include some form of earning money through work. Your client may expect that family is willing and able to provide financial support if the client runs out of money. This prospect does not appeal to many younger families who are still supporting their own children and saving for their own retirement. They fear the idea of having to support aging parents and rightly so.
Imagine a client finding something to do in retirement that pays and something the client likes. Here’s an example.
My 30-something daughter is a regular Uber user who likes to converse with her drivers in San Francisco. She reports that three of her drivers in past two weeks were over age 65. One was age 80. He told her that he had retired from a union job at age 65. His wife had passed away and he got withdrawn and bored, having no sense of purpose. He worked part-time as a warehouse floor worker and cashier. He liked the walking and being around people. He worked another few days a week driving which he enjoyed because it kept him sharp, using the app, navigating around the city, keeping track of the best ways to get places, and most importantly, he liked chatting with his passengers.
Longevity creates a pool of older workers available either part-time or full-time, not necessarily expecting a benefits package and having no lofty career aspirations. Employers in a broad variety of service fields can benefit, as can the potential workers. We have met elders at AgingParents.com who have gotten a teaching credential after retiring from a high pressure career and are happily teaching part-time. We have found others who are mentoring in businesses, working in nonprofits, doing childcare, working in retail and otherwise using their natural talents while earning a paycheck. These were all part-time positions and all were glad to be doing them.
Discussing the possibility of working with your older clients should include when in retirement the client should consider doing it. Physical and mental loss of ability can preclude work of any kind, even volunteering. They can’t necessarily count on being able to work in the later years of retirement when they may run low on cash. Someone might be fine at 70 and impaired at 85. The time for planning an appealing part time job is in the earlier stages of retirement when the client is feeling good and is not impaired by health problems.
If your client has a modest portfolio that with a conservative drawdown would only last 20 years and life expectancy is 30 years, you need to encourage working. Take the axiom “know your client” to a realistic individual plan for living long with sufficient means.
Clients Without Family: Financial Planning With “Elder Orphans”
Every financial advisor will eventually come across an aging client who is essentially alone in the world. The elder may be single, widowed, or otherwise without a partner. Some are members of the LGBTQ community and never had children. Others were childless, or have lost children and significant others in their long lifetimes. The end result is that the usual support systems that exist for others are not available to these clients when they may need support the most.
Some refer to these elders who are alone with no family as “elder orphans”.
Heidi is an example. She has a financial advisor who has worked with her over decades. He referred her for advice, which she wanted and I visited her at home. She is 90 and lives alone in her own house, which she owns outright. She has a modest portfolio and is comfortable. She was widowed 20 years ago and she has no children, nor any relatives in the U.S. She relies on her best friend and neighbor when she needs help. This need is increasing now that her vision is impaired. When I spoke with Heidi I asked her about her one best friend. She mentioned that this neighbor is 86, but is “doing pretty well”. Heidi had recently fallen twice in her home, but fortunately escaped serious injury from those falls.
Heidi has a will and a trust, power of attorney and healthcare directive. The appointed person on those documents is her cousin who lives in another country. If an emergency occurs, it is not at all clear who would be available to assist her.
This situation is a disaster waiting to happen. The risk of another fall, vision problems that will likely prevent her from driving, and the age-related risks to her friend the 86 year old who could also become disabled or unavailable are all looming. I ask if her financial advisor has discussed the future with her, possible other living arrangements, a local person for a healthcare agent and what to do when she can no longer drive. “No” she replies, “we’ve never gotten into that”.
I urged Heidi to contact her financial advisor right away so plans could be made and her safety assured. She also needed to speak with her estate planning attorney to update her documents, ensuring that an appointed local person had authority to assist in any crisis or if Heidi loses independence. She is close to needing help now.
Think about your book of business and whether you have any “elder orphans” in it. If so, there are things any responsible advisor should address with such clients. Here are three essentials for every advisor’s discussion.
First, the legal documents. The advisor can get permission from the client to contact the estate planning attorney and find out what plans exist for an appointed person to step in and take over the reins when or if the client becomes impaired. a local appointee is critical. Someone has to be able to make financial decisions if the client loses the ability to make them independently.
Next, alternative living arrangements. A 90 year old with impaired vision who has fallen at home may need to consider options of where to live with help available onsite. The financial advisor knows what assets are available to pay for a choice such as assisted living. The advisor should bring this up and ask the client about what he or she wants.
The need for a local appointed person to be not only the advisor’s trusted contact, but your client’s person to reach in the event of an emergency. An appointee in another country is not going to be of immediate help. Explore other choices.
The advisor needs to expand the limits of the usual role of simply managing the money with elder clients who do not have any family. To keep you on track and aware of the special planning these aging investors need, get your free checklist of points to address at AgingInvestor.com. With it, you can be sure of what you need to cover in your planning conversations with you “elder orphan” clients. Download Your Advisor’s Seven Point Checklist— Best Planning For Aging Clients With No Family now so you can excel in appropriate future planning.
Scammers targeting your aging clients are getting smarter about how to fool them. Thieves can use spoofing computer software to trick the recipient of a call by showing a “real” number on caller ID. Pretend caller ID isn’t new but using it to target seniors on Social Security is a cruel tactic used to intimidate seniors. Here’s how it works. The evil caller has your older client’s telephone number and knows him to be at least of Social Security age. When the call comes in, it shows on the ID that yes, it’s Social Security. The caller immediately tells the elder in an authoritative voice that her Social Security number has been blocked. Of course this draws the expected reaction from most people–fear. They are not going to question what it means to have the SS number “blocked” or if that is even possible. (It isn’t.)
The caller says it is urgent and that in order to “reactivate” the SS number, the elder must act immediately, or their Social Security benefits will be affected. As your senior clients had paid into Social Security since its inception they don’t want to lose it. The scammer convincingly fakes concern and wants to “help”. All your aging client has to do is pay a fee and the number will be unblocked, they’re told. Many elders have heard of identity theft and believe that this person is going to help them prevent unauthorized use of their SS number, because that is what they hear on the call. Of course the caller then needs to “verify” the number and your client complies and recites the number. Instantly the number can be put into use any number of ways identify thieves have devised. And worse yet the elder pays them the “fee”.
Even if you believe with all your heart that YOUR aging loved is not dumb one and won’t fall for any of this, do not be so sure. Anyone can be caught off guard. Scammers are very clever at using fear and other strong emotions to manipulate unsuspecting aging parents to give up information without thinking about whether the request for it makes sense. You want to warn them. You want to remind them that they are never to give out any personal information like a SS number to a person they did not call themselves. Everyone’s Social Security numbers are potentially floating around in cyberspace enough as it is, without handing them to a telephone stranger who is lying to get them to pay money. You can warn your aging parents that the Social Security Administration will never ever call and ask anyone to verify the SS number. You can remind them that even if the caller ID shows something that looks real, it can be fake because spoofing software can show anything the scammers want it to show.
Millions of elders are approached regularly by this telephone scam and many others. My own mother in law, now passed, was very smart at fending off such phony calls and smelling a scam. But by age 95, that scam sensor she used to have seemed to fade. One day a man called her landline and said he was from Medicare. He just wanted to “confirm her Medicare number”. She had an active Medicare claim going on at the time, and we were helping her address the details. Because she had that claim, she fell for the trick. She gave the caller her full name, address, date of birth, mother’s maiden name, and her Social Security number. Fortunately we found out within a day and were able to jump into action to change all her accounts and credit cards. It took four months to straighten out the mess. The scammers got nothing. We got a lot of work, and had to take her to her banks and financial institutions in person to change everything. She felt bad because she was supposed to know better. Yes, but she forgot. We were lucky to find out before anything worse happened.
The takeaway here is that financial advisors are in a unique position of trust with your clients and they are likely to read a friendly letter from you, just giving them a heads-up about the latest scam. We urge you to create an old fashioned series of letters warning them about scams, about things happening in your industry that affect them, such as the Senior Safe Act and just staying in contact. When they hear from you in a friendly way, it reminds them of why they like and trust you. You’re more likely to retain them that way.
No time to write? Let us help at Aging Investor.com. We have free, pre-made client education material created just for seniors. You can simply download and send them out at intervals to all your retirement-aged clients. To access these items, ebooks and checklist, go to the Books and EBooks menu on our home page and find Resources for Clients. It can only make you look good to your investors!
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
It used to be that we could think of retirement in a kind of predictable way. People lived into their 70s perhaps, and we measured retirement by that. We used tables, algorithms and other tools to tell us how much we should save and how much we could spend in retirement. And it was all based on assumptions that may no longer apply.
Life expectancy for a woman in the U.S. in 2018 was 84 years. For a man, the figure is 80 years. Those averages do not take into account the fact that well educated and financially secure people live longer than average. This is presumably based on the notion that people who know what a healthy lifestyle is and who can afford the best medical care will outlive those who do not have those advantages. In my own county, for example, which has a high proportion of elders compared to other counties in California, one wealthy city shows a life expectancy for men of 93 years.
Suppose that your aging client lives to be 93, having retired at age 65. That’s 28 years of retirement. What the algorithms don’t clarify is what you, the advisor needs to plan for with your client during the last decade of life, from 83-93. No formula is going to help you with the individual discriminations you need to make concerning your client’s risks for care and how to assess and plan for them. They can be a substantial cost, out of pocket, not covered by Medicare, and absolutely necessary.
The way we age is determined by two main factors: hereditary tendency and lifestyle. Our genetic makeup directs only about 30% of the equation. The other 70% is driven by the way we choose to live our lives. There are plenty of folks who think that a healthy lifestyle is just too much bother. They avoid exercise, eat whatever they feel like eating, never learn to manage stress and say they’d rather die a few years sooner than give up their habits, which their doctor advises against.
Here’s the problem with that belief. Leading an unhealthy lifestyle does not just cause you to “die sooner”. Rather, it may likely cause you to live with impairments, disabilities and a need for expensive long term care for chronic health conditions. These can go on for decades.
Take obesity, for example. Over two-thirds of Americans are overweight or obese. Obviously excess weight increases our risks for all manner of health issues, including diabetes, heart disease, high blood pressure, and strokes. When a doctor makes a diagnosis of one of these, the person doesn’t typically just die on the spot and save a lot of expense later on. No. The medical providers will keep the person going with medications, surgery in some cases, lots of diagnostic monitoring and trips to the doctors. These chronic conditions usually lead to disability late in life, particularly when more than one of them exists in the same person.
If you have aging clients, you definitely need to understand health risks in a basic way, so that you can help your clients set aside funds for the care they are likely to need in the last years of their retirement lives. All of the chronic conditions I mentioned are manageable with an effort toward a healthy lifestyle but for those who do not wish to do the work involved, you can bet on a likely need for long term care. While you can’t predict the future, you can plan for risk. It’s what you do.
My own mother in law had high blood pressure and chronic kidney disease for decades. She worked vigorously at diet, exercise, social activities and other components of a healthy lifestyle. Heredity was not on her side. She lived to be 96. During the last 3 years of her life, she needed help. She moved to a seniors’ community where help was available and eventually, she paid for private caregivers. Her cost of living at the last part of her life was $120,000 a year. If this were your client, would he or she have at the ready $360,000 to pay for care? How about if there was no pursuit of a great lifestyle? The care expense could easily be 10 years.
The takeaway here is that advising for longevity needs to include the skill of assessing fundamental health risks that create a need for out of pocket, long term care. You don’t need to be a doctor and you can’t predict everything, but you can do what is reasonable to help your client plan. Ask the right questions. Keep track of your client’s general health picture.
In a conversation with a prominent retired financial advisor from a large institution, I heard the following:
“Financial advisors are not interested in retired people. They’re taking money out. The advisors are interested in investors who are putting money in, not the other way around.”
Just hearing this generalization, whether true or not, gave me a kind of sick feeling in the pit of my stomach. Millions of Boomers fall into this category of retired. If their advisors lose interest in them when they are no longer increasing their investments, where does that leave the retired person in need of advice? The generalization sounded like age discrimination.
