Chapter 1 – Changes in Life, Changes in Living Needs
What are some of the most common issues impacting people over 50?
Everyone’s situation is a little different, but there are five categories of issues that impact most people.
1. Earnings changes
- a. Retirement / semi-retirement
b. Reliance on pensions, government, retirement plans, and investments
2. Money fears
- a. Inadequacy of savings
b. Debts still outstanding
c. Big money events – weddings, tuition, health issues
d. Fear of living longer than money lasts
3. Lifestyle changes
- a. Adjusting to new, less work-centric lifestyle
b. Becoming an empty nester
c. Wondering how to constructively use more free time
d. Potential separation / divorce
e. The need to simplify
f. The need to downsize
4. Family changes and needs
- a. Grown kids facing challenges
b. Parents becoming elderly
5. Physical and mental issues
- a. Health challenges
b. Mental challenges
c. Mobility challenges
Chapter 2 – Beginning to Formulate Your “Finding Home – Over 50” Plan
How much money am I going to need in retirement so that I do not run out?
The amount of money you will need to carry your through retirement is dependent on how long you expect to live, where you plan to live, what life list goals you want to accomplish, what fixed and variable costs you expect to incur, and what types of insurance coverage you carry.
Start by getting a good estimate of how long you will live. Go to the Social Security Administration’s website at https://www.ssa.gov. Search the site for the Life Expectancy Calculator. When you find it, fill in your gender and birth date. The site will then tell you the age to which you are expected to live based actuarial tables. You then adjust from the actuarial prediction based on your own family history, lifestyle, physical health, eating habits, and so forth to arrive at your customized expectation of the age to which you will live.
Now consider the age you will be when you retire. The difference between your retirement age and the age to which you expect to live is the number of years you will need to fund in retirement. For instance, if you plan to retire at age 65 and live to be 85 you will need to fund 20 years of retirement living. Advisors suggest that you should anticipate needing about 80 percent of your pre-retirement annual earnings to live on each year in retirement. So if you make $100,000 per year now, figure you will need $80,000 per year in retirement. Multiple that by 20 years you expect to live in retirement, and you obtain $1,600,000. That is the estimated amount of money you will need to carry you through retirement.
You will need to get this much money from earnings from a post-retirement job or self-employment, investment earnings, Social Security benefits, other government retirement plan benefits, pension benefits, an annuity product, sale of assets, other earnings sources, and withdrawal for principal from your savings and investment accounts.
The more frugally you live, the less you will need. If you experience serious health issues, you likely will need more money unless you have supplemental insurance and perhaps long-term care coverage.
What is the difference between a life list and a bucket list?
There is no difference, except the name. A life list is a list of dreams that you actually strive to make come true. It is a list of intentions, not simply wishes.
Chapter 3 – Securing Your Financial Foundation
How can I strengthen my balance sheet?
Strengthen your balance sheet by boosting your assets (by saving more) and decreasing your liabilities (by paying off debts). By doing so, you increase your net worth. You also strengthen your balance sheet by adding liquidity to it (make it easier convert your assets to cash) by swapping non-liquid and hard assets for liquid assets, and paying off shorter-term liabilities. Strengthening your balance sheet should be one of your primary objectives as you approach retirement. In the budget section in Finding Home Over 50, we will talk about specific steps you can take to achieve this goal.
How early should I start drawing Social Security benefits?
If you worked and paid payroll taxes for an extended portion of your life, you are eligible to begin receiving Social Security or other government retirement program benefits starting at age 62. However, you are not required to apply to begin receiving benefits until age 70.
The longer you wait, the higher the amount your monthly benefit payments will be once you start drawing them. The government gives you “retirement credits” for waiting. This makes sense, as you will be drawing up to eight fewer years of payments if you wait to age 70, so the Social Security Administration can afford to pay you more each month.
Unless you do not expect to live much longer or cannot survive comfortably without your benefits at an earlier age, it is generally advantageous to wait as long as you can before receiving such payments.
If you can wait until age 70, the maximum allowed age to begin drawing benefits, the monthly amount you receive will be about 77% higher than what you would receive monthly if you begin drawing at 62. The breakeven point between waiting until age 70 and receiving larger payments versus starting at age 62 and receiving smaller payments is about 80 years of age. After that, you are better off having waited.
What are some of the ways my expenses may decrease after retirement?
