Dreams may come true, but not always.
Peter was one of my patients when I worked as a home health physical therapist. He was an 83-year-old man recovering from a second stroke who lived at home by himself, but still needed help with most household chores as well as with some personal care. Eventually, it became clear that he needed more help than was available to him at home. His living situation was not safe.
As we talked about the option of moving into an assisted living community, he told me about his financial situation. Unfortunately, a few years back, he had used all his savings to help his financially struggling son. He had no money left for his own care needs.
Peter did what any loving father wants to do: help his son. But was it in his best interest in the long run? Could he have helped his son in a way that would not backfire on him later when he needed that money?
When planning for retirement, whether you use the help of a financial advisor or you save on your own, always plan for the best and be prepared for the worst. The best may be going on a cruise every year or buying a condo in Hawaii. The “worst” could be needing to move into a senior care community.
Numbers can be scary
I am not a financial advisor; therefore, I won’t give you financial advice on how and where to invest your money or how to build a winning portfolio. But I can make you aware of the financial information that’s most important to keep in mind as you plan for both the expected and the unexpected of retirement. (These numbers are valid for the state of Oregon 2020. If you live in another state, it is easy to call around and get some quotes).
- Average monthly cost of room and board in an independent retirement community
- studio apartment: $2,300-2,600
- One-bedroom apartment:$2,900-4,200
- Average monthly price of an Adult Foster Home (in other states it’s called a care home or family care home), including care: $3200-$4500
- Average monthly cost of room and board in Assisted Living
- Studio apartment:$3200-4500
- One-bedroom:$4,500-$5,500
- Additional care:$800-1,200
- Average monthly cost in memory care: $5800-7000
- Additional care: $400-$1,500
On top of these, there are other expenses:
One-time community fee when moving in:$1,500-$4,000
Extra monthly expenses (toiletries, haircuts, adult disposable underwear, medical expenses, etc): $200-500.
In the state of Oregon, many senior care communities contract with Medicaid.If you run out of funds, they will keep you at the same level of care under the Medicaid pay. However, most of those senior care communities ask that you have at least one to two years of private pay before you transition to Medicaid. If you don’t have that kind of money, they will not accept you.
Can you predict your future?
Although you can’t predict what your health will look like at age eighty, there are a few parameters you can use to help you with planning for the retirement days.
How is your health now? Are you overweight? Pre-diabetic? A smoker? Do you have depression or high blood pressure? These health issues can increase your risk of experiencing debilitating conditions such as diabetes, dementia, strokes, or heart attacks.
And don’t forget your family history, especially with dementia. If you have close family members who had dementia, you may be at a higher risk of developing dementia yourself (especially if your lifestyle is not very healthy to begin with).
If you exercise regularly, eat healthy, sleep well, are at a healthy weight, and keep your life stress free, you’re more likely to keep your independence into older age. But remember, no one can predict the future with 100% certainty.
No one dreams of ending their lives in memory care or in an assisted living facility. But the prospect of an imperfect retirement doesn’t mean you should put your head in the sand. Ignoring the fact that dreams don’t always come true doesn’t make them come true. While no one has a crystal ball to predict the future, everyone should be smart about their retirement money.
Should you change your retirement dreams?
I am a mother of three boys, and, as such, I tend to think about my kids’ well-being before I consider my own. I, too, would love to help them pay their debts. But here’s the reality: if I ever need help and don’t have the funds to go into a good senior care community, the responsibility (and sometimes the burden) of taking care of me will fall on my kids’ shoulders. Therefore, if I have to choose between gifting them my money or keeping the money for a safe retirement and “gifting” them with the peace of mind that I will be well taken care of, I choose the latter.