As a professional devoted to the well-being, financial safety and quality of life of older adults, I can only hope the statements I heard about lack of interest are untrue. I have met plenty of financial advisors who are indeed interested in maintaining their relationships with their oldest clients, not just based on whether the portfolio is increasing. They actually do care about the clients. For them, it’s not just an empty advertising slogan. I hope this is the majority!
Millions of clients served by advisors will retire soon enough or these clients are already in that phase of their lives. Competent financial advisors who have the ethics they hold themselves out as having will increase their skills in planning for lifespans for some of their clients who will live into their 90s and beyond. No logarithm nor mathematical table will do a complete job of this.
Here are some of the areas involved in longevity planning that the best advisors will fully understand by their increased training and preparation:
Social Security, and how to maximize the benefit.
Particularly with married couples, this requires specialized knowledge in order to give appropriate advice. When I asked my own long time B-D at our financial institution about it, he was very vague and couldn’t even refer me to anyone who could answer questions my husband and I raised. We fired him. We found an independent advisor who was very knowledgeable about Social Security. We referred three other people to this new advisor in the meantime and all became his clients. Take heed. Word spreads.
Long term care planning.
Telling a client who is reluctant to purchase long term care insurance that self-insuring is a choice is fine, but the longevity advisor understands how to address the risk of needing long term care and has actual figures at hand to spell this out for the client. If this is not your area of expertise, you can get a clear understanding of the costs of all types of long term care in my book, Hidden Truths About Retirement & Long Term Care. About 70% of people will need some long term care at some point. Know what it costs.
The nexus between financial planning and estate planning.
It never fails to surprise me about the disconnect between the financial advisor and the client’s estate planning attorney. Both should be working together to ensure that the client’s later years are financially safe. Successor trustees should be known by both the advisor and the lawyer, so that if a client begins to show cognitive decline, they can coordinate efforts to have the named successor take over decision making at the appropriate time. If you are worried about confidentiality of protected information, get the client’s permission in advance of any impairments, to communicate with the attorney involved. In other words, do this at the time of retirement.
Targeting relationship building with the next generation.
A loss of interest in a retired client deprives the advisor of a huge opportunity. That is, to establish a connection to and trust with your retired client’s heirs. Have you even spoken with any of them at the point of the aging investor’s retirement? If not, you have an explanation for the reason why about 80% of the heirs move their inherited assets to someone else after the patriarch or matriarch dies. The heirs can get to know you well in advance if you invite them, with your client’s permission of course, into the planning conversations. Don’t lose that chance.
In a nutshell, the older client needs the skill the financial advisor has and retirement should not change the advisor’s interest level. Keeping clients for life takes an understanding of longevity. Make it your business to do just that.
The financial services industry often refers to retirement planning for the future with aging clients in terms of “housing choices”. This reflects some degree of misperception about what happens as we age. For healthy people of retirement age, there is little interest in planning for the need for care and planning for loss of independence. People usually resist talking about it. We don’t choose to lose our independence. It happens. It is up to the advisor to raise it if you want to advise for longevity. The subject is emotional and can be difficult.
Where we need to get help when we can’t be independent any longer is really a choice about care, rather than housing. This is not house shopping. Does a client want to pay for care in her own home when that time comes? Most would say yes, they want to remain at home. They then must calculate what a home care worker costs and whether that is the best way to receive the help they are likely to need one day with their activities. Can the resources be available to enable that choice of where care will be given?
If an elderly client is living alone and can’t manage at home anymore without assistance, there are indeed choices, often driven by the degree of care needed and the cost of getting it. Elders may not be interested any longer in maintaining a house, cooking, shopping, and other necessary chores. For them, assisted living may be desirable because their daily lives will be different and free from the burden of the household that has become unmanageable. The choice to go to assisted living is usually not one a client is going to make because of wanting to downsize into an apartment for its own sake. Rather that is the price of going to the place where assistance is on hand. Again it is to receive care, not because they love the idea of not having their home any longer. For many elders, downsizing from a house to an assisted living apartment is a difficult adjustment, required because of physical or mental changes of aging. From that perspective it is a choice forced upon them.
A factor every advisor should know is that the likelihood of living alone increases with age. Almost half of women age 75+ lived alone in 2010, according to the Institute on Aging. The “choice” of a different living arrangement is brought on by safety and care concerns, often raised by their adult children.
It will be good for every advisor who wants to help clients plan for longevity to consider that their role is to introduce the issue of possibly needing care in the future, as about 70% of us will one day. If your client has you in her life, she already has housing. Planning for “housing” is a misnomer. Focus on places and choices where care can be delivered. Having no care plan can be disastrous, as sudden health crises can force decisions without considering the cost of care in advance.
In helping to educate your client about where he or she can receive care, the costs of all the offerings available in most areas are spelled out in detail in our book, Hidden Truths About Retirement & Long Term Care. You can develop quick expertise on the subject there. Skilled advice about longevity for your aging clients requires knowing your numbers, what care options are available where they live and how much they can expect to spend for that care. Smart advisors gather the data before a crisis happens and urge clients to look at it with them.
Your clients are getting ready for retirement. You’ve done the calculations, balanced the portfolio and advised them of what income to expect. You’ve discussed how much spending is ok. You used your program and your analysis was thorough. You’ve done your job, right?
Not exactly. There is probably no algorithm nor program that will calculate your client’s individual profile of health risks that will likely lead to the expense of long term care. That can be a whopper. Maybe you’ve suggested long term care insurance. Most people don’t choose to buy it. For those who do, the benefits are limited and the “elimination period” (deductible) is thousands of dollars. There go your careful calculations. At least 90% of folks don’t have that coverage. Now what?
But how can you predict what’s going to happen to anyone’s health in retirement, you ask. You can’t be precise, but you surely can make some rational observations and give advice accordingly. Those observations consist of two parts: what you can see with your own eyes and what you can glean by asking a few basic questions. If you think asking any client about their health conditions is too nosy or not your job, consider that if the client needs long term care and runs out of money because of it, they’re not going to think much of you. And the cost can wipe out their security.
Asking about health issues is not nosy at all. Rather, it’s what any smart advisor planning for longevity must do. Let’s not keep pretending that everyone stays the same physically and mentally from the start of retirement to end of life. Our bodies go through wear and tear and things break down. Cognitive decline affects at least a third of people who reach the age of 85. The risk of Alzheimer’s disease keeps climbing after that. Now, what was that life expectancy you were using in your calculation? Was it age 99?
Let’s start with what you can see in your client with your own eyes. (If they’re not in front of you, perhaps Skype is an option). Is your client obese, as about 40% of the U.S. population is? This leads to heart disease, stroke, and diabetes, among other diseases and conditions. The medical care people receive in many cases will save them from dying but they then live with disabilities. And yes, they will be very likely to need expensive long term care. Neither health insurance nor Medicare will cover long term care. Such help as a part time caregiver at home is how most folks start out with long term care. Your client pays out of pocket most of the time. Did you calculate how much it costs as well as how long they will likely need it? If they have multiple medical conditions, and have started long term care, they’ll probably continue to need some form of it for all their remaining years.
Find out what you may not know from simply observing your client’s appearance by asking questions. You can make your own list or get a health care provider to help you with a few targeted questions. You will need to educate your client as to the reason why you need this information. It’s to help them plan for how much to save in their retirement years.
Here are some examples of basic questions that can help you predict the need for possible long term care:
How’s your health these days? Has a doctor told you that you have any long term conditions?
Are you taking medications? What are they for?
Do you smoke?
Are you concerned at all about any health issues you have at this time?
Do you recall your parents’ ages when they died?Your aging clients will not be eager to talk about the potential need for long term care. When you told them about what to expect for “out of pocket medical costs in retirement”, you did not give them a figure that included long term care. Long term care is not “medical” according to Medicare. Rather, it is called “custodial care”. The client probably will not bring it up, so you must do this.
When you have done your observations and gotten answers to your health-risk related questions at least there is a place to start a meaningful conversation. You can give them figures as to the cost of typical kinds of care, such as a non-medical home care worker. We at AgingInvestor.com recommend starting your projections at age 80 as to when a person might need physical help. Many of us know someone who did require help with at least some part of his or her life at that age. Then you can talk about how any condition your client identifies for you, such as high blood pressure, diabetes, etc. as shortening normal life expectancy and increasing the risk for needing help. If your client already has difficulty with some normal daily activity such as walking or bathing, they are definitely at high risk for needing paid help sooner than a person without these problems.
Clients may be completely unaware of such things as the hourly cost of a home care worker, what assisted living costs each month and what home modifications cost if they are able to remain in their own home. You can find a thorough discussion of these and many other parts of long term care in our book, Hidden Truths About Retirement & Long Term Care, written specifically for financial advisors like you.
Every conscientious advisor needs to wake up to the reality that your retirement income calculator omits the reality check of health problems. We’re not talking about nursing homes, but every other kind of care and help most people will need as they age. If you do want to help clients who are reaching retirement age to plan realistically, include the health risks you can see or learn about by asking.
Scams, theft and fraud with seniors’ money is a growing problem. Now the Wall Street Journal reports that banks in our country calculated a 12% increase in financial elder abuse just in the last year. Why do the thieves pick on grandma or grandpa so much? It looks so ugly to take advantage of an elder.
Your aging clients, whether getting advice or investing in your institution, are targets without a doubt. They hold a disproportionate amount of our country’s wealth. And you can help stop them from being victimized. Over $36B a year is stolen from elders in the U.S. alone.
Your aging parents are easy targets for scammerThe Ss for lots of reasons. Elders in this country hold a disproportionately high level of wealth compared to younger people. Some have accumulated significant assets and they may not see themselves as vulnerable at all. Clearly, diminishing cognition makes it easy for thieves and manipulators. Cognitive decline affects at least a third of people over age 85. Your aging client may not have the awareness any longer to spot a fishy-sounding line from anyone. Widowed clients live alone and are isolated, ready to engage with that friendly sounding, cheerful voice from the clever scammer on the phone.
Thieves stay in contact and weave a trap over time. Many aging folks are dependent on others for care, for help at home and for social contact. Dependency makes them vulnerable. Unscrupulous family members lead the pack of those who seize on that vulnerability and trust to rip off their elders. It’s all too easy to influence an aging person to give a “loan”, access to an account, or power of attorney to a person with ulterior motives, which essentially creates a license to steal. Eventually they all want your elderly client to give them money. That’s where your awareness can thwart them.
Banks are making efforts step up their reporting of suspected elder abuse, but that is not enough to thwart the crime. The Senior Safe Act gives you, the financial professional protection if you report suspected financial abuse. Great. But how about stepping up your contact and review of transactions with any elderly client before abuse happens? Too often, the customer-facing bank employee does not see anything wrong until far too much money has been drained from the elder’s account. After the abuse has occurred, it is too late to get the money back. And there is hesitation at the banks, even when they are warned. To put bluntly, banks can add to the problem.
One example of this involved a client of ours at AgingParents.com where we consult with families and elders. She was the daughter of an 87 year old dad who had some memory problems and was frail, losing independence. Her father was a wealthy man, in a long-term relationship with a younger woman. She had manipulated him into giving her access to his family’s trust account into which his significant income was deposited each month.
The man’s daughter found out after a suspicious withdrawal from the account and she contacted the bank immediately. She traveled to her father’s state, went to the bank in person and showed them the trust, which did not have the girlfriend’s name on it anywhere. She asked them to stop the access by the girlfriend. The bank complied and put the funds into an account to which the girlfriend did not have access. After the man’s daughter left the state, the girlfriend took the elder back to the bank and told him to say that he wanted her on the account. Presto! The bank complied and the girlfriend then had access once again, only one day later. The bank aided the girlfriend in financial abuse of their own elderly customer, despite a specific request to stop it and evidence of manipulation. The matter ended up in litigation. We can only say “how ridiculous!” The financial professional, bank employee or manager should have known better. The picture was classic: warning had been given, paperwork proving the problem was given to the bank, and the bank agreed to take the pushy girlfriend off the account. Then they turned around the next day and did the opposite, just because the elderly customer was standing there. Never mind that he was manipulated into saying what the woman told him to say, prodding him as he stood there. That kind of scenario is what needs to change.
