Yet, no matter how good-natured everyone is, sacrifices are inevitable. [One generation] wanted a washer and dryer on the main living level for their parents’ easy access, but that required making the living space smaller. So laundry facilities went downstairs.... “Melding design, finance and emotion is an art, not a science,” said the president of one design firm interviewed for the article. "Nevertheless, 'if you’re creative, you’re willing and you have good relationships, you can make it happen. We’re average Joes and we did it,'" said another generation while a member of the third generation offered that “It’s not like some fairy tale where everyone is always happy and gets their way, but the benefits are better than the costs.”
Wednesday, September 12, 2018
Last week, students in my Elder Law class at Dickinson Law had the benefit of a fascinating, detailed presentation by Pennsylvania's Deputy Commissioner of Insurance Joseph DiMemo about the history of insolvency for Penn Treaty American Network and American Independent Insurance Company as sellers of long-term care insurance policies. In 2009, the State took the reins as the receiver for the two companies' administration of more than 126,000 policies sold nationwide.
From the history, I would summarize reasons for failure of long term care insurance in its "traditional" form as including the following:
- Selling products with a promise or at least a strong expectation of level premiums, especially in the early years of the industry. While contract language permitted companies to seek rate increases, the companies often delayed asking for increases or were frustrated by states that refused to grant requested increases;
- Assumptions made about "lapse" rates for policyholders that proved to be inaccurate;
- Assumptions made about "interest" rates for invested premiums that proved to be inaccurate, even before the 2008-10 financial crisis;
- Assumptions made about lower morbidity and higher mortality that proved not to be accurate for policyholders overall;
- The continued use of invalid assumptions about future premium rate increases.
In light of this tour through history, I was interested to read about New York LIfe Insurance Company's description of its "new and innovative long-term care insurance product" in its press release dated September 5, 2018:
A new long-term care solution announced today by New York Life, NYL My Care, promises to make the purchase of long-term care insurance simpler and more affordable. The innovative product features design concepts familiar to purchasers of other types of insurance, including a deductible and co-insurance, and offers the benefit of a dividend, which can help offset future premiums. NYL My Care clients will also benefit from the peace of mind that comes from working with a mutual life insurance company with the highest available financial strength ratings.
“New York Life is committed to helping people plan for the future, which includes protecting themselves and their loved ones from the financial burden of an extended health care event,” said Aaron Ball, vice president, New York Life Long-Term Care. “NYL My Care’s simpler, first-of-its-kind product design will help more people understand, access and afford the protection they need against the potential cost of long-term care.”
NYL My Care covers a wide range of long-term care needs, including home care, community-based care and facility care, and offers four pre-designed plan levels ... bronze, silver, gold and platinum.
For more on so-called "hybrid" or "asset" based products that couple long-term care benefits to annuities or life insurance polices, read New Life Insurance Brings New Innovations to Long-Term Care Insurance Market from Forbes.
September 12, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Legal Practice/Practice Management, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (1)
Tuesday, September 11, 2018
I'm preparing for an upcoming program in North Carolina and residents of senior living communities have sent me questions in advance. The questions I've received are a reminder that "transparency" is a big issue. As one resident candidly explained, "No population is more vulnerable than seniors living in managed care.... I consider myself among the vulnerable." I've come to believe that lack of transparency impacts virtually all of the options for financing of senior living, including long-term care insurance and continuing care communities. The problem is that many prospective clients do not know who they can trust, and many end up trusting no one. They end up not making any advance plan.
For example, this week there is industry-sourced news that 33 facilities operated under the umbrella of Atrium Health and Senior Living, a New Jersey-based company, are going into receivership. These include 9 "senior living communities" and 23 "skilled nursing facilities" in Wisconsin, plus a skilled nursing facility in Michigan. Atrium is also reported as operating 3 senior living communities and 9 skilled nursing facilities in New Jersey that "are not part of the receivership." If you look at the company's website today, however, it won't be easy to find news that insolvency is already impacting this company's sites. At least as of the time of my writing this blog post, there's only "good news" on the company's website.
The public tends not to distinguish between different types of senior living options, at least not until individuals get fairly close to needing to make choices about moving out of their own homes. I can easily imagine anyone who has done enough advance research to know about troubled companies to simply make a decision to steer clear of all facilities operated under a particular company name. But, I suspect there is also a much larger population of prospective residents who view reports of troubled senior living companies or facilities as a reason to reject all of the options.