Some key areas where you may have post-retirement expense reductions include:
• Reduced costs of commuting to work
• Reduced vehicle costs: if you can live without a second car, sell it and save
on insurance, license tags, parking, and other fees and costs
• Reduced need for professional clothing
• Reduced “time saving” costs of convenience items
• No office-related costs (lunches out, chipping in for gifts, office pools)
• Reduced costs for food and services due to qualifying for senior discounts and promotions, and having more time to look for bargains
• Reduced travel costs using senior discounts and taking advantage of
having more scheduling flexibility to book ahead
• Reduced fees for items you will no longer want or need
• Reduced income and sales taxes
What are some of the common types of employer-sponsored retirement plans?
Depending on your type of employer, employer-sponsored plans have different names as follows:
• 401(k)s are the version that corporations offer to their employees. (Roth 401(k)s are a subgroup that have a different tax treatment)
• 403(b)s are for employees of public education entities and most other nonprofit organizations
• 457s are for state and municipal employees, as well as employees of qualified nonprofits
• Thrift Savings Plans (TSPs) are for federal employees
• SIMPLE IRAs are a type of traditional IRA for small businesses and self- employed individuals that allow employees to make contributions and require employers to make defined matching or flat contributions
401(k) plans are the most common type of employer-sponsored defined contribution plan. However, there are no major differences between a 401(k) plan and the other employer-sponsored defined contribution plans (beyond who can use them). Money in the plans grows tax-deferred until it is withdrawn, at which point it becomes taxable.
There is a maximum amount you are allowed to contribute to your plan each year. The statutory maximum may change from year to year. You can easily find these amounts on the Internet and verify them with your accountant. Maximizing your contributions to these plans is one of the best retirement savings options. You should take full advantage of the significant incentives you receive by contributing as much as you can afford to whichever defined contribution plan your employer offers.
Chapter 4 – Decluttering Your Life
What types of items should I get rid of?
1. Clothes you almost never wear (different from your current size (i.e., small or large), unneeded office attire, out of style, wrong age group, in need of mending, etc.)
2. Anything in off-site storage
3. Exercise equipment that is gathering dust
4. Oversized items (air hockey, pool table, foosball table, doll house, etc.)
5. Kitchen appliances and gadgets
6. Extra vehicles
7. Childhood memorabilia, board games, and toys
8. Excess and oversized furniture
9. Most of the books you have already read (except reference, how-to, and favorite books), magazines, and DVDs
10. Paper document files (except vital records)
11. Excess office supplies
12. Accumulated screws, nails, building materials, hardware, and specialized
14. Anything that belongs to others
What types of items should I hold on to?
1. Vital papers
2. Family heirlooms
3. Personal items that you use regularly and enjoy
4. Electronic devices that store personal information
5. Photographs and family movies
6. Items you have collected
7. Fine jewelry
8. Sentimental items
9. Emergency items and supplies
10. Basic kitchen and bathroom supplies
11. Expensive handbags and their tags
12. Unexpired medication and toiletries
Chapter 5 – Functional Assessment – Weighing and Addressing Your Needs and Those of Your Older Loved Ones
What are Activities of Daily Living?
A primary measurement method for determining the appropriate type of residence is to perform what health-care professionals call an assessment of Activities of Daily Living (ADL or ADLs). ADLs are divided into two categories:
• Basic ADLs
• Instrumental ADLS
Basic ADLs consist of self-care tasks that are necessary for the most fundamental aspects of functioning. They include, but are not limited to, these areas:
5. Personal hygiene and grooming:
Simply stated, basic ADLs are the tasks people do when they get up in the morning and prepare to go out of the house: get out of bed, go to the toilet, bathe, dress, groom, and eat.
Instrumental activities of daily living (IADLs) are self-care activities that go beyond the most fundamental aspects of functioning and are more complex and demanding; they allow an individual to live independently within a community. They include, but are not limited to, these areas:
1. Daily Tasks Around the Home:
2. Social Activities:
3. Personal Finance:
4. Health Care:
How do I do an ADL assessment, and what do the results mean?
Chapter 5 in Finding Home Over 50 includes instructions and six tables that you can use to perform an assessment of ADLs. Work with your loved one(s) to complete each of these ADL assessment tables for them. Table A is the Personal Care table; it contains all the basic ADLs. The instrumental ADLs are spread over the subsequent four tables, B – E. Table F is the table used for aggregating tallies from each of the first five tables.