If you are now supposed to report abuse, you definitely need to know what the red flags of diminished capacity look like and how to see the warning signs of financial abuse. At AgingInvestor.com, we offer accredited courses to train financial service employees, compliance officers and managers in how to spot warning signs of cognitive decline and financial elder abuse.
Get your free checklist of the red flags of diminished capacity here.
Here are some takeaways:
1.The Senior Safe Act gives you some immunity if you report abuse. It offers you no guidance in how to spot elder financial abuse.
2. Aging clients with diminished capacity are, of course, much more vulnerable to manipulation by an unscrupulous romantic “friend”, family member or stranger on the phone or internet. They need your protection.
3. Odds are that by the time you report suspected abuse, the money is already gone and authorities cannot get it back. It makes more sense to be proactive in protecting aging clients rather than merely reporting abuse. Learn about how to do that by training.
Most advisors who even ask this question of their
retirement-aged clients never spend time on it. About 90% of those asked say
they want to remain in their own homes as long as possible. That sounds fine. Until one faces physical
decline, cognitive impairment or both. The advisor providing competent guidance
about financing aging at home had better know the facts.
None of us like to think about losing physical ability or needing help. We abhor the thought of losing our total independence. In our view at AgingInvestor.com, the only advice clients are getting is about the long term picture is whether or not to purchase long term care insurance. Since most people don’t do that, the actual costs of living at home can boggle the mind. It’s the best advisor’s obligation to educate your client about the risks of the plan to age in place, just as it is your obligation to educate them about balancing their portfolios. You are giving the client added value if you take the time to talk them through the risks and dollars they may need to have available.
Here are some briefly stated facts from a real case in which
an 89 year old wanted to age in place and his wife promised he would never have
to leave home.
At the outset of his declining health, he had about $3M in
invested assets. His portfolio was healthy and balanced for his age, according
to conventional wisdom. He began to lose his ability to walk due to multiple
medical problems. His wife hired home helpers, three days a week at first. As
his conditions progressed he needed more and more help. He had to have a wheelchair, and a special
van. A stair chair was installed in their two-story home. By the time he
reached age 95, he was spending over $150,000 a year on care and assistance
around the clock. In the space of time during which he was steadily losing
independence until he passed away at 95, his assets were depleted to the tune
of $2M. He lived in a higher end market for the needed help but the reality is
that in any market, the kind of care he needed would be very expensive.
For him, aging in place was more costly than a skilled
nursing facility would have been. Home modifications, private caregivers, (none
of whom were licensed nurses), equipment, medications, adaptive devices, etc.
drained his resources by 2/3. And not everyone has as much invested as he had
to even start the journey. His wife had her own assets and she paid the cost of
household maintenance, taxes, food, and utilities with her funds. Had she
relied on him for those things too, there would likely have been little left at
the end of his life.
It is not all doom and gloom however. Many clients live rather well in their last years without all the care this gentleman needed. Some get by with family caregiving help, and some have fewer medical conditions. But if you are going to competently help your clients plan for longevity, it’s essential to understand the real out of pocket costs of aging in place or anywhere else outside the home. If you want to add value to your services to older clients, know what they need to know to properly anticipate what can happen with living into one’s 90s and beyond. Learn all the actual costs of care for every aging client option in our book, Hidden Truths About Retirement & Long Term Care. Be well prepared to walk your client through the scenarios they could face in their futures. You distinguish yourself from other advisors when you sharpen your knowledge in planning for longevity.
Your clients are getting ready for retirement. You’ve done the calculations, balanced the portfolio and advised them of what income to expect. You’ve discussed how much spending is ok. You used your program and your analysis was thorough. You’ve done your job, right?
Not exactly. There is probably no algorithm nor program that will calculate your client’s individual profile of health risks that will likely lead to the expense of long term care. That can be a whopper. Maybe you’ve suggested long term care insurance. Most people don’t choose to buy it. For those who do, the benefits are limited and the “elimination period” (deductible) is thousands of dollars. There go your careful calculations. At least 90% of folks don’t have that coverage. Now what?
But how can you predict what’s going to happen to anyone’s health in retirement, you ask. You can’t be precise, but you surely can make some rational observations and give advice accordingly. Those observations consist of two parts: what you can see with your own eyes and what you can glean by asking a few basic questions. If you think asking any client about their health conditions is too nosy or not your job, consider that if the client needs long term care and runs out of money because of it, they’re not going to think much of you. And the cost can wipe out their security.
Asking about health issues is not nosy at all. Rather, it’s what any smart advisor planning for longevity must do. Let’s not keep pretending that everyone stays the same physically and mentally from the start of retirement to end of life. Our bodies go through wear and tear and things break down. Cognitive decline affects at least a third of people who reach the age of 85. The risk of Alzheimer’s disease keeps climbing after that. Now, what was that life expectancy you were using in your calculation? Was it age 99?
Let’s start with what you can see in your client with your own eyes. (If they’re not in front of you, perhaps Skype is an option). Is your client obese, as about 40% of the U.S. population is? This leads to heart disease, stroke, and diabetes, among other diseases and conditions. The medical care people receive in many cases will save them from dying but they then live with disabilities. And yes, they will be very likely to need expensive long term care. Neither health insurance nor Medicare will cover long term care. Such help as a part time caregiver at home is how most folks start out with long term care. Your client pays out of pocket most of the time. Did you calculate how much it costs as well as how long they will likely need it? If they have multiple medical conditions, and have started long term care, they’ll probably continue to need some form of it for all their remaining years.
Find out what you may not know from simply observing your client’s appearance by asking questions. You can make your own list or get a health care provider to help you with a few targeted questions. You will need to educate your client as to the reason why you need this information. It’s to help them plan for how much to save in their retirement years.
Here are some examples of basic questions that can help you predict the need for possible long term care:
How’s your health these days? Has a doctor told you that you have any long term conditions?
Are you taking medications? What are they for?
Do you smoke?
Are you concerned at all about any health issues you have at this time?
Do you recall your parents’ ages when they died?
Your aging clients will not be eager to talk about the potential need for long term care. When you told them about what to expect for “out of pocket medical costs in retirement”, you did not give them a figure that included long term care. Long term care is not “medical” according to Medicare. Rather, it is called “custodial care”. The client probably will not bring it up, so you must do this.
When you have done your observations and gotten answers to your health-risk related questions at least there is a place to start a meaningful conversation. You can give them figures as to the cost of typical kinds of care, such as a non-medical home care worker. We at AgingInvestor.com recommend starting your projections at age 80 as to when a person might need physical help. Many of us know someone who did require help with at least some part of his or her life at that age. Then you can talk about how any condition your client identifies for you, such as high blood pressure, diabetes, etc. as shortening normal life expectancy and increasing the risk for needing help. If your client already has difficulty with some normal daily activity such as walking or bathing, they are definitely at high risk for needing paid help sooner than a person without these problems.
Clients may be completely unaware of such things as the hourly cost of a home care worker, what assisted living costs each month and what home modifications cost if they are able to remain in their own home. You can find a thorough discussion of these and many other parts of long term care in our book, Hidden Truths About Retirement & Long Term Care, written specifically for financial advisors like you.
Every conscientious advisor needs to wake up to the reality that your retirement income calculator omits the reality check of health problems. We’re not talking about nursing homes, but every other kind of care and help most people will need as they age. If you do want to help clients who are reaching retirement age to plan realistically, include the health risks you can see or learn about by asking.
It seems that regulators are fond of creating new mandates for you without telling you how to implement them and what risks might be involved. The new FINRA rule that says you must “try” to get a trusted contact person (TCP) for new clients is illustrative.
First of all there is no firm requirement that you actually get a TCP for anyone. All you have to do is make an attempt. If the client says “no”, you’re out of luck in trying to solve any problem that may exist without anyone to call in the event of an issue you see. Such issues might include someone ripping off your client or your client really losing his marbles. The intent of the rule was good. The idea was to increase protections for vulnerable elders. It’s just that the way clients act and the issues you are sure to see with one TCP have been ignored in regulators’ creation of this mandate.
Research has given us important information about protecting elders from financial abuse. We know that family members are the most frequent abusers of elders. Guess who most elders would think of as a TCP? The family member, of course. The idea of a single TCP is flawed from the outset. If the idea is to keep your client financially safer, you don’t want to be limited to the potential abuser as the TCP. That defeats the purpose.
Here at AgingInvestor.com we are on a mission to keep elders safer. We make every effort to fill in the blank places your regulators leave when they come up with a mandate like getting a TCP for your clients. Here are our recommendations on this subject and why we say what we say about TCPs.
First, we believe every advisor should not only “try” to get a TCP for every client–we think you should insist on it as a matter of your intelligent, proactive senior office policy. Every client, new and existing should be approached with a courteous, respectful explanation and request to name a TCP you can contact in case of need. You let clients know that you have a policy to protect them from potential predators who are out there trolling for your clients, particularly the seniors. You could write this explanation and request up and send it around or bring it up at every portfolio review.
Next, we recommend that you get not just one TCP for every client, but three. The reason for this is that since family members are often the abusers of vulnerable people, you need someone else to call if “sonny boy” is ripping off dad’s account and dad is too impaired to realize it. “Sonny boy” just might be the one TCP his dad, your client named and you would then be stuck with no way to protect your client in that situation. Someone outside the family would be ideal. This could be the estate attorney, a competent friend, or a clergy person your client trusts. Any of them would need to be able to intervene when learning of suspected financial abuse of your client. A third TCP could be another family member your client also sees as trustworthy. With information going from the advisor to three people at once, the risk of abuse is lessened and the chances of effective action in the event of abuse are increased.
Finally, we recommend that you consider all the risks involved in a decision to reach out to the TCP when you see red flags of diminished capacity in your client, or when you see warning signs of financial abuse of your client. You do need a written internal office policy that directs you as to the observations, documentation and steps to take when an issue comes to your attention. Legally, you are probably on firm ground, carrying out the intent of the FINRA regulation. However, you don’t want to set your client up for harm.
For instance, if the client is in the middle of a contentious divorce and the ex- spouse is the TCP, do you want to release information about your client’s finances that could harm your client in the divorce proceeding? Give yourself time to discuss the options with other, knowledgeable people in your office, or group. The value of having a proactive office policy for aging clients in this situation is that you have others to ask and weigh in with their points of view.
Need help with that smart, proactive senior office policy? Ask for a consultation at AgingInvestor.com and get the guidance you need from our nurse-lawyer, geriatric psychologist team
<p><code> </code></p><div class="signature"><table style="border: 2px solid #999; border-style: solid; background-color: #f5fff5;"><tbody><tr><td style="width: 110px; vertical-align: text-top; align-content: center;"><div style="border: 1px solid #eee;"><img class="alignleft" src="http://www.aginginvestor.com/wp-content/uploads/2015/04/DavisRosenblattPublicityPhoto.jpg" alt="" width="123" height="116"></div></td><td><h4>Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com</h4><p>Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.</p><p>Dr. Mikol Davis, Psychologist, Gerontologist offers depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.</p><p><a href="http://www.aginginvestor.com" target="_blank" rel="noopener">AgingInvestors.com</a> offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click <a href="https://agingparents.leadpages.co/ceu-choices/" target="_blank" rel="noopener">HERE</a></p></td></tr></tbody></table></div>
The regulators are trying. They want to help advisors protect aging clients from financial abuse. They don’t want you to fear doing something wrong if you refrain from handing over assets to what looks like an abuser. But not living in the real world of how to stop abuse by determined abusers has its disadvantages. The new rule tells you who is at risk (elders and other impaired adults). It tells you that you just need a reasonable suspicion of abuse, not unquestioned evidence. It tells you what a temporary hold is and how long it can be: 15 days, 25 at max. Sounds ok. Until you actually know how long it takes for the legal steps to halt abuse.
