We have a big and growing problem in this country. I won’t repeat the same statistics you have no-doubt seen, but the fact is that the older adult population will dramatically increase in size over the next couple of decades as the Baby Boomers continue to reach retirement age and beyond, with the oldest segment of the population (age 85+) growing the most.

A senior citizen boom

Not only will the older adult demographic grow in size, but since they will be living longer than previous generations, many will require more assistance and support with chronic health isues (i.e., long-term care). The problem is that we are not prepared as a country for this scenario and the result could be devastating for many seniors and their families.

Here are just a few of the reasons why:

  • The government provides little financial help with long-term care unless someone is practically destitute, which is often the end result for those who were previously well-off financially but who end up plowing through their assets for expensive long-term care services and end-of-life care. Even when government financial support is available, typically in the form of Medicaid, it takes a Ph.D. in the practice of filling out forms to obtain it.
  • The home care services industry is vastly under-equipped in size and skill. (I recommend reading “The Age of Dignity” by Ai-Jen Poo to learn more about this topic.)
  • The family caregiver ratio is projected to fall dramatically, which means there will be fewer adult children available to provide care for aging loved ones. Even when adult children are available, they will be more strained–emotionally, physically, and financially–than previous generations to provide care due to the fact that many households today are dual-income and are having children of their own at a later age. (Not to mention that adult children are typically not trained to be caregivers.) Related: 3 Reasons Why Aging in Place May Not Be Cheaper
  • The long-term care insurance (LTCi) industry faces significant headwinds due to mispricing of policies resulting in substantial premium increases for policyholders. Many carriers have exited the LTCi business completely. Yet, even if the industry overcomes the obstacles it faces today, purchasing coverage may not be financially feasible, or even possible from an underwriting standpoint, for those who will likely require care in the next 5-10 years. For those who already own coverage, this alone does not constitute a plan. LTC insurance is only part of a much bigger plan that should address not only cost of care but also access to care.
  • Most families today do a poor job of planning ahead. Instead, they wait until a significant health event occurs, at which point they shift into crisis management mode and scramble under duress to find whatever options are available. This leaves little time for the appropriate research and vetting. The stress related to this exercise often does irreparable harm to family relationships…particularly between siblings.

Financial guidance for seniors

So, what does this mean for you as a financial advisor? If you have clients who are in their mid-retirement years, it means opportunity. At a time when the public trust and perceived need for financial advisors is low, this looming problem presents a tremendous opportunity to show how much you care about a client’s well-being and not just their money. And of course, this sort of consultative relationship may very-well lead to increased planning opportunities and a stronger connection to seniors’ heirs, too. Families often do not know who to turn to for guidance in this area. They are confused about the options, to say the least. You can be the catalyst for helping families talk about this important topic; helping them avoid difficult, and often costly, situations in the future.

In my conversations with financial advisors about this, I have heard comments such as, “I don’t talk much about this with my clients because they don’t bring it up.” This is exactly why you should talk about it. If you don’t, there may not be anyone else who does…until it is too late.

Avoid using phrases with a negative connotation

Effectively engaging clients on this topic requires a delicate and tactful approach. Using phrases with highly negative connotations such as “assisted living,” “long-term care,” and “nursing home” may shut the conversation down before it ever gets started, thereby preventing you from learning what is most important to your client.To help you get the ball rolling on touchy client conversations about preparing for the unknowns of aging, here are a few opening questions to consider using:

“Mr. and Mrs. Client, what concerns do you have about your future as it relates to your lifestyle, health, and finances?” 

This is a broad, open-ended question that could elicit a number of responses. Typical answers are: healthcare needs, being a burden to our children, ongoing home maintenance, loneliness, not having a purpose, running out of money, leaving an inheritance, etc. Be sure to follow up with questions such as, “Why is that a concern to you?” or “Have you talked with your adult children or other close relatives about your concerns? Why or why not?”

“Mr. and Mrs. Client, at this point in your life, what does peace of mind really mean to you?”

Answers to this question may be a variation on the previous answers but from a slightly different perspective–one which is to avoid those things that were previously named as concerns. For the sake of deeper conversation, consider following up with a question about how the meaning of peace of mind for them today is different than what it may have been 20 or 30 years ago.

“Mr. and Mrs. Client, you’ve been in your home for a long time. I know you must have fond memories of all the great times in that house over the years. Is it your plan to always stay in your home?”

One of the most important decisions a retiree can make about their future is where they will live out their retirement years. While most people prefer to stay in their home as long as possible, this is not always a practical choice, even if they own long-term care insurance. Choosing to remain in the home is a decision in and of itself. If this is your client’s desire, it is important that they plan for the implications of this decision, including but not limited to, possible home modifications, on-going interior and exterior maintenance, impact of health concerns that could make this less feasible over time, family roles and availability, possible transportation limitations, and, of course, coordination and management of care services if eventually required.

Alternatively, some of your clients may desire or be better suited for some type of retirement community–perhaps a continuing care retirement community (CCRC) that makes available on-site care if ever needed. In this case, you can help your client sort through the myriad of options, contract details, and financial implications to help them make a decision that is best for their unique situation.

Resources for you and your clients

For clients who are considering a continuing care retirement community (CCRC), My LifeSite offers numerous resources that financial advisors can use to help guide their clients through the decision process, including in-depth reports on hundreds of CCRCs across the country. Learn more about how My LifeSite can help you and your clients make informed choices about their senior living options.

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