There is the retreat that looks like the ads: ride a bike, travel, enjoy the family.
And then there’s the one where you can’t go up the stairs anymore.
Most of us plan happily first, when our health is good and our energy is high. The second can be difficult to envision, when health falters and medical crises can change lives in an instant.
Yet focusing only on the active part of retirement can hurt your quality of life once you start to decline, which is why financial advisers also suggest that you look at how you will live in the later phase. Here is what you should consider for this second step.
Envision the future
Certified financial planner Dana Anspach of Scottsdale, Ariz. Doesn’t want her clients to prematurely abandon their homes or take other actions that may not be right for them. A couple she counseled, for example, moved to a continuing care community – a community that includes independent living, assisted living, and nursing home care – in the 1980s and moved back to a new home. year later because they couldn’t entertain or decorate their apartment the way they wanted. (They used their refunded deposit to buy a condo and had enough money to pay for home care.)
Anspach has also heard horror stories of elderly people who were left in dangerous conditions for too long until health crises pushed them into hospital – and left their families scrambling to meet the costs, to their care and what to do with the family home.
The key, the planners say, is to start thinking and talking about how you want to cope when your health starts to deteriorate.
“You have so many more options if you plan ahead and set the course of where you want to go,” says Danielle Howard, CFP in Basalt, Colorado.
Howard starts with the slightly easier decisions like who clients want to make medical and financial decisions if they become incapable. Then the discussion moves on to the more difficult topics – imagining life when they can’t climb the stairs or drive or handle daily activities such as cooking, cleaning, dressing or bathing.
Could they stay in their current accommodation? Should it be changed? Who will provide their care and how will they pay for it?
Anspach advises clients who do not have dependence insurance or family members willing to provide care to save their home equity for such expenses, rather than using it to increase their retirement income. (Home equity can be leveraged with Credit lines or reverse mortgages or by selling the house.)
If parents expect children to help them, Anspach says, they need to make sure the children are on board and the lives of those children are stable enough to provide care if the parents come closer.
“You don’t want to move across the country and have them transferred elsewhere,” says Anspach.
Consider the needs of caregivers
Parents should also think about how they can make things easier for their caregivers, says Ed Vargo, CFP in Cleveland. Vargo encouraged his in-laws to move from one house at 20 minutes to another at five minutes.
“That 20 minutes can turn into an hour round trip, and you can go there several times a day,” says Vargo.
His stepmother, Rose Forrester, understood this dynamic well. Before retiring three years ago, Forrester was a physiotherapist who provided home care to older patients – and a caregiver to her mother, who also lived 20 minutes away. Eventually, Forrester and her husband, Dan, moved the elderly woman into their home, where she lived for three years until her death.
Then the couple started talking about what they should do to make things easier for themselves and their children in the years to come. Neither wanted to leave their four-decade-old home, but both realized that its stairs and layout would be difficult to navigate one day.
“I could have stayed 10 more years, but in 10 years I knew I wouldn’t have the energy to move,” says Forrester. The couple moved into a single-story ranch-style home three years ago, when he was 68 and 66.
Vargo now talks with his father to get closer. The older man initially rejected the idea, but after a few years of talking he said he was considering it now.
“People tend to tell others what to do. It doesn’t really work, ”says Vargo. “Have a discussion, share your concerns, but be patient. “
Liz Weston is a Certified Financial Planner and Columnist at NerdWallet, a personal finance website, and author of “Your Credit Score”. E-mail: [email protected]. Twitter: @lizweston.
This article was written by NerdWallet and was originally published by The Associated Press.