Here at AgingInvestor.com we see this problem in the world of families and those who want to rip them off, not from inside an institutional setting or financial services firm. The world from here looks different from what FINRA imagines. There is usually no way anyone can stop abuse in 15 days or even in 25. We explain. In a real case, the kind this rule is designed to affect, we worked with family in an unfortunately typical situation of an unscrupulous son trying to squeeze money out of his 90 year old father who had dementia. The advisor had seen the pattern. He knew the son never did well on his own and he had been given handouts from dad for years. Dad, whom we’ll call Joe, lived in a nursing home. He needed help with everything and his memory was shot. He was easily confused. Yet his advisor never questioned his ability to effect financial transactions. But when the son, we’ll call Jake, brought his frail father into the advisor’s office demanding $50,000 plus access to the cash management account, the advisor was sure it was abuse. He knew his client was too confused to disagree with Jake. The advisor dragged his feet and didn’t provide the check his client had asked for, pushed by Jake, Over a month later, he felt obligated to give his client the $50K, which of course Jake got right away from Joe. The advisor didn’t have Rule 2165 but he knew that Joe’s daughter Rhoda was the appointed person as power of attorney and successor trustee. He didn’t have permission to contact her, so he did it, as he said “on the QT”. Rhoda was upset. She called us for advice. She found us through her own advisor who had the sense to send her to a resource who could answer her questions and guide her.
First we looked at the trust and what it said about Joe being removed as trustee or resigning as such. Two doctor’s letters were needed, verifying that he was no longer competent to manage finances if he was to be removed as trustee. We advised her to get those letters asap. Rhoda lived out of state from Joe. She found the doctors and flew into town to take him to the appointments. Fortunately the doctors were able to say that Joe had indeed lost his capacity for handling his money. A couple of weeks after the appointments, Rhoda got the letters she needed. She then had to take them to Joe’s estate planning attorney, who met with her and eventually gave her a Certificate of Trust, showing that she was now the successor to Joe and was in charge of his money. She then had to get the Certificate to his advisor’s firm, which had to review it and after two weeks, they accepted it. Only then was Rhoda able to stop any further disbursements from Joe’s account without her permission. Her brother was furious. His gravy train had stopped. The advisor had sent a debit card for the cash management account Joe requested under pressure to Rhoda, not to Joe. Rhoda destroyed it. Abuse stopped in its tracks.
Reality check: this scenario of stopping abuse involved a lawyer, an elder willing to go to two doctors, the cooperation of two doctors, travel between states, the approval of the Certificate of Trust with Rhoda’s name on it through a process by the advisor’s firm and a lot of time spent by Rhoda. The entire matter of protecting Joe from abuse took three months. Rule 2165 supposedly authorizes advisors to “take immediate action” when abuse is reasonably suspected. What is myth rather than reality is how long it takes to actually protect the elder and stop a predator. This was a case of undue influence by Jake who had a history of manipulating his father. And the new rule would not have helped at all. Jake would have happily waited for a mere 15 days to get his hands on the cash. Rhoda couldn’t possibly get Joe removed as his own trustee without the doctors’ letters. This sort of prerequisite of needing doctors to verify incapacity is commonly required in typical trusts. Perhaps the drafters of Rule 2165 never had to go through the process described here in their own lives. If they had, the new rule would provide for a 90 day authorization to hold transactions, rather than a maximum of 25 days. Maybe going forward when the myth gives way to reality, the rule will be revised. For now it is inadequate.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
You may have heard of the fake calls from thieves pretending to be from the IRS. It can be a threatening robocall. Or it can be a male with an aggressive manner telling the recipient of the call that they will be arrested for owing back taxes if they don’t pay immediately. These criminals carefully select older people and anyone they consider vulnerable to their fake pressure. Your aging clients could be a target and scammers want to terrify them.
How do they get the names of our aging parents? They buy them. Information is for sale, from lottery entry forms, contests, magazine subscriptions and from hacking whatever can be hacked. Identity information can even be purchased on the black market. “Information brokers” have been around for decades and so have these telephone scams. Supposedly, the entities that sell the names don’t care what the buyer does with them. There are likely millions of names and telephone numbers available to the scammers, given the nationwide nature of their ripoff efforts. Apparently, names and numbers are very easy for them to get.
Here’s how it works: The caller catches the unsuspecting older person off guard. The call is official sounding: “This is Officer James with the Internal Revenue Service and I am calling about an urgent matter! Do not hang up!” Sometimes they are even able to secure a fake caller ID that says “IRS” or looks like a legitimate government entity to those with caller ID. There were also reported cases when they used the name and email address of a CFPB employee.
They then tell the stunned elder that they or their spouse has an overdue debt to the IRS and if it is not paid immediately they will be arrested. Of course, they want the elder to use a wire transfer or a prepaid debit card so the thief can’t be traced. The frightened person will hurriedly comply and realize only later that it was a scam. In the moment of reacting to the threat, they are not thinking clearly. They are moved by fear–just what the thief was hoping for.
No matter how many public service announcements are sent out, and no matter how many Federal Trade Commission, AARP or National Center on Elder Abuse warnings are posted, the scam is still working. We at AgingParents.com think the best way to keep our aging loved ones financially safer is to personally warn them yourself about these scams. They will probably listen to family more readily than they would seek information from the internet or official sources trying to spread the word. Of course, the IRS will never, under any circumstances call someone and demand payment of a debt. Their official communications about taxes are by snail mail.
If these evil scammers were not successful, they would stop doing this. But sadly, it works and they are relentless. My neighbors, many elders, have reported that they have gotten these calls this week. Beware. Please take the time to alert your loved ones to this problem. And don’t think your mentally alert aging loved one is too smart to fall for this. No one is immune from being shocked and intimidated by a sudden call. It can happen to anyone.
We at AgingInvestor.com think the best way to keep your older clients financially safer is to personally warn them yourself about these scams. They will probably listen to family more readily than they would seek information from the internet or official sources trying to spread the word. Of course, the IRS would never, under any circumstances call someone and demand payment of a debt. Their official communications about taxes are by snail mail and that is not likely to change anytime soon.
If these evil scammers were not successful, they would stop doing this. But sadly, it works and they are relentless. My own neighbors, many elders, have reported that they have gotten these calls this week. Beware. Please take the time to alert your clients to this problem. And don’t think your ever so sharp client is too smart to fall for this. No one is immune from being shocked and intimidated by a sudden call. It can happen to anyone.
If you want to send a friendly letter to your clients about this scam and don’t have time to put it together, we make it easy for you. Just go to this link and download a free pre-made letterto send out.
Revise it with your name or firm name and you’ll look good by showing that you do care about their financial safety. You’ll never regret doing your part to thwart thieves and prevent financial elder abuse.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
You’re trying to help the sixty-something clients plan for what they can anticipate spending for medical care in the future. You tell them about the average amounts a couple retiring at age 65 will need. The language seems fuzzy. Are you, the advisor, completely clear about what the term means when you say “out of pocket medical costs”?
That which is “medical” and what is paid by Medicare does not seem to be clear to many financial professionals we’ve interviewed. If you want to help your clients plan adequately for retirement, here are some critical points you need to make with them.
Medicare never paid for what it calls “custodial care”. This is not medical care by Medicare’s definition. It did not cover it in the past and it does not pay for it now. There is a distinct and very important difference between what it covers and what most people need over the long run in their retirement years. If your idea of “out of pocket medical costs” is hazy, let’s clear it up right now. This is a list of things Medicare doesn’t pay for, which just happen to be the most common things people need as they age. This is only a partial list.
Nursing home (“rehab”) after a limited number of days. The maximum coverage depends not on how sick the client is, nor how much help they really need due to such disabling conditions as a stroke, nor how they feel. It depends solely on what the nursing home administration decides about whether they are continuing to make the right kind of progress. That progress must require skilled care which can be nursing, physical, speech or occupational therapy. There may be 100 days available for coverage, but this does not mean that all of it will be covered or that the person will get that much in the rehab facility. If it is decided that there is not enough progress, the person’s care is termed “custodial” and they are cut off from Medicare.
Home Care. Millions of people who are released from a nursing home after surgery, an emergency or a fall, for example, need help at home either short term or long term. Medical events change us and can rob us of complete independence. There is a false belief around that Medicare will cover what you need if you have to have home care. This is true only for a very short time and only if skilled, licensed nurses or therapists are needed at home. Most of the time, a person is cut off from help when leaving a facility and has to pay for home care out of pocket. The national average hourly rate is $20, which can eat up one’s assets quickly in a fairly short time frame.
Help at home to stay out of a care facility. A lot of folks think they’ll live to be 100 years of age. No one discusses with them what it would mean to live that long without being completely independent. Help costs money. Many people assume that family or someone will take care of them if care is needed. But not everyone is willing to or capable to undertake what is often a serious burden. Even when family does take on caregiving, they need a break, and relief. Then help from outside must be hired. Without constant help many older people would have to be in a care facility. Does it make sense that when assets are largely all spent, Medicaid will pay for a nursing home but Medicaid will not pay for preventing the need for a nursing home, a far more economical alternative? Of course not, but that’s how it works.
The Takeaways
Fully two thirds of us will need long term care at some point in our lives. Unless the client is the rare one with long term care insurance, there is no way to pay for long term care other than to do so out of pocket. Sometimes this depletes all the client’s assets and leaves them with no choices in the last part of their lives. For those who live into their 90s and beyond, the need for some kind of long term care by family or a facility seems almost inevitable. Your clients need to stop pretending that it’s not going to happen to them, and you, the professional must steer them in the direction of saving and anticipating this need as much as you can. They will resist! Keep trying. Educate yourself first. You can get all the facts and figures you need to have a wise conversation with your older clients in our new book, Hidden Truths About Retirement & Long Term Care. Get your copy now and start adding value to those retirement discussions with your clients.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
Your older investors are sure it will never happen to them but Medicare fraud can trick anyone. Even those without a hint of cognitive decline can get taken by scammers. At AgingInvestor.com, we educate advisors about protecting clients from elder financial abuse and we thought we had our own family covered. With a 94 year old mother, we are especially alert. We were stunned when mom told us that someone “from Medicare” had called and asked her to “verify” her personal information.
Alice is a sharp 94 year old, living mostly independently in a seniors’ complex. She’s active, does her own shopping and is engaged with her neighbors in the community. She had an issue with Medicare not paying a bill for a service she had received some months prior. With our help, she had undertaken an appeal process, which involves a lot of repetitive paperwork. When a man saying he was from Medicare called, she thought it was about the appeal. Of course it wasn’t. The scammer asked her to “verify” her Social Security number, her address, date of birth and mother’s maiden name and she gave him that information.
A few hours later, she mentioned what had happened and said she had been wondering if it was right to give out that information. We were shocked! How is it that she didn’t see the potential ID thief when we talk about this all the time? We knew we had to jump on this right away to stop the thieves from using the information to open new accounts in her name. Hours were spent the next day calling the two banks where she had accounts, her credit card company, the credit reporting agencies and Social Security. We had to stop the auto debits on her bill payments. We cleaned up the mess.
So far so good. No unauthorized transactions have happened. Her old accounts were closed and new ones opened. Social Security sends her payments to the new account. Fraud alerts are on everything now. Whew! This was a lesson that even the alert older person can get fooled with the right pitch on the phone.
Here’s the takeaway.
Warn your clients: Medicare will NEVER call and ask you for your personal information. Never give it out unless you place a call to order something that you know is legitimate.
Medicare fraud can happen in many forms. This was just one of them. I believe that there was probably a connection between her Medicare appeal and the fraud attempt. It’s too much of a coincidence that they called when she had communication with Medicare going on already with her appeal. The appeal had not yet been resolved. This information got into the wrong hands, making it easy to trick a sharp person by saying he was calling from Medicare. Mom could be just like any one of your older clients.
Why is this important? You’re on the front lines and you have a trusting relationship with clients. Speak up and make basic efforts to educate them about these scams. A lot of money can be drained from an account instantly with all the client’s personal information out there. Make yourself look good. A word from you can remind your aging clients that you care about their financial safety and that you are looking out for them.
Carolyn Rosenblatt, RN, Elder Law Attorney, & Dr. Mikol Davis, Psychologist, Gerontologist, co-founders AgingInvestor.com
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
How Much Should You Plan On For Retirees’ “Out of Pocket Medical Costs”?
