“The only rock I know that stays steady, the only institution I know that works is the family." -Lee Iacocca
How often do we hear stories about an elder loved one who falls, becomes ill and is suddenly in need of care? Out of the blue, they and their families face a decision with enormous ramifications: where are they going to live now to get the care they need, and how are they going to afford it?
In other words: “Now what?”
Don’t let your clients face the “now what?” scenario. Help your aging clients, or clients with aging loved ones, understand the choices they have and plan for the future before it becomes an emergency; before fate and circumstances force the decision.
Working in collaboration with The Center for Innovative Care in Aging at the Johns Hopkins University School of Nursing, we focused on the most common housing options available for older adults and their families and some of the considerations that may guide a seniors’ housing selection.1
55+ Independent Living Communities
Independent living communities are planned residential communities that offer services and amenities which promote an active, healthy lifestyle. Independent living is not an option for someone who cannot care for him or herself. These communities offer services and a wide range of amenities such as fitness centers, pools, tennis courts, golf courses, dining and a wide variety of social clubs. Residences may be single family homes, villas, town homes, or condominiums. Typically, residents will purchase their homes and pay taxes and Home Owner’s Association (HOA) fees. People tend to buy into these communities for the active lifestyle, social interaction and freedom from external home maintenance. If desired or needed, residents can hire in-home help for light housework, meal preparation, shopping, laundry services and transportation. There is no medical care associated with 55+ Independent Living Communities, but it can be brought in should someone’s health deteriorate.
Continuing Care Retirement Communities (CCRCs)
CCRCs are a type of retirement community that offers a continuum of care, from independent living (such as single family homes, town homes, villas or condominiums) to assisted living, skilled nursing care, and potentially rehabilitation, all on one campus. This option provides lifetime housing and transition to increased tiers of care and service as health needs change. CCRCs are the most comprehensive option available because they cover all levels of care, but, as such, they are also the most expensive. Typically, there is an equity buy-in (entrance fee) for these communities, as well as substantial monthly fees. Generally, there is some sort of equity refund to the estate. Many of these communities have extensive amenities and services available to residents to fulfill their social, recreational, and maintenance needs, as well as their healthcare needs.
Assisted Living Facilities
Assisted living facilities are designed for individuals who want to be as independent as possible and need help with some Activities of Daily Living (ADLs). ADLs include bathing, dressing, eating, toileting, transferring, and continence. These facilities provide social and community interaction and will monitor residents’ activities to ensure health, safety and well-being. While there is a 24-hour supervision, there is not 24-hour skilled medical care. Most assisted living facilities offer either studio or one-bedroom apartments which include a bedroom, bathroom, living room and kitchenette (no stove). In addition, they have dining facilities where residents can take their meals. Typically, assisted living units are rentals and residents tend to stay until the end of a life. However, if deteriorating health necessitates, residents may need to move to a skilled nursing home.
Skilled Nursing Facilities
These facilities, also known as nursing homes, provide the highest level of care with
24-hour skilled medical care for residents with serious medical conditions and/or advanced dementia. Each patient’s care is supervised by a licensed physician in combination with skilled nurses, physical therapists, nutritionists, etc. They also provide patients with assistance with the Activities of Daily Living (ADLs) such as bathing, dressing, eating, toileting, transferring and continence. In short, skilled nursing offers the highest level of supervision for ongoing care for the rest of the patient’s life.
Anticipating future housing needs should become a component of your clients’ long-term retirement planning process. As a trusted advisor, you can play a vital role by incorporating housing into your financial planning conversations and providing educational tools and resources on the various options available. Planning now can help your clients make cost-effective decisions that accomplish their objectives without forfeiting their own or their loved one’s long-term economic security. Build housing into your financial planning discussions and help your clients avoid, “Now what?”
To obtain a copy of the Legg Mason brochure, Aging and Its Financial Implications: Planning for Housing (which includes a home safety assessment checklist and additional resources for aging in place), please visit http://www.myleggmason.com (and quickly register if you are not already a user). Look for the aging program content under Business Building> Business Development> Wealth Management.
About the Author
Kathleen Pritchard has over 28 years of experience in the financial services industry, and has spent the last 8 years providing advisors with innovative ways to look at their practice and client base. Kathleen is a dynamic, engaging and passionate speaker and coach and is committed to ensuring her ideas lead advisors to further distinction in the marketplace. She is a National Spokesperson for Legg Mason serving the wirehouse, regional, independent, bank and insurance channels. She represents Legg Mason at industry conferences and events across the country. Please look for her at the next industry event you attend.
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