Some providers will say that the problem is that "bad news" is over-reported. I don't think that is actually true. Rather, I think that there in most states is it hard to distinguish between financially sound or unsound options. Certainly, I've known state regulators who decline to talk about troubled properties on a theory that bad news may make it harder for struggling operations to work out their problems as they cannot attract new customers. Lack of transparency is argued as an explanation for giving operators a fair chance to recover, and recovery helps everyone.
States, however, have unique opportunities to learn from their roles as receivers for troubled operations. Wouldn't it be helpful for states to publish accurate information about what factors they have discovered that contribute to success or lack of financial success? And if not the regulators, why not have the industry itself publish standards of financial health.
September 11, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Property Management, Retirement, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0)
Thursday, September 6, 2018
A recent post on The Motley Fool provided several key statistics regarding Long-Term Care Insurance, including the fact that the number of companies still writing traditional LTCI policies in the U.S. has fallen dramatically:
According to a report by the NAIC, the number of insurers offering stand-alone long-term care policies (as opposed to ones bundled with some other product(s) such as annuities) dropped from 125 to 15 between 2000 and 2014. That will only surprise those who haven't been keeping up with the industry, which has been struggling.
What's the problem? Well, as noted in the previous statistic, long-term care is simply very costly, and healthcare costs in general are quite steep -- they have been increasing at rapid rates, too. Some insurers have had to hike the premiums they charge their policy holders, while others have just stopped offering long-term care policies. Genworth Financial, for example, recently announced a 58% rate hike, while Mass Mutual requested a 77% rate hike.
This information shouldn't necessarily stop you from seeking coverage, but do know that the industry has been in some turmoil, and approach it with your eyes open.
For additional statistics (and resources) read Five Long-Term Care Stats that Will Blow You Away,
Monday, August 13, 2018
A recent article, ‘Too little too late’: bankruptcy booms among older Americans published in The Business Times opens with a sobering thought: "[f]or a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy." A new study featured in the article paints a foreboding picture for many elder Americans "'[t]he rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers." What is causing this increase? According to the article, many factors, including changes in pension plans, health care out of pocket costs, declining incomes, to name a few. It notes as well that elder Americans may have more challenges in recovering from financial setbacks than others. The study is done by the Consumer Bankruptcy Project, which "is a long-running effort now led by Thorne; Lawless; Pamela Foohey, a law professor at Indiana University; and Katherine Porter, a law professor at the University of California, Irvine. The project — which is financed by their universities — collects and analyzes court records on a continuing basis and follows up with written questionnaires. ... Their latest study —which was posted online Sunday and has been submitted to an academic journal for peer review — is based on a sample of personal bankruptcy cases and questionnaires completed by 895 filers ages 19 to 92."
The paper by the study authors, Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society has been placed on SSRN.
The abstract offers this
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Wednesday, July 25, 2018
A recent reader asked about what happened in the Sears Methodist Retirement System bankruptcy case in Texas for residents who had paid a "refundable" entry fee before the company filed for reorganization under Chapter 11 of the Bankruptcy Code. In addition to sharing some legal documents in a recent update, I promised readers to reach out to contacts to get more of the story. I heard from a long-time correspondent, Jennifer Young. Here is her important story:
I am Jennifer Young. Prior to retirement I worked in Human Resources. I am currently a resident of a CCRC in North Carolina. I moved to North Carolina in 2015 after an unsatisfactory experience in a CCRC in Texas.
Here is what happened to me in Texas. I was a resident of a CCRC, one of the Sears Methodist Retirement Service (SMRS) communities, operated under nonprofit tax rules. There were 5 CCRC operations in the SMRS system, along with 2 subsidized senior housing complexes, an Assisted Living facility, and the management of 3 state veterans’ homes. Eleven communities in all. I managed to move into my CCRC just two years before SMRS filed for protection in bankruptcy court under Chapter 11.
My community was a Type C, 90% refund contract. Our CCRC was brand new, with the entrance fees of those moving in pledged to debt service for the construction loan. SMRS’ decision to break ground on the newest of their CCRCs in 2009 (in the middle of a recession) should have been my first red flag, but I was too wrapped up in the process of choosing a desirable lot and influencing the construction of our future cottage in my own community to think about the long-term implications of that management decision.