For those outside the caregiving world, there is a lot of confusion about this cost. Calculations abound in retirement planning circles for helping your clients ensure that they have enough for the things they are likely to need medically. The usual calculations outline Medicare Part A premiums (deducted from Social Security payments), Medicare Part B supplemental health insurance premiums, also called “Medigap” and for medication expenses, as some are not covered my Medicare. In plain English, this means that your client’s Social Security is less to them when the Medicare payment comes out and they have to pay out of pocket for the other kind of insurance that covers outpatient care, clinic and doctor visits, as well as prescription meds.
OK what’s wrong with these calculators? Can’t you rely on them? I think for an unusually healthy person who is your client, one who needs little care and has no chronic illnesses, they would be fine. I’m not sure where the folks making up the calculations get their statistics but I think they grossly underestimate the real costs of out of pocket medical care in retirement.
From personal experience with thousands of elders I visited at home as a nurse over a career, I did not see much of the unusually healthy. What I did see was the average person then taking numerous medications, having multiple chronic conditions and being at risk for those getting worse with age. And now, decades later, we live longer, have more health risks as a result of greater longevity and we have to pay more for the problems that go along with living to be 100. We have better diagnostics and we can catch and treat conditions more. That means more out of pocket expenses for those exotic tests Medicare will not cover. That also means more and more drugs being prescribed to manage and control chronic illness. They work, but we pay. You would be amazed at what Medicare does not cover.
Here’s the message I want every retirement planning advisor to heed: you cannot predict how much out of pocket medical expense your client will have unless you really know a lot about both their genetic disposition and their health habits and condition. And then it’s only an educated guess. How educated are you?
We do know that the way we age is about 30% due to our genetics. The other 70% of the picture is directed by how we choose to live. That means what we eat, how much we move our bodies, how we manage stress, how we socialize and how we succeed or not in our relationships with others. All of these factors affect our health and longevity and consequently, how much it’s going to cost to keep living with conditions like heart disease, diabetes, cancer, hypertension, arthritis, etc.
We haven’t even touched on the subject of Alzheimer’s disease. If you are calculating out of pocket medical I’ll bet you never calculate what it costs to care for someone at home 24/7 with specialized skill for dealing with this devastating disease. It can last 20 years. Nursing home care and caring for a person with any serious illness at home is long term care. That is not in the calculations in those handy tables describing the out of pocket medical costs for an average couple retiring at the age of 65 and living to be 85.
Here’s an example. Mort is 95. He has multiple health issues and early dementia. He can’t do anything by himself. He has 4 caregivers in shifts every day in his home. He isn’t sure he wants to keep going but he doesn’t want to stop the numerous medications he takes to stay alive. It costs over $250,000 a year just for the caregivers, not for the other costs of housing, utilities, transportation via handicap van and such. And the out of pocket medical is still there. The dentist, the hearing aids, the medications that no insurance pays for, the stair lift, the ramp on the front of the house, the high-end wheelchair and more.
If you want to help your clients plan so they won’t run out of assets, you’ll need to be realistic. Lots of cash may need to be available at the later end of life. It is more likely than not. Forget reliance on a calculator or use one that has the highest number you can find. Then add on expenses like Mort’s and you’re on the right track.
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
What To Watch For: Aging Clients and The Sweetheart Scam
If it didn’t happen so often, there would be no need to warn your single, widowed clients about it. But every day, someone gets taken in by a “special someone” who appears to have only your client’s interests at heart. The special someone is a scam artist who knows just how to get an unsuspecting lonely man or woman into the web of deception. And then they finagle money out of your client and run.
Some of these scammers are skillful repeat offenders. Some just see an opportunity and proceed to milk it for all it’s worth. Take the case of Tommy, whose wife was ill with cancer. He used to take his clothes to the local dry cleaner every week and he got friendly with the woman who ran the business. She loved to chat and gossip and he was lonely with his caregiving, cooped up with the daily chores he had to do for his ailing wife. Norma, the dry cleaner heard all about it.
Just after his wife passed, Tommy got a visit from Norma. She was so consoling and comforting. He felt like he had a real friend. She had heard about his wife’s illness for over a year and was ever so sympathetic. She also knew he had money. Within a month she had moved in with Tommy.
Over the next six months of giving Tommy her undivided attention, she managed to persuade him to give her “loans” of over $300K. She promised to stay with him forever. He loved the flattery and feeling special. No sooner had Norma gotten the last of what she could easily take, she promptly sold the dry cleaning business and disappeared. This is not such an unusual story.
Here’s what every financial professional needs to know about the Sweetheart Scam. Professional predators comb the obituaries for stories about the beloved widow or widower left behind. They look for those who have been with a deceased who was a business leader, a banker, a financially successful person. They choose the ones who may be likely targets, the survivors who have means. They scope out how to meet them and seize the opportunity to take advantage of loneliness. They will stop at nothing to get in the door. And sooner or later they always need “a temporary loan” or a little help to get out of an unfortunate jam. If it works, they up the ante. This can go on until they have bankrupted a widow or widower. It will at least drain available cash if no one is watching.
That’s where you come in, the financial professional with the ability to notice when unusual withdrawals are coming out of your client’s account. Once the scammer has gotten control over your client’s emotions, it may be too late to stop the scam. Your client is “in love” or at least addicted to the showered on attention. She won’t believe your warning then. The heads-up must come early, before an opportunist has a chance to cast a spell.
Here’s the takeaway: any recently widowed client in your book is a potential target. Do these things:
Gently raise the subject of being careful of any stranger he/she meets soon after the loss of a spouse. Warn with empathy and facts.
If your client claims he’s met a “special someone” do some digging. Google the person he names. Ask a few probing questions. See what your client may not be able to see. Share the data you glean with your client.
Be sure you have contact information for a family member or trusted friend of your client whom you can call if you see something suspicious. Call them if you think your client is in danger, particularly if your client doesn’t want to hear your warning.
That protective posture you take on can save your client from disaster.
Financial elder abuse takes many forms besides the Sweetheart Scam. It is called “the crime of the century”, it is so prevalent. With the right know-how, you can stop it and keep your clients safer. Take a deeper dive into this subject in a book written just for you, Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices. Get a look at it here.
Carolyn Rosenblatt, RN, Elder Law Attorney & Dr. Mikol Davis, Gerontologist
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
In a recent issue of Investment News, a study of financial advisors looked at this question. 591 advisors were asked about their experiences with elder financial abuse. One of the surprising findings focused on those advisors who knew or suspected abuse but did not report it.
A significant percentage of those who did not report abuse gave as a reason that they did not know who to contact. What is most troubling about this finding is that not knowing who to contact is such a simple problem to solve. Historically your regulators have never required that you have the name of a trusted contact for your client in order to open a file for that person. Here at AgingInvestor.com and AgingParents.com, where elder financial abuse comes up often, we think it is extremely short-sighted to be without a trusted contact or two in every client’s file. Isn’t it obvious that you need someone to call if a client gets into danger, whether it’s elder abuse or not? No one gets out of here alive and a client can live for quite a long time, developing cognitive impairment along the way. That puts a person at much higher risk for financial abuse.
New FINRA rules will require that you make “reasonable efforts” to get a trusted contact from your clients. We assure you, reasonable efforts are a lot easier to make when your client is signing up than they are when your client is 92 and forgetful or suspicious of everyone’s motives.
From us, two professionals who have worked with countless elders and their families over the last 10 years, we have three tips for every financial professional handling a client’s finances:
You can’t ensure that your client will be competent for financial decisions forever. Be realistic! People are living longer and they may develop dementia or other cognitive impairment. Get at least two trusted contacts in every file for every client age 65 or older. Why two or more? One trusted contact might end up being the very person who is abusing your client–a family member.
Get smart about the basics of recognizing red flags of diminished capacity. We offer a simple free checklist to help you. Click on the green button here to get yours now. These signs are warnings that your client is more vulnerable to manipulation by others.
Know how to report financial elder abuse. You don’t have to be certain that abuse has occurred. You do need to know who may be doing it, when and how, in general (e.g., pushing your client into large, unexplained withdrawals). A reasonable suspicion is enough. It’s ok if you’re wrong. And you can do it anonymously. Call Adult Protective Services in the county where your client lives if you think someone is ripping off your vulnerable client.
Some advisors are worried that they’ll get sued for reporting suspected financial abuse. This is incorrect. Your regulators want you to report it. If you do what is reasonable, you are not a target. However, if you know that your impaired client is being financially abused and you do absolutely nothing, liability for failure to act is certainly possible.
by Carolyn Rosenblatt, RN, Elder Law Attorney, & Dr. Mikol Davis, Gerontologist, co-founders of AgingInvestor.com
Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
All his life Philip worked hard and was successful. He amassed wealth beyond expectations. He gave generously to all of his kids, buying them homes and bestowing money gifts. In fact giving kids money was the only way he really knew how to show he cared. Expressing love in other ways was not his thing. He and his wife lived a luxurious lifestyle: country club, exotic vacations, lavish parties, fancy cars. She ran the house and he ran the flourishing business.
It all looked great when he retired. Until his wife developed Alzheimer’s disease. Things began to fall apart when he was78, with a wife becoming increasingly dependent and in need of care. He wasn’t used to running the house. Things descended into disrepair. Then his vision got cloudy and his hearing started to go.
He expected his adult children to step up and be there. But entitled kids, used to having Dad hand them things without having to work for them, never did take much responsibility. If they needed something, Dad would just buy it for them. Now Dad needed more from them but none of them had ever learned about giving back. Communication was poor. If the conversation wasn’t about money, no one had much to talk about.
Things broke down among the family members. They were never good at talking to each other or to their parents about anything of substance. Now that the parents were both in need of help they could not rely on their adult children to work on household management, or budgeting for care or doing needed repairs.
Philip found himself depressed. He looked at what he had created, all the wealth, all the things and somehow he felt a loss. Financial success had not led to family success.
But he decided to act. He decided that this part of his life was going to be meaningful before his end and he set to work.
He gathered his adult children in his home for a meeting. He was frank with them and revealed how sad and disappointed he felt. He revealed his fears, something he had never done. He told them he expected more from them. The kids looked at each other somewhat sheepishly. They admitted that they had been off in their own worlds. They told their father how much they wanted to be closer but just didn’t know how. They asked him to be open to telling them he loved them. He asked them to express more caring by showing up and pitching in. The paid caregivers for the parents were great but they were not there all the time.
Agreements were made. Some stumbling and awkwardness happened at first. But as the next month passed, the kids finally started to show up with a schedule. And empty talk was replaced by family history, expressions of thanks and acknowledgment to each other of the changes they were making.
The last years for Philip were much better. He was able to express his feelings in ways he had never done before. Maybe age just made him not care about what people might think. It had a profound effect on his family. All of them grew closer, in spite of their differences. They learned to accept each other far better, led by Philip.
Philip passed away in peace at age 84. His story is one to share with any child who grew up in wealth and any parent who did not expect enough of the kids in a younger day. Adult children can learn to give more to parents as they age and become more vulnerable. Parents can learn to express love and affection apart from cash and objects. It’s not too late in your advanced years to change for the better.
Carolyn Rosenblatt, RN, Elder Law Attorney, & Dr. Mikol Davis, Gerontologist co-founder of AgingInvestor.com
Probably I’m not the only one who has seen the deluge of ads on TV for Medicare supplement insurance. One that really bothers me though is the bit with the actress saying she’s only in her 60s and “I’ve got a nice long life ahead.” She’s so smug and so sure she’s just fine and will stay that way.
The ad taps into the belief most people cherish, which is that impairments happen to other people and that they will just keep being fine, at any age. People say they want to live to be 100. Their imagination is that they will be perfectly capable in all ways and will not need any help at 100. That is belief, not truth.
What makes a “nice long life” anyway? No one ever wants to think about infirmity and cognitive decline. And yet, by the time we reach that nice old age of 85 at least one in three of us, and maybe even one in two will have Alzheimer’s disease. Not so nice. And oh, by the way, that supplement insurance the actress is promoting doesn’t pay for care if you need it at home long term. Neither does Medicare.
