Richard Eisenberg, (money and work editor) over at Next Avenue wrote a very interesting piece on Aging in America, A Report: On Money, Work and Finding Purpose. He's just returned from 2 conferences, namely the American Society on Aging (ASA) Conference and the What’s Next Boomer Business Summit Conference held during the 3rd week in March.
Eisenberg's post focused on a lot of things but 2 main themes stuck out. The first was the cost of caregiving. Most young folks have no idea how big this issue is, but if you talk to those taking care of aging parents, it's always on their minds. The second concern was retirement planning. Sometimes the two go hand-in-hand. Let's touch on each topic below.
The Cost of Caregiving
Many experts are already discussing the financial difficulties of caring for people with dementia related illnesses like Alzheimer's. This along has the potential to bankrupt Medicaid as we know it.
Healthcare expenses for Alzheimer’s and other dementias cost Medicare triple what it costs the program for someone without the disease — $23,487 a year compared to $7,223. These expenses are expected to continue spiraling upward as the population ages. – ANA VECIANA-SUAREZ, Miami Herald, 3/9/2017
When it comes to caregiving and finances, Eisenberg noted the following observations discussed at the aging conferences:
- Out of pocket costs for caregiving are going up. Eisenberg notes that a recent AARP study found that family caregivers spend $6,954, up from a few years ago.
- Don't quit your day job. If you're caregiving for an aging family member, quitting your job might seem rationale. But try to hold onto your day job as long as you can. That income is likely to provide a safety blanket for you and your loved one(s). Additionally, it's hard to re-enter the workforce after an extended absence, especially for older adults.
- Men tend to pay for services, women tend to it themselves. There must be a better balance between the two.
- Personal Care Agreements are a good idea. This is a binding contract between individuals (typically siblings) that helps define who's supposed to do what.
We're constantly bombarded with the notion that Americans aren't saving enough for retirement. According to Bankrate, 1 in 6 people say they aren't saving because they “haven't gotten around to it”. That's just not gonna cut it… In addition to that startling statistic, 2 in 5 say they aren't saving more because they “have a lot of expenses.”
Here's what Eisenberg had to say about retirement planning conversations at the ASA meetings:
- Better budget for a Medigap policy because they are expensive. Depending on where you live and what kind of coverage you need, these Medigap policies could run anywhere from $1,550 – $4,000 annually. Yikes!
- Consider a reverse mortgage. Reform of the federally insured Home Equity Conversion Mortgage program has provided more protections for consumers and made it easier for those 62+ to obtain a reverse mortgage.
Reverse mortgages allow older homeowners to convert the equity in their primary residence into a liquid, usable resource. Borrowers must be 62 or older and must either own their home outright or use the proceeds of the reverse mortgage to pay off the balance of their existing mortgage. They retain ownership of the home and must continue to maintain it and pay their property taxes and homeowner's insurance. – Mary Beth Franklin, Investment News, 6/12/16
If you want to read more of Richard Eisenberg's posts at Next Avenue click —> HERE.