As I learned the hard way, the unsecured status of entrance fees meant that residents were “unsecured creditors” in the bankruptcy process; hence, I was advised to apply for a seat on the court’s Unsecured Creditor Committee. I did and served on this committee from the summer of 2014 until it was dissolved in the spring of 2015. Per Bankruptcy Court procedures, these Committees routinely hire a law firm (with fees paid by the bankrupt estate). Residents were lumped in with all of the other unsecured creditors. Meetings were conducted telephonically because committee members were quite scattered geographically. For example, one vendor of therapy services wasn’t headquartered in Texas.
I don’t remember whether the judge issued a formal order about the pre-petition refundable entrance fees, but I know all parties did not want residents to be financially harmed. They were worried about the very negative impact of residents losing their entrance fees, as happened during the 2009 bankruptcy of a Pittsburgh, Pennsylvania CCRC, Covenant of South Hills. A second such outcome, especially for a large, multi-facility community, would have been devastating to the continuing care industry as a whole.
In the Texas bankruptcy process, the court set up an interim manager (not from SMRS) who worked closely with attorneys from all parties in reviewing the offers from potential new owners. As a member of the above-mentioned Committee, I would hear that new owners MUST be willing to accept the current Residency Agreements (contracts). So “applications” to buy were screened in that regard; however, the Committee and the open court procedures did not reveal details regarding all the letters of intent that were submitted. They may have been buried in tons of documents, but I don’t know for sure.
There was an announcement in the fall of 2014 that another Texas non-profit wanted the CCRCs, and all parties seemed content with this prospect. However, that fell through, as this potential new owner’s Board put the kabosh on the deal. To simplify the complexities of the process, let’s just say that for the communities that were not “picked off” during the fall months, there was an auction in January 2015. In contrast, SMRS’ Assisted Living facility was purchased without an auction and its Subsidized Housing facilities went back to HUD.
Monday, July 16, 2018
The National Academies Press has released Future Directions for the Demography of Aging.This volume contains the proceedings of a workshop and the overview explains
Almost 25 years have passed since the Demography of Aging (1994) was published by the National Research Council. Future Directions for the Demography of Aging is, in many ways, the successor to that original volume. The Division of Behavioral and Social Research at the National Institute on Aging (NIA) asked the National Academies of Sciences, Engineering, and Medicine to produce an authoritative guide to new directions in demography of aging. The papers published in this report were originally presented and discussed at a public workshop held in Washington, D.C., August 17-18, 2017.
The workshop discussion made evident that major new advances had been made in the last two decades, but also that new trends and research directions have emerged that call for innovative conceptual, design, and measurement approaches. The report reviews these recent trends and also discusses future directions for research on a range of topics that are central to current research in the demography of aging. Looking back over the past two decades of demography of aging research shows remarkable advances in our understanding of the health and well-being of the older population. Equally exciting is that this report sets the stage for the next two decades of innovative research–a period of rapid growth in the older American population.
Part 1 looks at trends in health and health disparities, Part 2 examines the implications of social and environmental factors, Part 3 covers families and intergenerational issues, Part 4 covers employment and retirement, Part 5 discusses cognitive issues and disability, Part 6 reviews global aging and Part 7 offers new approaches. You can purchase the softcover book here, download a free pdf of the book by clicking here or read the book online.
PA Elder Law Institute Session on CCRCs and LPCs Will Discuss Pending Legislation and Indicators on Financial Performance
As I mentioned earlier, Pennsylvania's annual Elder Law Institute is July 19 and 20 in Harrisburg. On the morning of the first day, I'm on a panel examining new issues in Continuing Care Retirement Communities (and Life Plan Communities), along with Linda Anderson, an elder law attorney, Kimber Latsha, who frequently represents health care and senior living providers including CCRCs, and Dr. David Sarcone, a Dickinson College business professor with background in accounting and health care management.
I'm especially looking forward to the discussion of Pennsylvania 2018 House Bill 2291, introduced in April of this year, but already moving from one committee, to its first of three considerations on the floor, to the Rules Committee, with amendments. In other words, this bill seems to have "legs." The sponsors of the bill are calling it an "Independent Senior Living Facility Privacy Act." As with most catchy titles for pending legislation, the details are a bit more complicated. In this instance the bill's lead sponsor is from a county where a single CCRC was investigated by the State Department of Human Services following a complaint that "staffing levels" were inadequate, leaving certain residents allegedly at risk. The Department of Human Services issued an adverse order in May 2017 related to certain aspects at the facility and apparently that order is the subject of administrative appeals.