Every financial planner who has a client over age 65 needs to be considering that the “nice long life” that is part of our cultural fantasy is indeed dreaming for most people. It’s not about longevity. That we’ve probably got. It’s about good health in old age. That, we have definitely not totally figured out. As 10,000 people a day are now turning 70, it’s time to get past fantasy and consider how to make that long life a lot safer financially.
Are your client’s assets enough to pay for the care they are likely to need? If not, you, the client and her family must engage in the essential discussion about who will care for the client as she ages and how much it will likely cost. One must do the math. The cost of caring for someone with dementia at home is staggering. And the advisor needs to calculate it. This is not considering the usual figures thrown around about “the average couple at age 65 will spend “x” dollars on out of pocket medical expenses for their lifetimes”. None of those commonly used figures consider what it may cost to pay for a person with Alzheimer’s disease who lives for 7-20 years with the disease. Help from someone will be absolutely necessary for anyone with dementia.
Your portfolio review with a client at retirement is a good time to talk it over and bring up the actual, not fantasy prospects for the future. And here’s hoping you will not be influenced by stupid TV commercials about what the future may look like. Longevity can be wonderful, yes, and you can help make it financially safer for your older clients. A nice long life is certainly possible. And a long life with accessible assets to cover long term home care near the last phase of life is ideal.
Do you have older clients who seem to be doing really well physically? Some of our aging folks are remarkably sharp and we can all be lulled into a false sense of security with them. This is a heads up warning about a real situation that you can perhaps help clients avoid by a simple step. Bear in mind that your older clients may be alert but still have trouble keeping track of the occasional bill. That can lead to a true financial disaster. Here’s what happened to one person we met at AgingInvestor.com who could well be your client.
Ruth is 88, still quite independent, taking care of herself at home. She does her own shopping and cooking, drives and pays her own bills. Great at her age, right? But when it comes to memory, that’s a problem from time to time. And forgetfulness plus an unforeseen glitch caused a financial nightmare for her. Here is what happened.
Ruth has Medicare and supplemental insurance. That extra 20% the supplement pays doesn’t sound like a lot, unless you have a crisis and have to go to the hospital.
Ruth paid her bills by check each month. But sometimes her mail carrier made mistakes and put envelopes in the wrong box. That’s just what happened with Ruth’s supplemental insurance bill. She didn’t pay the bill one month because she never got it. That was the glitch. Unfortunately that is exactly the month that she had a major health crisis and had to be hospitalized. She never knew that her supplemental insurer had missed a premium payment from her until they denied payment to the hospital for the amount due after Medicare paid the hospital in full. She was very upset and called them but they brushed her off when she told them what happened. She had never paid late nor had she ever missed a payment. They didn’t care. Her bill for the amount Medicare didn’t cover was over $80,000. They flatly refused to pay it.
She tried to call again and again but got nowhere. She sent a letter but received no response. Ruth’s case is not the first time we’ve seen a situation when an older person fails to pay an insurance premium notice either because of illness, dementia, not receiving the bill or other valid reason. Some companies will allow reinstatement of coverage when the amount owed is paid in full. But Ruth’s former insurer has been horrible; clearly to get out of the large bill they would have had to pay. They’re probably happy about it but of course Ruth is distraught.
Now imagine that Ruth is your client. Most write checks by hand for paying bills, as they have done all their adult lives. Lots of people in their 80s don’t use a computer or are only able to do so with many limitations. They don’t use auto debit for paying bills automatically.
There is one thing you, the advisor, can do to prevent a disaster like Ruth’s. Work with your aging client and their family to get them set up so that payments for ongoing, recurring expenses are auto debited from a bank account. This applies most especially to insurance premiums. As long as you are overseeing the finances for these older clients, think about this simple preventive strategy you can urge them to use to protect their financial safety. Sometimes no one thinks of it. Sometimes the family is also lulled into a false sense of security because the elder is so independent in other ways. Bill paying is a vulnerability and you can think of measures to make it less so.
That medical bill coming to a client because of a simple error, forgetfulness, or glitch can be a source of extreme stress. Take the time now to talk with your client about the prospect of auto pay for all of their recurring bills. Even if they are unsure of how to set it up, a family member, a friend or money manager can offer to do this for them. It’s a small, basic measure but hugely helpful to prevent financial loss
A Lurking Danger You Need To Warn Your Clients About
There is nothing wrong with putting on a dinner or lunch for prospects while you give them a pitch about a product you like. But unfortunately, a free meal brings people out, especially older folks and they become sales targets for unscrupulous people. FINRA, in seeing how these seminars are too often a vehicle for fraud and exaggeration preying on unsuspecting elders, has issued a warning to seniors. You can be the messenger to provide a heads-up for your own clients about this.
Too many unethical people are using the setting of a free lunch to sell inappropriate investments. The annuity scams are notorious for this. And the scammers love impaired elders who are so easy to fool.
As people age, about a third of them will develop Alzheimer’s Disease. Most of the victims of this insidious disease are women. When the earliest signs of the disease emerge, research tells us that impairment of financial judgment is already underway. The predators have no trouble talking a senior who lacks the ability to see a scam coming into buying whatever they’re selling. It happens every day, not just in the free lunch seminar.
FINRA’s alert for investors about “free lunch” investment seminars is specific. Your older clients might not get that alert unless it comes through you. Here’s the gist of what FINRA wants seniors to know.
The FINRA Investor Education Foundation researched people over 40 to find out how many have been solicited with offers for a free meal seminar. 64 percent of respondents had been solicited, which means that the odds are, your clients will be among them. What the research also showed was that half of the sales materials contained claims that were apparently exaggerated, misleading or otherwise unwarranted. 13 percent of these seminars appeared to involve fraud, such as unfounded projections of returns and sales of nonexistent products
Slick and unscrupulous “advisors” and sellers have been at this for years, pitching unsuitable products. They’ve stepped up their game as the population ages. They want every target they can get. An easy way to warn your clients is to give them a one-sheet Client Update we have created for you. Get yours here or by clicking below and send it out to everyone in your book of business. Some of them are older clients and some have aging parents or grandparents who need to know about this.
You’ll look good by showing that you care about what happens to your clients and they’ll appreciate the message.
Have you ever had a stubborn older client who told you he’d never talk about his assets with anyone but you? He doesn’t think he’ll ever need help in his life and he wants to be in charge. When you suggest a family meeting to let someone else know what to do in case he ever became ill and unable to communicate, he shuts you down. This is all too common.
A consistent obstacle to communication we see in our work is the resistance of the older person to discuss finances with anyone, including their adult children or other heirs. The Great Depression led to secrecy about finances for many, as fortunes were lost sometimes overnight and once proud people became impoverished. Talking openly about money was just not done for those who grew up in this time of widespread devastating and sometimes life-ending financial losses. To this segment of our population, openly discussing money was considered rude, unseemly. Some of these Depression-era survivors remain reluctant to tell anyone in their families where their accounts are, what their assets are and what they want done with their assets in the event of incapacity.
Presumably when you have a long-term relationship with your client, she trusts you and trusts your judgment. That gives you leverage. You may know more about her finances than her family, her friends or anyone in her life. You are charged with the task of long range planning and you look ahead. In doing so, it is up to you to urge your client, gently, repeatedly and with ongoing persistence that she find someone she can trust to appoint to protect her if she has an accident, falls ill, or can’t speak for herself.
Sometimes persistence pays. The power of your relationship is a tool to persuade your client to come around. This is not a situation to ignore just because your client resists. The older she is, the more there is at risk. Anything can happen to her health at any time.
If your client resists, we encourage you to repeat your requesting a week or a month. Do it in a tactful way and paint a verbal picture for her of what would happen if she were no longer able to speak for herself. Tell her how frustrating it would be to have to refer her account to your legal department for a decision about getting a court involved if she could no longer communicate. Tell her how upset that would make you feel. Express your own concerns and make it your problem.
We hope that every single person in your book of business has an appointed trusted other for you to contact. You may well need that and it can be up to you to urge your client to take care of that most important piece of legal business, the Durable Power of Attorney, if she has not done this. Diminished capacity can sneak up on your client and you’ll need help.
It’s a new role you have with the oldest clients. They are living longer than they thought they would and with longevity come the risks of impairment in all ways.
If you’d like to take a little deeper dive into managing clients with diminished capacity, you can get a lot of expertise in a one hour online course by clicking here.
Promises to repeal Obamacare (the Affordable Care Act) abound but “replacement” still appears very murky. Many agree that repealing it is warranted (though many disagree) but few can agree on what replacement would entail. Here is a look at some of the real life effects of repeal, focused on the minimum wage worker. The articulated plans for replacement miss these workers who are most likely to lose health insurance coverage altogether when mandates are repealed.
According to the Bureau of Labor Statistics, In 2014 there were 77.2 million workers in the United States paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum. The average American worker got paid $24.57 per hour, or $850.12 per week. And averages can be deceiving. They lump together those who may be educated with those who have less education and value in the workplace. For this discussion, we focus on those who work full time, at the low end of the wage scales.
Repeal will immediately remove the employer mandate which means that employers who do not care to undertake the expense of insurance coverage for their groups of employees would simply stop covering them. Millions of workers would lose coverage, and be expected to pay for it themselves with so called “health savings accounts” or tax credits.
Those who have announced their positions on this, particularly those most likely to influence what happens after repeal believe that health savings accounts are the answer and that everyone without insurance will then be motivated to save their money and buy coverage themselves.
Reality check: the lowest income workers do not have any money to save. It is not about motivation. It is about living at the edge of poverty. These workers spend every penny of that minimum or low end wage on food, clothing and shelter and there is nothing left to pay for insurance without the existing subsidies. The myth of health savings accounts is that there is, in fact, money available to save so you can pay for insurance yourself. Repeal will mean no health insurance subsidies, which are a controversial feature of Obamacare and one of its main pillars.
Workers who only have coverage through employers who then drop coverage would return to being uninsured. When they get sick or injured, they will not receive treatment, or they will go bankrupt with medical bills they cannot pay. Essential preventive care will not be available as it is now in all insurance policies and minor problems become major health issues, some resulting in death.
Another premise of the as yet undefined replacement plan is that offering tax credits will also motivate people to buy their own insurance when subsidies and the individual mandate, now also main pillars of Obamacare, are gone. As with health savings accounts, the same incorrect assumption applies. Low wage workers do not have enough money to advance for monthly insurance premiums to attain a tax credit at year end. Simply put they can’t afford it at all and a benefit at year end does not create a higher monthly salary for them. The politicians and appointees who want to use health savings accounts and tax credits as replacements for health care insurance subsidies are the same people who vehemently oppose raising the minimum wage. The majority in power will succeed in that.
Ask any minimum wage worker: Do you have extra money left after you pay for your rent, transportation, kids’ needs and groceries each month? They will say no. Anything left buys a child a pair of shoes, not health insurance. They will take a chance on never getting sick, never being in an accident and never having a family member who has a chronic or life threatening health condition. How realistic is that?
Anyone who is working full time and is not quite poor enough to qualify for Medicaid is not in the world of the cabinet picks and advisors who created the fantasy of how it is supposed to be with tax credits and health savings accounts. Perhaps the bureaucrats cannot imagine what it is like to have zero in the bank account after the most essential costs of everyday life are paid from one’s paycheck. Amid that and the force that will keep wages low for the lowest on the wage ladder, where are we leaving so many who work every day but will have no health insurance?
Replacement needs to be thought out in terms of the millions of workers who stand to lose coverage altogether when the law that now helps them buy health insurance is repealed. Keeping coverage for those with pre-existing conditions sounds fine, if you can pay for the insurance premium that is. If you lose your coverage, it matters not whether the insurer would take you with a pre-existing condition. You have to be able to pay for coverage whether there is a pre-existing condition or not. And keeping coverage in place for one’s children until age 26 also sounds fine, but only if you, the worker are covered and can pay for the insurance yourself or you are lucky enough to get it through your employer.
The ACA also expanded Medicaid for those living at and below the poverty line. If Medicaid is shrunk, as some politicians want, so as to “cut government spending” it will destroy the only means the least fortunate have to get any coverage at all. Must we let them die in the streets? No charity in existence buys health insurance for anyone. That is the very reason why Medicaid exists–to cover the poorest among us. As flawed as Obamacare is, that is all there is for over 21 million previously uninsured people. My hope is that better solutions can be found than completely obliterating coverage for so many. Note to politicians: get with it and figure it out!