For each of the first five tables (A – E), put a “1” in the column that correctly indicates how frequently your loved one being assessed independently performs the described activity (Hardly Ever, Sometimes, or Almost Always).
Then, for each table, total the 1’s in each column and record the column totals in the last line of the table. These totals show the Independent Action Frequency (IAF) for the ADLs assessed in that table. Transfer the IAF totals from Tables A – E to Table F, which is used to tally a grand total of IAFs.
Using a simple weighting system, you can arrive at an ADL Independence Score for the person being evaluated. Then using a Housing Continuum table provided, you can match the ADL Independence Score to the type of housing most suitable for the person based on their ADL assessed needs.
What sorts of events usually precede the need to move a loved one into an assisted living facility?
Examples may include:
1. The person is having memory lapses that are becoming a safety concern.
2. The person falls and sustains an injury.
3. The person suffers a heart attack, stroke, or some other debilitating event.
4. The person becomes unable to perform one or more basic ADLs.
5. The person becomes unable to perform several instrumental ADLs.
6. The person is no longer eating well.
7. The person’s spouse passes away.
8. The person no longer has friends or sufficient family members to provide assistance nearby.
Chapter 6 – Housing Alternatives – Independent Living Options For Aging In Place
What does independent living mean?
Independent living may involve living alone, sharing a residence, or residing in a community where the residents maintain their own homes but interact and provide companionship and support to each other. Independent living is ideal for individuals who can still perform most activities of daily living on their own, but to the extent they need assistance, are able to access it from family members, friends, or third party home care and home health-care providers. The type of home or independent living community is a choice driven by how and where you want to live; it is a “wants-driven” choice.
What does aging in place mean?
Aging in place means living in a residence of your choice for as long as you are able to do so as you grow older. This may entail hiring home care or home health-care providers or other support workers to come to your home to assist you as your needs change.
You can age in place in your current home or move to a new home to do so. The key to successfully aging in place is anticipating and preparing for your changing needs now.
Whether in your current home or a new one, evaluate these three essential elements about the home when preparing to age in place:
What are some of the primary independent living choices?
1. On your own (with your spouse or partner) without sharing your home, common spaces, one or more rooms, access to services, household chores, or financial obligations with neighbors, other residents, or other family members. You can do this in your current or a new home
2. In a Multigenerational Living setting
3. In a Manufactured Home on Private Land and in MH Communities
4. In a Cohousing Community
5. In a Naturally Occurring Retirement Community
6. In a Village Community
7 In an Active Adult Retirement Community
Chapter 7 – Housing Alternatives: Semi-Independent Living, Assisted Living, and Nursing Care Options
What do you mean by semi-independent living, assisted living and skilled nursing facilities?
Semi-independent living, assisted living, and skilled nursing facilities are for individuals who have difficulty with instrumental and/or basic activities of daily living (ADLs) at home, and are unable to access needed support from family members, friends, or third party home care and home health-care providers. The type of facility in which you live is driven by the extent to which you require assistance, and the nature of that assistance; it is a “needs-driven” choice.
What are examples of semi-independent living facilities?
A continuing care retirement community (CCRC), or multi-level care facility, offers accommodations for at least three levels of care: independent living, assisted living, and skilled nursing. Many now also offer Alzheimer’s and dementia care, also known as memory care. These services are offered on a single campus, providing residents with a continuum of care. You can spend the rest of your life in a CCRC, moving among levels of independence, assistance, and care as needed.
Congregate care facilities are a housing option between age-restricted independent living and assisted living facilities. They are intended for seniors at least 62 years of age who can for the most part live independently, but may need a little assistance with activities of daily living (generally one to three ADLs). Care is offered in a congregated setting. Facilities range from small home-like settings with a handful of clustered units to several hundred units in a single building.
What types of assisted living options are there?
Four primary assisted living options are:
1. Assisted living facilities
2. Care homes
3. Memory care facilities
4. Respite care facilities
In assisted living facilities, residents live in an apartment-like setting and arrange for services necessary to accommodate their needs and abilities in order to maintain as much independence as possible. Unlike congregate care, assisted living facilities usually have staff available 24/7 to provide residents assistance with basic and instrumental ADLs and limited medical care. Staff members routinely provide assistance with medications and housekeeping. Most assisted living facilities provide licensed nursing services, but the hours vary greatly, so be sure to ask when you visit. Social activities and scheduled transportation are also available in most communities. A special unit for Alzheimer’s residents is available in some, but not all, communities.