The provider contests the order, and in written testimony submitted to the Pennsylvania House Committee on Aging and Older Adults Services, the CEO explained his company's position that the investigators were abusing their authority by entering independent living (IL) units, questioning IL residents, and thus failed to respect the individual autonomy of residents not actually living in "personal care" facilities, facilities that would be subject to HS authority:
"We feel that DHS is inappropriately applying the term 'premises' [from the personal care regulations] as the grounds and building on the same grounds, used for providing personal care services. Each senior apartment is a 'separate individual leasehold,' where an inhabitant, the lessee of the apartment leases an apartment and is afforded the enjoyment and freedom to engage family and third party services."
At the core of this issue is a question about expectations of the public and the residents about care in "independent living" units of a licensed "continuing care community." (Pennsylvania has at least one pending wrongful death suit involving an entirely different CCRC, where one issue is whether the CCRC's alleged awareness of an IL resident's worsening dementia was ignored. She allegedly died of complications of exposure after wandering and being locked out of her IL apartment complex on a cold night.)
The proposed legislation would exclude "independent senior living facilities" (including public housing outside of the CCRC context) from future state Human Services investigations, including investigations by the Long-Term Care Ombudsman.
I expect we will also be talking about financial performance numbers of both for-profit and nonprofit CCRCs -- especially as some of the numbers suggest that some operations both sides of the industry "profit" line may be struggling to "live within their means."
In other words, there will be some especially "hot" topics for discussion.
July 16, 2018 in Consumer Information, Current Affairs, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, Retirement, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0)
Friday, June 22, 2018
CityLab recently ran a story about populations and particularly, where elders are residing. Mapping America’s Aging Population explains that "Demographers and geographers have watched as this aging cohort transformed the U.S., from young children in the 1950s and 1960s to senior citizens today. This graying of America has left a distinctive geographical fingerprint."
Want to guess where elders are living? If you started with the sunbelt you would be somewhat correct. "Unsurprisingly, popular retirement states like Florida and Arizona have high concentrations of older Americans... What may be more of a surprise is the broad swaths of elderly running through the Midwest and the Appalachians. These regions have aged significantly, as many younger residents headed toward the coasts." The demographic maps provide good pictorial representations of the locations where elders are living.
The article looks at births and deaths and relocation. Interestingly, "[p]eople are less likely to move as they age. In 1968, parents of the baby boomers were in their highly mobile, young adult years, but today boomers are older and more apt to stay where they are."
The Boomers seem to be clustering in certain geographic areas:
Baby boomers have contributed to this trend. Fifty years ago, this group was spread out evenly among the rest of the general population. By 1990, they had became more bicoastal and were concentrated in a small number of dynamic, growing metropolitan areas.
Between 1990 and 2000, a substantial number of boomers flocked from these metro areas to amenity-laden retirement and pre-retirement regions, like the Pacific Northwest, Florida, northern Wisconsin and Michigan, as well as some areas of the South, like the Ozark region and the Western Carolinas.
These areas have continued to grow, while baby boomers moved away in their greatest numbers from the southern Great Plains and the area along the Mississippi River Valley.
Thanks to my colleague and dear friend, Mark Bauer, for sending me the article.
Tuesday, June 19, 2018
Bryan Devore, an engaging realtor in California, recently wrote to me to report on his latest venture, a cable television program devoted to showing folks how to consider options for senior living. After I reviewed the first promotional trailer, I joked with Bryan about whether his target channel was HGTV, a favorite in my own family (resulting in the fact that now we know all too much about shiplap and sliding barn doors). Bryan responded by joking that perhaps the Lifetime network was the better target.
In any event, the concept is now "reality" and the first episode of Senior Savers TV is available. You can catch the 30 minute episode (with surprisingly interesting commercials for those of us who track senior living marketing topics) here:
Monday, May 21, 2018
Lisa Stegall, Assistant Professor of Biology at Hamline University, reports on positive results from a study where adults aged 60 to 80 participated in a weekly program of simple dance moves. From her report for Academic Minute:
Once a week for nine weeks, seniors aged 60 to 80 years old participated in an hour of music and movement training called Dalcroze eurhythmics. Led by a certified instructor who played improvised music on a piano, the seniors walked in time with the music, changed directions, and handled and passed objects rhythmically. They moved individually, with a partner, and in small groups to increase social interaction.
Our research team, made up of faculty and students from the Exercise Science, Music, and Public Health programs, tested the participants’ walking ability before and after the intervention, and found that gait (or walking) speed significantly improved. This held true even when participants were asked to walk and perform another task at the same time, called dual tasking. This latter finding is important because most falls occur while walking, especially when also performing other tasks.
