Thursday, August 16, 2018
One of the most critical decisions facing millions of Americans in retirement is selecting an assisted living community. Familiarizing yourself with the available options, understanding the financial implications, and ensuring that a community’s staff and medical resources are first-class is no easy task, one that is made more difficult in the absence of adult children or other supportive family members.
Countless retirees will grapple with these questions seemingly on their own, but Registered Investment Advisers like Brighton Jones can play a key role in guiding individuals through the search and selection process.
Manisha Thakor, CFA, CFP®, vice president of financial education at Brighton Jones, sat down to discuss strategies for retirees without children. At 48, single and childless herself, it is a subject in which she is very interested.
What’s the right time to start these conversations with clients?
Unless your health dictates sooner, I’d suggest any point after age 65 is a good time to start thinking about how you want to structure your life when you reach the point that you cannot care for yourself on your own.
While you are still young at heart and energetic, the reason this is the ideal time to start the search process is multifold. First, some of the most coveted assisted living facilities have multi-year waiting lists, so this is not something you want to put off until the last minute. Second, by evaluating your options well before you need to utilize them, you are often in a clearer, calmer, curious state of mind.
What lifestyle or logistical considerations should people consider when choosing an assisted living community?
I always ask that people consider the type of environment they want to live in long-term. For some, being near a major medical center (think Scottsdale and The Mayo Clinic or Cleveland and The Cleveland Clinic) are essential. For others, the proximity to nature is vital. Some will tell me that being near bustling cafes, restaurants, and shopping centers is paramount.
When it comes to the community itself, I encourage clients to pose a few key questions touching on day-to-day logistics:
- Can I keep a pet?
- Are there any prohibited activities within one’s personal space (i.e., smoking or using a countertop grilling apparatus)?
- What is the process for screening and monitoring staff?
- Is there medical staff on site at all times? If so, are they doctors, nurses, or a mix?
What role would my advisor play in the actual search and vetting process?
For clients who live in the vicinity of one of our five offices—Seattle, Portland, San Francisco, Scottsdale, and Washington, D.C.—our advisors have deep relationships with local estate attorneys who can often guide us toward the best options to consider, from communities to elder law specialists to elder care specialists.
Just as we would attend a meeting with a client and their CPA or estate lawyer, we would actively work with older clients to vet their available options. Vetting could mean accompanying them on a visit to a community or debriefing before and after their own visits to compare and contrast.
For those starting this research on their own and unsure of where to begin, here are some helpful resources:
- The Assisted Living Federation of America provides a list of primarily for-profits centers.
- LeadingAge provides a list of mostly nonprofit facilities.
Beyond the pure cost, what other financial questions should be answered before a decision is made?
Make no mistake: assisted living arrangements are expensive. The median annual cost in 2017 was $45,000 per year according to long-term care insurer Genworth. Medicare does not cover these costs, so the funds are likely coming right out of your own pocket.
There is a wide range of financial questions to tackle, but these are the most critical ones in my eyes:
- Can I see the contract for residents? You want to understand exactly how billing works—what are the standard fees, how is billing handled for additional services ranging from personal care to laundry, are there any “rules and regulations” that might make you uncomfortable? Be sure to ask about the rate of increase in fees; both what this history has been over the past 10 years and if there is any stated increase that will occur annually (or at another time frame) per the contract. You’ll also want to know the length of the contract, as the terms may change if/when you renew. If reading contracts is not something you are comfortable with, hire an elder law attorney to review them for you.
- How is medical treatment handled? Which insurance programs do you participate in (Medicare, VA assistance, long-term care insurance, etc.)? Do I have to see a doctor within the community or can I continue to use my existing doctor?
- If I end up living much longer than I ever expected and I run out of money, what happens? Do I get kicked out of the community?
- If I end up needing more than routine assisted care living—say around the clock oversight or care—can I do this at your community? If so, what are the associated charges?
- If I have to go to a hospital for long-term care or recovery, will you hold my housing or are there limits after which you will “expel” me from the community? What are the triggers for “involuntary discharge”?
Another step to take is to visit eldercare.gov to find out if there have been any reported incidents of substandard care or other red flags at the communities you are considering.
How can retirees, especially ones without children or close family, maintain a sense of belonging and interaction as they contemplate the shift to an assisted living community?
For many people, the thought of moving into assisted living can feel like entering a long, dark tunnel that is leading toward the end of your life. To keep that from happening, have some fun with the process. While you are still in good health and at the logistical stage, start dreaming about what part of the country you might want to be in. With no kids (or estranged or far-off ones) you are a free bird. Mentally (or physically) fly around and see where you like touching down.
What’s more, make sure you maintain a connection with something outside or “bigger than” yourself. Think about the kinds of hobbies, clubs, or activities you might enjoy doing and use that as a filter for the various communities you are choosing.
If you have no family or friends that can visit you regularly and help keep your spirits up and you have the financial resources to do so, consider hiring an aging life care professional who can have your back and catch deterioration in the quality of your care often before you can.
Manisha Thakor, CFA, CFP® is vice president of financial education at Brighton Jones. You can follow her on Twitter @ManishaThakor. This article grew out of a conversation between Manisha and Financial Planning. Read more: Planning challenge: Aging clients, no kids, assisted living required
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