One benefit of the increasing life expectancies for Americans is that more people have bonus years for enjoying the company of their aging parents.
But all is not rosy. Those extended years also boost the odds that parents could go broke or suffer from dementia and be unable to make financial decisions for themselves.
That can leave adult children perplexed about when and whether they should step in and find out what’s happening with their parents’ money, says Carolyn Rosenblatt, a registered nurse and elder law attorney.
“Unfortunately, it’s not always easy to have those conversations,” says Rosenblatt, co-author with her husband, Dr. Mikol Davis, of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices.
“Some stubborn parents just refuse to talk about their money. No matter what their adult children say to them, they put it off, change the subject or tell their children it’s none of their business.”
Of course, many adult children aren’t in any particular hurry to broach the subject either, says Davis, a clinical psychologist and gerontologist.
“They have their own discomfort about it and procrastinate,” he says. “Then a crisis comes up and no one has any idea what the parents have or where to find important documents.”
But Rosenblatt and Davis say it’s critical that these conversations take place so that the offspring can gather information about such subjects as the parent’s income and expenses, where legal documents are kept, and what kind of medical or long-term-care insurance the parent might have.
The success of these conversations often comes down to how you approach the subject, Rosenblatt and Davis say. They offer a few tips:
End the procrastination by picking a date for the talk. Make an appointment with yourself to bring up the subject at a specific time. An opportune time to schedule this is after a birthday, a family event or a holiday where other family members are together who may share in the responsibility for the aging parents in the future.
Show respect. Tell your parents you understand and respect their reluctance to discuss their finances. You can even make the conversation about yourself rather than about them. Say that you’re concerned that if something went wrong, you would be completely lost as to how to help them.
Address their fears head-on. Let them know you understand they are worried that if they talk about their finances their independence might be taken away. You might add that you want them to maintain their independence as long as possible and you’re willing to help accomplish that, but you can’t do it without the correct information.
“Getting past an aging parent’s fear about talking about finances can be daunting,” Rosenblatt says. “But a well-planned strategy for approaching the subject will give you your best chance.”
About Carolyn Rosenblatt and Dr. Mikol Davis
Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 34 years.
Interview: Common Challenges in Helping Aging Parents
Hello everyone. Welcome to better health while aging, a podcast that gives you strategies and tips about improving the health and well-being of older adults. We discuss common health problems that affect people over age 60, the best ways to prevent and manage those problems and we also often address common concerns and dilemmas that come up with aging parents and other older loved ones, like what to do if you’re worried about falls or safety or memory or even the quality of a seniors healthcare.
I’m your host Dr. Leslie Kernisan. I’m a practicing geriatrician, so that means I’m a medical doctor specialized in geriatrics, which is the art and science of modifying healthcare so that it works better for older people, and for their families.
Today’s episode features a special guest and we are going to be talking about common challenges related to aging parents. My guest is Carolyn Rosenblatt. She is an attorney and a registered nurse, and for the past several years she and her husband Dr. Mikol Davis, who is a geriatric psychologist, have specialized in helping families resolve difficult issues related to older parents. They have a website at AgingParents.com.
Carolyn is the author of “The Family Guide to Aging Parents” and several other books about assisting older adults with legal, financial, and life issues. She also write a column about aging for Forbes.com.
I have read many of Carolyn’s Forbes columns over the past few years and also read her book recently as I was writing one of my own articles about advance planning for legal and financial issues. So I’m thrilled that she was able to join me today to share some of her insights on how to manage some of the common challenges and dilemmas that families often struggle with.
Carolyn, welcome to the show.
Questions:
Tell us about your practice and how did you come to specialize in families and aging parents?
What are the most common types of problems that people ask you to help them with?
Some common scenarios we can discuss:
People are sometimes concerned that their parent is losing mental abilities, or becoming “incompetent.” They also often complain that their parent is refusing to talk about the issues and refusing to go see a doctor. What are some of your suggestions to help families resolve this?
People worried about how their parents are spending money, and/or worried that someone else is influencing the spending (e.g. a sibling)
People worried about their parents driving
People who want their parents to plan for decline in the future but the parents refuse or avoid the subject
How can older adults and their adult children plan ahead to avoid many of these difficult situations? Can you share some favorite resources that are effective in helping people through this?
For families that have set up springing powers of attorney, there is often a requirement that a doctor or other clinician say the older person no longer has capacity to manage finances or whatever power is in question. But families often say they can’t get the person to the doctor/psychologist to obtain this assessment. Suggestions?
There is really a lot that families could and should do to plan ahead. If people are feeling really limited in time and energy, what do you think are the most important or high-value things to do, when it comes to older parents who are doing ok now.
Another angle on this: what are the things that people end up regretting not doing the most often?
You’ve written a lot about preventing financial abuse of older adults. What are some useful steps you recommend to prevent this from happening, or from causing serious financial losses?
You have a chapter on helping older parents from a distance, and you write about how you and your husband eventually hired a care manager, in order to have someone close to your mother-in-law. What do you recommend for people who feel they can’t afford to hire a care manager?
How can families deal with declining abilities, dementia, and physical dependency if there isn’t family to provide care or money to hire someone?
How have you and your husband planned for your own future? (We can skip this if it’s too personal.)
At the end I will tell people they can learn more about you and your special consultation practice at AgingParents.com.
Proving Value to Retired Clients: Creating a Financial Checklist
Many of us in this society have a very negative image about aging in general. We don’t want to be “old”. It is fueled by advertising on TV, movies, print media and other outlets with a consistent message: aging is bad, being younger and turning back the clock is good. We are a work ethic driven culture. When we are older and no longer “productive” we are generally seen as less valuable.
Then there is the fear and denial about dying and death. Our culture has been called the only one in the world that thinks of death as something optional. Note how we talk about it to family–“in case anything ever happens to me… Besides it being a fantasy that maybe something” won’t happen to us, it keeps us from planning, from preparing our loved ones and from being responsible about our older years, possible declining health and the burden ignoring these things can put on our families. Reaching retirement age is a time to do planning about more than money.
Financial advisors are in the planning business. You look ahead, analyze, budget and calculate. But your clients may not be on the same page in your view of the future. They are busy being in denial that they may ever get ill and die. You can help them. In doing so, it may also make your job of talking about such issues as long term care, budgeting and spending easier.
Most people do not want to burden their loved ones. Most of them do not want to trouble adult children unnecessarily as they age. That is your best selling point for bringing up the personal matters. These include how every senior and every retiree needs to plan for things in their own lives that go beyond how much money they’ve saved and how it will be spent having a great retirement.
Here at AgingInvestor.com we see the messes people leave behind when they nurture the Great American Fantasy that losing independence won’t happen to them and that they will live happily to age 100 and die peacefully in their sleep. Family members can spend years cleaning up the disaster their older loved ones leave because of failure to plan and take care of business. It is truly not fair to anyone. It leads to anger, resentment, family conflicts and sometimes to loss of wealth through ignorance. We’ve heard it and seen it countless times. We put a checklist together to help people avoid these disasters created by the fantasy.
What Can You Do About It?
You can give your clients this checklist next time you sit with them and review the portfolio. You can gently urge them to do what the list says is needed. We’ve broken down the essentials into 10 points, a “to do” list if you will. You can encourage them to take care of the items on the list, if they haven’t already. In general, the to do list includes updating the estate plan, having critical documents in the right hands, providing necessary financial, computer and account information to trusted family and having a family meeting to educate one’s heirs about the older person’s affairs. This is how your client gets a family ready. This is how they avoid unduly burdening anyone. This is how they free their loved ones from distress and unnecessary work when they have to take action as an aging parent declines and passes away.
Some of your clients will brush off your suggestion. They love that Great American Fantasy and aren’t about to give it up. Others will thank you as they have thanked us and will go forward. Their families will be forever grateful. You’ll look like the caring, smart and responsible planner that you are.
Get your free Ebook and the Financial & Personal Checklist For Smart Retirees, click HERE.
In all the proposed rules by Finra and the SEC to address financial exploitation of seniors, advisors are urged to report suspected abuse to the local Adult Protective Services or to call the police. Unfortunately that is not always a solution. There seems to be a lack of clarity about how things work. Here’s a typical scenario that illustrates an issue.
Myra is 87 and her daughter, Lexie has been taking advantage of her for years. Myra feels sorry for her daughter because she can’t seem to hold a job. Never mind she has a drug habit. Myra has means and she often gives Lexie “loans” that are never repaid.
Lexie gets a power of attorney from Myra, goes with Myra to her financial advisor and tells the advisor that Myra needs $80,000 for a trip they are going to take. Myra is disabled and never travels. The advisor knows this. Advisor decides after seeing several of these demands for withdrawing Myra’s funds under suspicious circumstances that Lexie is abusing Myra. The total amount withdrawn at Myra’s request is over $150,000 in six months, which is highly unusual.
Advisor calls the police. They refer her to Adult Protective Services. APS takes a report over the phone, asks questions and then asks Advisor to fill out a report form. She fills it out and reports the recent questionable $80K demand and withdrawal and she lists the total taken of $150K. She puts Lexie’s name on it as the person suspected of financially abusing Myra.
APS sends a social worker out to investigate the complaint and to visit Myra at home. Myra finds the worker to be very nice and they chat. “Has your daughter ever pressured you to give her money?” the worker asks. “No”, says Myra. “Do you remember giving her gifts or loans totaling $150K this year?” the worker asks. “I don’t think I did that” Myra says. The worker asks if she is in the habit of giving money gifts to Lexie and Myra says yes, that Lexie is her daughter and she needs some help sometimes. The worker concludes that giving money to Lexie is what Myra wants and the case does not go any further. No one has tested Myra to see if she is competent to understand the consequences of giving her assets to Lexie, particularly since she has two other adult children.
In this case the facts are not clear enough to prove that a crime was committed. APS will not recommend that Lexie be prosecuted because even though giving away money is not in Myra’s best interests, she is assumed to be competent to do so. In this case APS is not solving any problem and takes no further action. If Myra did not want the funds to be given to Lexie it would be different and elder abuse could be proven perhaps. As is there is too much doubt about Myra agreeing to be taken advantage of by Lexie, no prosecutor could meet its burden of proof.
The Other Option
Lexie’s other two siblings were not initially aware of the abuse by Lexie. Their potential inheritance is directly affected by their sister’s actions and when they find out they call APS also. The case is closed and they get nowhere. They are furious.
They consider another option. If there is no crime here that can be proven, there may be a civil case. They contact an attorney who handles civil cases of elder financial abuse. The attorney does an investigation and finds out that Lexie has bought a condo with the money taken from Myra. The attorney successfully proves that Myra was duped by Lexie and the matter is settled by Lexie’s attorney agreeing to sell the condo and give the proceeds back to a fund set up for Myra in case she needs more cash as she ages. And the settlement agreement says that Lexie will inherit no part of the fund. Further, the power of attorney Lexie got is torn up and Myra appoints a more responsible agent, another daughter who now oversees all of Myra’s finances.
With a misunderstanding of how law enforcement works, there is a belief that all one must do is report to APS and somehow, financial abuse will be stopped. But when APS finds insufficient proof, or a wiling victim like Myra, they do not intervene. They are essentially an arm of law enforcement. A civil case is outside their sphere and a civil attorney must be consulted to explore whether one can pursue that possible way of recovering an elder’s assets that have been wrongfully taken.
The Takeaway
The important thing to know here is that APS is limited in what it can do. A criminal case of any kind has to be proven “beyond a reasonable doubt.” Any advisor who wants to keep senior clients safer needs to understand that a willing victim will pretty well destroy a criminal case of abuse. A civil case is a possibility as long as there is an asset (in Lexie’s case, a condo) to get. One should know a competent elder abuse attorney to consult and find out if your client has that choice in taking legal action of if her heirs do.