Why did this intervention improve dual-task walking speed by 20%? We hypothesize that the improvement was due to the multicomponent movement training that’s unique to Dalcroze eurhythmics. Stepping to the beat of the music while carrying a ball, and passing that ball to another person in time with the music requires awareness, attention, balance, and coordination. These are the same skills needed when navigating the home, neighborhood, or the grocery store.
I expect we will see Dalcroze Eurhythmics classes coming soon to a gym or dance studio near you! My thanks to Dickinson Law colleague Laurel Terry for this tip.
From Singapore, comes a recent article in The Independent titled "Asia's Ageing Crisis Calls for Innovative Senior Housing Models and Foreign Investment." The article begins:
Asia is facing an ageing crisis with rising life expectancies and record low birth rates in some countries, as a result there is an increasing need for senior housing to cater to Asia’s ageing population. In a new report released today, Colliers International identified key trends in Asia’s demographic shift as well as innovative senior housing models around the globe which may be applicable to this region. . . .
Mr. Govinda Singh, Executive Director, Valuation and Advisory Services at Colliers International, said, "Singapore's greying population presents many opportunities for both policymakers and private developers to further invest in senior housing solutions. Demand for such accommodation will be also spurred by the rising awareness of healthcare and wellness benefits, and retirees having the financial capacity to take advantage of senior living services and facilities." . . .
On May 12, 2018, Singapore Prime Minister Lee Hsien Loong officially opened the country’s first retirement community Kampung Admiralty in Woodlands – an integrated residential development with a range of healthcare, elder and childcare facilities, together with commercial space to serve residents of the area. The concept was conceived by the Housing and Development Board more than four years ago.
The article noted population trends in the region, including the prediction that Asia's population of people over age 65 will "nearly triple by 2050 to 945 million, while the percentage of people over age 75 will often be "staggering," especially in Japan (36.4%), South Korea (35.3%), Hong Kong (33.9%), and Thailand (29%) by 2050.
Sunday, May 13, 2018
News publication sites affiliated with USA Today and the Associated Press have been running a recent piece on "bullying" among older persons, often with a provocative headline such as "It's like 'Mean Girls,' but everyone is 80": How nursing homes deal with bullies. The title undoubtedly catches many a reader's eye, simply because of the heightened discussions of bullying at a national level, including Melania Trump's recent announcement of her Be Best platform for younger persons. The topic isn't actually all that new from a journalism perspective. Paula Span wrote on "Mean Girls in Assisted Living" for the New York Times in 2011, and the same publication carried a granddaughter's Op Ed on "Mean Girls in the Retirement Home" in 2015.
On a parallel track, and perhaps more disturbing, are reports of bullying among nurses, a profession normally associated with empathy and caring. See e.g., "When 'Mean Girls' Wear Scrubs," a 2013 post on DiversityNursing Blog, tracking a several studies and a book.
More important than the clever headlines, however, are the reports of affirmative efforts to counter the bullying, which at the older end of the spectrum of life, seems to focus on name-calling, gossip, and ostracising behavior, rather than physical intimidation. From the most recent USA Today writer's article:
After the cafeteria exiles and karaoke brouhahas, the 30th Street [Senior] Center [in San Francisco] teamed up with a local nonprofit, the Institute on Aging, to develop an anti-bullying program. All staff members received 18 hours of training that included lessons on what constitutes bullying, causes of the problem and how to manage such conflicts. Seniors were then invited to similar classes, held in English and Spanish, teaching them to alert staff or intervene themselves if they witness bullying. Signs and even place mats around the center now declare it a “Bully Free Zone.”. . .
Robin Bonifas, a social work professor at Arizona State University and author of the book “Bullying Among Older Adults: How to Recognize and Address an Unseen Epidemic,” said existing studies suggest about 1 in 5 seniors encounters bullying. She sees it as an outgrowth of frustrations characteristic in communal settings, as well a reflection of issues unique to getting older. Many elderly see their independence and sense of control disappear and, for some, becoming a bully can feel like regaining some of that lost power.
I think that last line rings true. I've certainly seen older adults sudden strike a "meaner" demeanor as their freedom is limited by physical health issues and as their frustrations increase. But I also think it can be important to assess whether a "mean" trait -- or at least a "meaner" dynamic -- is a reflection of cognitive impairment, such as disinhibition associated with certain types of neurocognitive impairments.
