We went through life thinking we would not get there, or if we did, we could worry about it later. In many cases, we either ignored or failed to plan and now we are there. Often, we arrived with false assumptions.
We planned as if we would not live past 85, but thanks to modern medicine, many of us will. A recent study, supported by the American Insurance Group, found that, on average, a 75-year-old American woman with no chronic conditions will live 17.3 additional years (that’s to more than 92 years old). For men, it is nearly 12 years, stretching to 87. For couples at age 65, the odds are 49 percent that one of them will live past the age of 90.
Believing that seniors have an early demise can cause people to make poor decisions around how to save and claim their Social Security benefits. Any seniors believe that when they retire, they should shift to more conservative investments like CD’s and the like, but if they live longer lives and don’t have investments that will keep up with inflation.
Perhaps the biggest false assumption is that when you reach age 65 your healthcare is free. Not so! Remember, you still have to pay for Part B and there are co-pays and coinsurance. Budgeting for your retirement health care out-of-pocket costs is imperative.
One of the greatest gaps in senior health care is the cost of long-term care and home health care. Medicare will cover little, if any of those costs, usually only for a short period after discharge from a hospital.
One of the greatest financial challenges is the forced bankruptcy of a healthy spouse if the other spouse goes on Medicaid. Joint assets must be spent down to nearly nothing in order to qualify, leaving the healthy and surviving spouse in financial straits. Seniors should be prepared for Medicaid bankruptcy. Seniors should meet with competent estate planning lawyers and tax counsel to know how to shelter assets where possible.
Now that seniors will live longer, they must plan for their habitation. Where will you live at 85-90? Your needs will be different, and your mobility lessened. Can you still climb upstairs to your bedroom? Plan while you are younger so you will be prepared when you are older.
Senior planning does not stop with retirement. In many events, it is just beginning and is a senior life continuing process.
John Grant, a former state representative and state senator, an estate planning attorney, and a member of the National Senior Citizen Hall of Fame, has spent much of his career working on behalf of seniors. John is continuing the advocacy work by heading a new venture called Seniors Across America to continue speaking up for our elderly population.