Care homes are private homes, with live-in caretakers who offer personalized service to small groups of adults that live together within the home. These homes provide lodging, meal services, and assistance with daily living activities, such as laundry, managing medications, and assisting with bathing and dressing. Care homes appeal to seniors who prefer a more private, home-like community.
Assisted living facilities, skilled nursing facilities, and sometimes care homes may offer memory care options for people with dementia or Alzheimer’s disease. These facilities will offer people who are memory impaired 24-hour support and structured activities to help ensure their safety and quality of life. Many people will choose a memory care option for their affected loved ones due to the difficulty of and skill required for caring for a person with memory problems.
Respite care provides a temporary break for caregivers, allowing for relief from the daily responsibilities of caregiving. Options for respite care range from adult day care and temporary stays in assisted living facilities and nursing homes, to in-home care and staying with a friend or relative.
What is a skilled nursing facility?
Skilled nursing facilities, commonly referred to as nursing homes, provide the highest level of care for older adults outside of a hospital, including assistance in both daily living activities and medical care. They are comprehensively regulated medical facilities. A licensed physician supervises each resident’s care, and a nurse or other medical professional is almost always on the premises. Other medical professionals available may include licensed practical and vocational nurses, occupational and physical therapists, speech-language pathologists, and audiologists.
Chapter 8 – Should I Stay or Should I Go? – Choosing Your Home Location
How do I make my decision to stay in my current home or move to a new one
Chapter 8 in Finding Home Over 50 provides a tool called a Location Choice Hierarchy (LCH) matrix. It helps you to organize your thoughts and figure out your predominant needs and wants. Then you can make a decision on location. The LCH helps you to consider important factors that help you hone in on smaller and smaller geographic areas and finally specific homes. The table starts with states, then areas within each state, then drills down to ever smaller geographic areas until you get to desirable neighborhoods and the features you want and need in a home within the neighborhood you ultimately choose.
Take some time and use this table to think through what is really important to you and how it will impact your housing location choice. In the end you may find that your current home satisfactorily meets all your needs and wants. Or you may identify through the LCH process other areas and homes that better meet your criteria.
Chapter 9 – Preparing Your Current or New Home for Aging in Place
If I stay in my own home, or buy a new one, what can I do to make it easier for me to age in place?
When thinking about aging in place needs, anticipate the potential for both physical and mental impairment in the normal aging process. Physical impairment involves losing the ability to easily stand, walk, or move about, and losing functionality in your hands. To be able to age in place, you will need to be able to get to different areas of your home, avoid having to climb stairs, and avoid having to use much arm strength or fine motor skills to open doors and cabinets. To design for these issues, you will, for instance, need doorways and hallways that are wide enough to allow passage in a wheelchair, chairlifts or an elevator to ease movements between floors, and easy-to-grasp lever hardware on doors.
Mental impairment comes in many forms and degrees of severity. It could be simple memory loss, attention deficit, or decreased ability to concentrate. Or it could be more severe, such as Alzheimer’s disease or dementia.
Simple mental impairments can be addressed with technological devices that assist both you and eventual caregivers. For instance, many types of sensors can be installed, such as ones that indicate when pill bottles or the refrigerator are opened. Smartphone- controlled thermostats, lighting, blinds, and appliances are becoming more common. It is likely more technologies addressing aging-in-place needs will be sold in coming years. For more severe forms of mental impairment, it is probably not safe for you to independently stay in your home, regardless of technological aids available.
Chapter 10 – Mortgage Loans in Reverse
What is a reverse mortgage?
A so-called “reverse mortgage” is a special type of home loan that allows borrowers to convert a portion of the equity in their home into cash and then not have to make ongoing monthly payments on the loan. Reverse mortgages are generally available only to borrowers who are at least 62 years old. People use money borrowed under reverse mortgages to supplement retirement income, pay off an existing “forward” mortgage, meet medical expenses, make home improvements, and for a myriad of other purposes.
Chapter 11 –
Organizing Your Estate Documents
What sorts of information do I need to get together to ensure my loves ones can figure everything out when I die?
Chapter 11 in Finding Home Over 50 provides a form on which to record all your vital information which those handling your affairs will need to know. Take the time to fill this out. It is a tremendous gift that you can give your loved ones. Being prepared for your death (or even significant debilitating event) can give you a tremendous sense of personal security and greatly decrease the burden that would be suddenly forced upon your loved ones.