On an even more worrisome level, is there a danger of misinterpreting fear or irritation as "meanness," perhaps arising from compelled interactions in a congregated living situation? In one instance, I've seen an older woman who had regularly chose to sit with the same group of 3 other individuals at meals for several weeks, suddenly reject one member of their informal club. It took careful listening to realize the rejection was actually uneasiness bordering on fear -- on some level not completely rational -- but associated with that targeted individual's tendency to wander at night into others' rooms and thus to lead the "mean girl" to try to keep the other away from her around the clock. Targeting the "bullying" behavior could be addressing the wrong problem in the latter case.
Finally, I think there is a danger associated with the admittedly clever tendency to use the "Mean Girls" movie as the analogy for older bullying, thus implying this is only an issue (and problem) associated with women, not men. As a later paragraph in the most recent article makes clear, bullying behavior among older adults is not "just" about women. But perhaps that is obvious from the larger national news?
May 13, 2018 in Books, Cognitive Impairment, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Health Care/Long Term Care, Retirement | Permalink | Comments (0)
Tuesday, May 8, 2018
Most commentaries on funding for retirement years point to insufficiency of savings or other resources. But here's a different take, drawing upon a recently published report from the Employee Benefit Research Institute (EBRI) that suggests retirees with significant savings are often exercising restraint in spending, From the St. Louis Post-Dispatch on The Myth of Outliving Your Retirement Savings:
In the EBRI study, those with the most savings — a median of $857,450 shortly after retiring — still had $756,300 two decades later. The decrease amounts to just 11.8 percent of the original sum.
The largest drop in retirement nest eggs, 24.4 percent, was among those with the least savings, or a median of $29,975.
Frugal behavior is consistent with research led by Anna Rappaport for the Society of Actuaries. She and her team found that most people do not plan for retirement or know what they should spend, but they adapt — even when shocked by high dental bills or a roof repair.
What can devastate financially are divorce, caring for a mentally or physically ill adult child who cannot work, and long-term care expenses, according to the actuarial society’s research.
Still, debilitating health care costs are far more rare than people fear, according to the EBRI research. Half of retirees face no nursing home expenses because Medicare covers short recoveries after hospital stays and Medicaid can help when resources run out.
The medical annual out-of-pocket spending for 90 percent of retirees is just $2,000, and the big nursing home costs over $87,000 hit only 10 percent of people living longer than 95, according to the EBRI study.
For the EBRI study itself, see the April 2018 report on Asset Decumulation or Asset Preservation? What Guides Retirement Spending?
Thursday, May 3, 2018
Frequent reader Karen Miller from Florida made a timely catch by sending me two articles that both mention the "peace of mind" that can accompany living in purpose-planned retirement communities, including CCRCs or LPCs. Thanks, Karen!
In last Sunday's edition of the New York Times, reporter Peter Finch offered "How to Talk About Moving to a Retirement Home: It's a Journey." He includes admissions by once highly reluctant residents, including one who finally gave in to his wife's desire for a new setting:
For the once-skeptical Mr. Strumsky, it took only days for him to start feeling certain that he and his wife, who is 72, had made the right decision. About a week after moving in at Charlestown [a retirement community outside of Baltimore], he went out to walk the dog at night and ran into a pair of women he didn’t know who were chatting amiably in the parking lot. About 25 minutes later, he returned home and saw the same women, still talking.
“They were so unconcerned about their personal safety, they were oblivious to anything going on around them,” Mr. Strumsky said. “And it just hit me: I really wished my mother or my sister or my aunt could have had this experience, to feel that safe and secure. At that point, it was like a light bulb going on. It was an instant turnaround for me.”
By contrast, Patricia Hunt, a columnist for the News Leader (part of the USA Today Network), writes about "friends whining about the rules of their . . . subdivision," noting that the security that some people seek can come with a regulatory price tag, even if the regulator isn't the government. She writes in part:
In retirement many people with the means to do so choose a “continuing care retirement community.” There is a big price range, but basically you pay an entrance fee, and most require that you be well enough to live independently to be admitted. They provide food service, activities, and stepped up sections for “assisted living” and for the most debilitated, “skilled nursing care.” This is the most expensive option for one’s last years.