By Carolyn Rosenblatt, RN, Elder law attorney, AgingInvestor.com
Two Things Professionals Can Do About Elder Financial Abuse
It’s vicious and pervasive. It’s growing. It has been called “the crime of the century”. Elder financial abuse, according to a study by True Link Financial, costs seniors in the U.S. over $36B a year. But can financial professionals do anything about it? We say definitely yes.
Most of us have encountered this kind of opportunistic crime at some point, among family, neighbors or friends. When we at AgingInvestor.compresent to groups of professionals we ask how many have had witnessed this kind of abuse with anyone known to them. Almost every hand goes up. The question is, what can you do about it?
Many professionals are either hesitant to get involved because they think privacy concerns should stop them, or they want to take action but are unsure about what to do. Let’s clear away those concerns now.
First, remember that when your client gets ripped off and cash is drained out of the account you manage, you are losing fees for those AUM. If that isn’t incentive enough to be involved note that NASAA has already developed model rules which will require that you report abuse to authorities. Those are likely to become mandates soon enough.
Let’s look at two basic steps any professional can take now to improve your response and protect your clients from financial abuse.
Get third party contacts on file
One, you need to get from your retirement-age clients the names of several trusted others whom you can call in the event that you see red flags that abuse could be going on. Remember that family members are the most frequent abusers of aging folks. Perhaps that favorite one, Sonny Boy is taking advantage of a vulnerable parent or other relative. Be sure one of the contacts you get from your clients is not a family member, but a trusted friend, colleague or professional. Age makes all of us more vulnerable to financial manipulation for many reasons. Next time you review an older client’s portfolio, get this necessary information about whom to call if you get concerned and keep it on record.
Get permission from your client to call the third parties under certain circumstances
Two, you need not consider privacy rules a barrier if you have your client’s permission to contact the designated third parties he has identified. A legally sufficient privacy document will help you. This is an area where both legal and compliance departments should assist you to get the right paperwork in order. At AgingInvestor.com, we developed just such a model document, a product we offer to overcome the confidentiality barrier to taking action. It’s part of a senior-specific policy. And you can do it in-house on your own too with legal input. Get one done for every aging client. It resolves the question of giving private information to the designated third party. You will have the ok to act when you need to.
Caution: we do not recommend that you use an informal letter to for your client to give up the right to privacy. Consider that in our society, we use things like a durable power of attorney to give up the right to solely manage one’s finances, and an advance healthcare directive to give up the right to make end of life or care decisions alone. We don’t use mere letters for these things. You need papers that are standardized, formal and that will stand up to scrutiny should anyone question them.
Surely you do not want predators to take advantage of your clients, particularly when they suffer from any cognitive decline. That increases their vulnerability. And the integrity of their portfolios is enhanced by your own vigilance over them as they get older.
The Emotional Impact of Financial Elder Abuse
When older persons are deceived financially by hose they trust the most, the emotional effects can be devastating. The problem of financial elder abuse costs our older population over $36 billion per year in the U.S. alone. The reasons for this rampant problem some call “the crime of the century” are complex. Many victims cognitively impaired in some way, and are therefore subject to the undue influence of greedy relatives, caregivers, professionals, or criminal predators who strategically seek out older victims. However, not all seniors who fall victim to financial abuse are affected by cognitive decline. Some competent people are seduced by unscrupulous sales pitches promising big rewards. Some are cheated by the Bernie Madoffs of the world and their cohorts who take advantage of seniors who are worried about having enough money. These victims see the pitch or offer as a way to alleviate their money insecurity and they give up their cash to those who want nothing more than to take it and run. Sometimes, the senior may want to get something for nothing or get a “great deal’ with very little perceived risk.
Abusers are not always shady characters or unscrupulous family members. Sometimes they are legitimate organizations that simply find an opportunity to take advantage of someone with whom they already have a relationship. Using a relationship of trust to manipulate an older adult is called undue influence. The laws protecting them from being victimized by undue influence vary considerably from state to state, with some defining it so vaguely that enforcement is difficult. However, whether the law is used to convict abusers of this crime or not, the effect on an aging person is devastating. It is hard enough to realize that one has been duped by a stranger. When one understands that the manipulator is a trusted relative, friend, an organization in which a person truly believes or contributes to, the pain is even worse.
Wanda’s Case
Wanda was eighty-nine years old at the time her daughter, Janis, contacted an attorney. Janis reported that Wanda had been a member of her large church all her life and had been an active participant in the congregation. She had always made modest contributions to the church and trusted all of the other members. But over time, Wanda’s memory began to decline and she got confused easily.The church began a fundraising campaign for new construction. Wanda was asked for a donation, which she gave. Then another request came and Wanda once again complied. Wanda gave larger and larger donations to the church over the next year, with the checks totaling over $100, 000. Janis grew increasingly alarmed, because her mother clearly was in need of help. Wanda was found lost and wandering near the church after one day. The church itself had recorded the incident and a church worker had taken Wanda home. Janis was concerned that Wanda would run out of?money. She was physically ok, but her mental condition was becoming a serious enough problem that Janis believed she should no longer live alone. And Wanda trusted the church, to the point that she did not believe that anyone there would do anything wrong. This was a case of the church using its position of influence over an impaired member to elicit larger and larger financial contributions from her. They took advantage of an older adult who had become lost and confused after church, and they knew it. Wanda could not perceive that she needed care, which was going to be expensive, and that she could all her reserves by these overly generous donations. She was not able to act in her own best interests. She ?believed that she could not possibly run out of money. When her daughter, Janis, tried to explain that she had to stop giving to the building fund, Wanda was incredulous. She simply could not process the reality that she was going to lose all her savings if she kept up the contributions.? She became angry with her daughter for even suggesting that her actions were not right and that the church was out of line doing what it did.
Wanda’s emotional response to the abuse was to be in denial about it. She likely not able to fully process what had happened and felt that Janis was being disloyal to the church. The matter did get resolved. When the church was contacted to meet and discuss the pattern of solicitations they had sent to Wanda and their record of her being lost after church services, they immediately contacted an attorney who put a stop to their actions. Janis was able to watch over Wanda after that and she did obtain help for her. Wanda’s anger at Janis was an unfortunate effect of stopping the abuse. Wanda would likely have been angry at the church had she been able to perceive that she was being manipulated. However, she was cognitively impaired and did not see?the full picture.
The Emotional Impact of Abuse
Undue influence is not the only means of taking advantage of seniors. Any kind of elder abuse can be devastating. Denial is common after older victims discover financial abuse. When a scam is underway, they tend to keep up hope and continue engaging with the scammer. Despite warnings from family, friends, and advice from knowledgeable others, they continue to believe that the big payoff is coming. Or they are unable to embrace that they have made a mistake and trusted an untrustworthy person. Sometimes, even after the evidence of fraud mounts, the victim continues to give money to the predator. They have put their trust in someone whom they very much want to believe was trustworthy. When the payoff does not come, or nothing that was promised materializes, they eventually realize they were duped. The effect is sometimes intense shame and embarrassment. Living with this shame often leads to depression.
Suicides resulting from financial abuse have been reported. Some never recover emotionally from the feeling of horror that they were “so dumb” as to fall for a scam that in retrospect looks a lot more obvious. It damages a person’s sense of self, and sense of being able to trust one’s own judgment. It can go to the core of a person’s self-esteem, leaving the victim with a belief that he can no longer trust himself with anything financial. When a senior loses most or all of her assets and is left impoverished, it becomes a constant reminder of the shame of being duped by someone else. Losing a home can force the person to live somewhere he does not choose to be. That can be with relatives if available, but it can also land him in a Medicaid bed in a nursing home where few would ever want to live out their last years.
Prevention Strategies
No one is totally immune from fraud and financial abuse. Anyone can be victimized. Many a sad tale is told by an adult child of a victimized aging parent that “I trusted my father and didn’t want to question him.” Or, “I thought since my mom was a CPA, she would never fall for that.” Part of the problem is the perception adult children and even some professionals have that certain folks are never going to be abused financially because they are smart, or experienced with money matters. It is simply not true that education or experience protects everyone. Working with older adults puts professionals in a position to be vigilant, to educate about the risks of abuse out there, and mainly to pay attention.
Using Resources to Help Victimized Clients
While the criminal justice system prosecutes the relatively small number of abusers who are reported to authorities, it does not do much to help the victims of abuse. Money stolen from older people is often long gone by the time a predator is brought to justice. When a criminal is prosecuted successfully, the court will order that he make restitution of stolen monies to the victim, but enforcement of restitution orders can be problematic.
What is almost entirely lacking is any resource to help a victim of financial abuse manage the emotional effects of the crime. We simply do not fund this in our justice system. If victimized seniors wish to get emotional support or mental health help to recover from the impact of financial abuse, they would have to do so on their own. The cost is clearly a barrier, though Medicare does provide for psychological services. However, the benefit has limitations. A diagnosis is required for the provider to get payment. And many people attach a stigma to getting mental health help, which is an unfortunate perception that stops some from obtaining the needed psychological support for recovering. If there is a civil case of elder abuse with a successful outcome, and financial damages are actually awarded to the victim as a result, the award may include expenses for psychological treatment for the victim. Therapy is one means a victimized person can learn to cope with the emotional distress, shame, and? humiliation of being taken advantage of by any financial abuser. There is little doubt that those who receive supportive services after victimization cope better and have a better chance of healing from the trauma.
Professionals’ Roles with Abuse Victims
Professionals who work with aging adults in any capacity will likely encounter someone who has been victimized or is in the process of being taken advantage of by another. It is important to know their own community resources to provide information to anyone who may need help. Understand how difficult it must be for the person who has been victimized, and offer a respectful referral to a local resource. Local mental health providers can be found through the American Psychological Association, Psychologist Locator, community service agencies such as Jewish Family Service Agency (serving people of all faiths), the Alzheimer’s Association, or senior centers throughout the U.S. Most offer information and referral to local providers in the senior’s county.
Warning Signs
When suspecting financial elder abuse, those working with them should be aware of these warning signs:
1. The presence of a new “friend” in a client’s life who has an inordinate interest in the older person’s accounts or assets, and who gains access to any of them.
2. Sudden change in a Durable Power of Attorney document.
3. Isolation of the older adult from friends, family, and others close to them.
4. Large gifts to strangers or people they don’t know well.
5. Complaints about having reached maximums on credit cards when this has never happened before.
6. Frequent email or telephone contact with any stranger who establishes a relationship with the senior that seems addictive.
With the effort of those in the community surrounding older adults, we can all take steps to intervene and prevent or stop abuse. If something seems odd to you, speak up, ask questions, step in where you can. You just might be the key to keeping a senior financially safe. And if you learn of abuse in the course of doing business with a senior client, a kindly approach in offering emotional health resources lifts both you and the victim.
BY CAROLYN ROSENBLATT, RN, ELDER LAW ATTORNEY
Carolyn Rosenblatt has over forty-five years of experience in her combined professions of nursing and legal practice. She is co-founder of AgingParents.com, a resource for families, and Aginglnvestor.com, offering educational training and products. She can be contacted at (415) 459-0413, carolyn@aginginvestor.com.
REFERENCES
Journal of Accountancy. 2015. “Emotional harm of elder financial abuse outweighs its financial damage.” www.journalofaccountancy.com/news/2015/jun/elderfinancial-abuse-201512535.html. Accessed January 2016.
MetLife Study on Elder Abuse, www.metlife.com/assets/cao/mmi/publications/studies/2011/mmi-elder-financial-abuse.pdf. Accessed January 2016.
Rosenblatt, Carolyn. 2015. “Protecting Our Aging Parents from Abuse.” In The Family Guide to Aging Parents: Answers to Your Legal, Financial and Healthcare Questions. Sanger, CA: Familius, 284-296., 2015.
“Common Elder Specific Issues.” In Working With Aging Clients: A Guide for Legal, Business and Financial Professionals. Chicago: American Bar Association, 71-76.
This article was originally published in the CSA JOURNAL 66 / VOL. 2, 2016 / SOCIETY OF CERTIFIED SENIOR ADVISORS / WWW.CSA.US
Revise it with your name or firm name and you’ll look good by showing that you do care about their financial safety. You’ll never regret doing your part to thwart thieves and prevent financial elder abuse.