But the rules for the residents of CCRCs are set entirely by people who do not live in them. And flexibility is the most restricted of all options. If you grandson who ran away to join the circus can be talked into living with you for a few months until he can sort things out with his parents, you cannot let him do that. If you decline in health and your granddaughter is willing to come live with you so you don’t to go to assisted living or skilled nursing care, you can’t do that either. You can hire people to come in night and day, but your family member cannot simply move in. She must have another permanent address. At least this is how most of them work.
If you[r] adult child gets sick or loses a job and needs to stay with you, it is not allowed. And you may not have the money to help him or her out if you have spent it all on the entrance fee and monthly fees.
Hunt concludes by questioning whether people "really" do hate regulation, noting "there is plenty of evidence of that some of them are not only willing to live with more regulations than many other people, they are willing to pay a lot of money to do so."
For more from Hunt, read the full column "We Hate Regulation, But We Willingly Trade Away Our Basic Freedoms for Comfort, Security."
May 3, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, Retirement, State Statutes/Regulations | Permalink | Comments (0)
Monday, April 30, 2018
Recently the Washington Post ran an article about multigenerational homes increasing in popularity. Homes with multigenerational family members are a growing trend begins with a story of a three-generation family living in one household. So is that what it means to have a multigenerational household? "Pew Research Center defines a multigenerational household as one with grandparents and grandchildren or with two or more adult generations. The trend since 1980 is more people living in multigenerational homes, and a higher number of multigenerational households...." according to a Pew expert quoted for the article. In 2016 the article notes, 20% of Americans live in multigenerational households. This trend has even affected builders who are designing some homes to accommodate these families. But it's not all about the design, the article notes. There are costs, real and emotional, that come with multigenerational households. Design typically includes communal living spaces, such as a kitchen or living room. Compromise is the key to success here. As one of the families feeatured in the story offered
Wednesday, April 25, 2018
On April 24, 2018, members of the Organization of Residents Association of New Jersey, or ORANJ, held a plenary meeting at Cedar Crest Retirement Community in Pompton Plains, New Jersey. ORANJ President Ron Whalen began the meeting with an update on pending legislation attempting to resolve residents' concerns about timeliness of payments on "refundable fee agreements." Part of the message is reflected in the history of Pat Lund, a resident of a CCRC in Waterford Township, New Jersey, who waited eight years for her "refundable fee" to be paid after moving out of her apartment. Under the terms of her contract, the refund was not "payable" until someone else occupied her specific unit but the facility seemed to have little interest or incentive to market her particular unit. For more on this topic, see my update post from last week. As summarized by Ron Whalen, "many of the 10,000 New Jersey residents in CCRCs (also known as Life Plan Communities or LPCs) have this type of contract."
James McCracken, the new president and CEO of LeadingAge New Jersey was the afternoon speaker and he provided a roundup of topics affecting older adults in New Jersey as the legislative season draws to a close, including concerns about "earned sick leave," delayed Medicaid payments by the state to care facilities, proposed minimums on CNA staffing at care facilities, and changes to minimum wage.
I spoke in the morning about issues I see affecting CCRCs and LPCs nationally and in New Jersey, including topics that challenge tax-exempt CCRCs, such as pressure to make payments in lieu of taxes to state and local authorities. On the topic of resident concerns, I addressed what I call the "big three": lack of transparency on cost and funding issues, the need for effective resident voices in governance, and excessively paternalistic attitudes of some management.
This is at least my third time speaking with ORANJ members over a period of several years, and each time I visit I'm impressed with the strength of their resident organization and their ability to get the state legislature to listen. ORANJ helped their state to be one of the first to get legislative support for CCRC residents gaining the statutory right to serve as voting members on boards of governance, and ORANJ advocacy was also instrumental in passage of an enhanced "bill of resident rights" for CCRC operations.
New Jersey has approximately 40 CCRC/LPC communities within the state. Some 87 percent operate as not-for-profit, while another 13 percent are for profit. The majority of the communities are now part of "multi-site" organizations, and I spoke with several residents who reported on pending conversions of not-for-profit to for-profit.
April 25, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Kiplinger offers a quiz for you to test your knowledge of Social Security. Do You Really Understand Social Security? offers a ten question quiz with explanations. After you take that quiz, then take the Do You Know the Best Social Security Claiming Strategies? another 10 question quiz with explanations. These would also be really good to have students take to test their knowledge after you have covered Social Security in your courses.
Friday, April 20, 2018
Recently the Washington Post published an article comparing generational alcohol intake. Teenagers and college-age people drink less while this group pours another round opens with this observation "[e]xperts on alcohol abuse have found one demographic group that’s drinking at an alarming rate. Not teenagers. Not college-age people. It’s baby boomers." The first few paragraphs of the article focus on younger individuals and then turns to Boomers, noting that it's "been known for half a century is that baby boomers tend to like alcohol more than the “silent generation” that preceded them."
"Researchers see a steady rise in alcohol use and binge drinking — as well as what’s known as Alcohol Use Disorder (AUD), an umbrella term for mild, moderate and severe abuse of alcohol — in the 65-plus demographic. Between 2005 and 2014, the percentage of older Americans who reported engaging in past-month binge drinking (defined as women consuming four or more drinks in about two hours, and men consuming five or more) increased from 12.5 percent to 14.9 percent ... [and] [t]he increase in drinking among older Americans is most pronounced among people with greater levels of education and income, and among women.... At continuing care communities, alcohol is typically available as a social lubricant for the majority of residents who haven't graduated to assisted living...."
according to one expert quoted in the article.
One thing that is implicated in this is the perception or impression that moderate alcohol consumption is healthy. "[M]any boomers have embraced the notion that moderate drinking is good for them, compared to abstaining. The evidence there is mixed. A number of studies have shown a reduction in heart attacks among moderate drinkers. But a new study published in the Lancet last week showed no overall improvement in life expectancy among people who had one drink a day compared to those who abstained, and a decrease in life expectancy with any additional drinking. The study's authors concluded that the reduction in heart attacks was offset by other health risks."
Tuesday, March 27, 2018
The Hidden Brain is a great radio program with frequent stories relevant to aging. A recent episode is titled Guys, We Have A Problem: How American Masculinity Creates Lonely Men. Frankly, I think the title doesn't do the episode justice, as although the episode focuses primarily on the potentially disproportionate likelihood of isolation and loneliness for men as they get older, many of the program's most important points strike me as applying equally to anyone who finds his or her life becoming more isolated.
One interview explored the moving personal history of a lawyer, Paul Kugelman, as he went through life, starting with disconnections connected to frequent military-service-connected family relocation, followed by his own divorce and struggles with work/life balance, a temptation to drink, and a a recovery strategy that included completing an Iron-Man Marathon. But running wasn't enough. Over-reliance on a spouse put enormous pressure on the relationship. He had to learn new skills to create new friendships.
The program also explored findings from an early Harvard study of American men, now known as the Harvard Study of Adult Development, a study that has been on-going, with various adjustments based on funding sources, for 8 decades. One question asked over the entire course of the study's history was deceptively simple:
Who would you call in the middle of the night if you were sick or afraid?
It turns out that if men had a solid answer to that question, they were happier with their lives and their marriages. "There were also connections with the men's answers to that question and their physical health. Very strong connections."
The program dug deeper into physical health and emotional connections, suggesting that we should think about how coming into work on a Monday morning. Do you look forward to seeing people you like? That connection is energizing. And calming.
The program explained that studies show that the people who are "happiest in retirement are those who actively work to replace colleagues with friends." "Spending time building and nurturing your friendships might be just as important to your health as eating right and exercising."
Bottom line: Don't miss the warning signs that your social circles are shrinking, regardless of gender.
The New York Times has a good overview on 7 Ways to Judge a Retirement Community's Financial Health, by Peter Finch, published on March 9, 2018. Many of the tips come from savvy residents at Continuing Care Retirement Communities (CCRCs, also called LifePlan Communities) around the country, as well as from actuaries and industry experts.
As consumers grow more aware of risk at all levels of financial markets, senior living providers are facing good questions about how upfront entrance payments and monthly fees are used. Other topics include appropriate occupancy levels, the history of rate increases, debt ratings that can affect cost of operations and loans, capital improvements, reserves and the right of residents to be engaged on governance issues.
From the article:
Retirement community managers will not be shocked by these sorts of questions, promised Stephen Maag, director of residential communities at LeadingAge, an association of aging-service providers. “As we get the people born in the late ’30s and the baby boomers, they’re much more thorough in their research” than their parents and grandparents were, he said.
My thanks to my colleague Laurel Terry, for sending me this article. I especially enjoyed seeing two friends highlighted in the article, Jack and Valerie Cumming, residents of a CCRC in Carlsbad, California. When I visited with them a few years ago, I was happily amused to realize their lovely CCRC was once the hotel where my own parents spent their honeymoon. How about that for a sign of the times - - honeymoon spots that become retirement villages!