Handling the High Cost of Caring for Aging Parents While Raising Your Kids

They’re often called the “sandwich generation,” squeezed between the costs and pressures of raising their own kids while caring for aging parents. If you’re a member of the sandwich generation, the name must seem especially appropriate. Today’s 40 or 50-year-old can very likely have parents in their 80s and kids in their teens or younger, with all the effort and stress those twin roles can bring.

We recently discovered this article from the financial site NerdWallet in which writer Kate Ashford addresses the challenges of caring for aging parents and growing kids. We hope these tips provide some encouragement as you deal with all the pressures your “dual roles” entail.

Caring for Aging Parents and Growing Kids Brings Anxiety

 Ashford begins her article with some startling stats: “Nearly a quarter of millennials are caregivers for an adult, according to a 2020 AARP survey. And a 2020 report from insurance marketplace GoHealth found that 1 in 3 millennials are supporting their parents financially, and more than a quarter help manage their parents’ health care.”

In practical terms, this means that many millennials are caring for young children as well as caring for aging parents, grandparents, or other aging loved ones. “That can take a toll,” Ashford writes. “Eighty-two percent of millennials worry about having enough money to support both their parents and themselves, according to GoHealth.”

If you’re in this sandwich generation and faced with a new financial landscape, resources are available to lessen the burden. Ashford gives us the following sources to help with such costs.

Caring for Aging Parents: Determine Available Resources

If you’re dealing with the costs of caregiving for a parent, the first place to look for assistance will be to see if they have any form of long-term care insurance. This coverage can help with either in-home care costs or assisted living and/or nursing home expenses.

“I’ve talked to a lot of caregivers who didn’t even know their loved ones had long-term care policies,” says Amy Goyer, AARP’s caregiving expert. “That can be very, very helpful.”

A reverse mortgage is also a possibility, if the person you’re caring for has enough equity in their home and they’re 62 or older. “A reverse mortgage provides a loan or line of credit based on equity in a home. But it’s not right for everyone,” Ashford writes.

“I always recommend talking to a financial advisor, especially someone who has a lot of experience with reverse mortgages, before you get into one,” Goyer says.

Caring for Parents and Kids: Explore Available Tax Strategies

Federal tax credits and deductions are often available for those who can claim their aging parent or loved one as a dependent, meaning they’ve provided over half of their financial support for the year.

“The child and dependent care tax credit can apply to seniors,” says Jill McNamara, senior director of online care marketplace Care.com. “This opens the opportunity for caregivers to save annually on their expenses related to in-home care or adult day care services. Additionally, there is the credit for other dependents, which allows caregivers access to a $500 credit.”

This can extend to medical expenses, too. Ashford explains, “If you’re paying your loved one’s medical expenses, you’re also eligible to deduct medical costs that exceed 7.5 percent of your adjusted gross income. This includes health care, prescription drugs and transportation for medical care, among other things. (See IRS Publication 502 for a full list.)”

Caring for Aging Parents: Investigate Government Assistance

Is your loved one a veteran? It’s worth checking to see if they are eligible for benefits through the Department of Veterans Affairs (check caregiver.va.gov). These benefits may include access to health care, medical equipment, and even home modifications.

“My dad was able to get all of his medications without a copay,” says Goyer. She also received help setting up hospice care for her father and getting a household ramp installed. “Never assume they won’t qualify. Keep asking the questions and find out. We got incontinence supplies, which is a huge expense,” she adds. 

Caring for Aging Parents: Medicaid Requires Careful Planning

If your loved one has a low income, Medicaid can help. But do your research; every state’s rules are different. 

“A note of caution: If you’re caring for a parent, don’t combine your money with your parent’s money,” Ashford warns. That’s because doing so can disqualify your parent from benefits.

“If a parent is ever going to need Medicaid, Medicaid has a lookback period,” says Pamela Wilson, a caregiving expert and speaker. “They don’t like combined accounts.”

Ashford continues, “A person needs to have a very low income and/or limited resources to qualify for Medicaid. If levels aren’t low enough, you may be able to plan a strategic spend-down of assets. Goyer recommends talking to a certified Medicaid planner (you can find one at cmpboard.org) or an eldercare attorney for advice.” Contact us and we’d be glad to assist you in your planning.

Caring for Aging Parents: Community Help to the Rescue

Thinking local can apply to caregiving, too. State or city programs local to your loved one could help with prescription drug costs, doctors’ bills, groceries, and other expenses.

“AARP offers links to state-by-state benefits available, and you can also check with your area agency on aging,” Ashford writes. “Caregiving advocacy organizations can be helpful. The Caregiver Action Network offers free advice by phone, email or chat at caregiveraction.org.”

The Caregiver Action Network’s CEO, Marvell Adams Jr., says, “Someone could call our help desk and say, ‘I just realized my mom’s copays for her prescription drugs have really eaten up a lot of her savings and she’s having difficulty paying them.’ And we say, ‘We can connect you with a copay assistance foundation.’”

Also of note, The National Council on Aging offers a Benefits CheckUp tool to screen for eligibility for hundreds of programs that can help with costs.

When Caring for Aging Parents, Talk to a Professional

Consulting with a financial planner is always a good first step to make sure you’re making the right decisions for your unique situation – and for the health of your financial future, too. “As a caregiver, we start paying for things and we get ourselves into a difficult situation,” Goyer says.

Ashford advises using two different planners. “I think it’s helpful to have someone who’s really looking at your picture,” Goyer says, concluding the article. “And help[ing] you make hard decisions that will, in the long run, protect you as a caregiver.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.nerdwallet.com)

New Research Links Poor Dental Care with Added Risk for Dementia

Everyone knows that good dental care is important. But could poor dental care actually increase the risk of dementia? Recent research says the answer may be yes. The important news for anyone with an aging loved one: oral health and brain health are interconnected.

With an aging population and increasing prevalence of Alzheimer’s disease and other forms of dementia, scientists are doing extensive research to find out what conditions can trigger cognitive decline. We know from other articles that we’ve featured here on the Blog that, while there seems to be no single dominant cause for dementia, the finger of blame has been pointed at everything from heredity to obesity to poor diet.

Now comes a study out of Finland, described in this 2022 article from HealthDay, that strongly suggests another culprit related to cognitive decline: poor oral health. The article, written by HealthDay reporter Steven Reinberg, explains that there is much more than a casual link between the health of your mouth and the health of your brain. While scientists are hesitant to suggest that bad oral health causes dementia, the statistics seem hard to ignore. The report was published one year ago in the Journal of the American Geriatrics Society.

Dental Care and Dementia: 47 Previous Studies Analyzed

“Gum disease” has never been a diagnosis any of us wants to get. But now, new research is indicating that the effects of this uncomfortable condition might be far more devastating than we thought, according to the HealthDay report.

“In a review of 47 previously published studies, researchers in Finland found that tooth loss, deep pockets around teeth in the gums, or bone loss in the tooth sockets was tied to a 21 percent higher risk of dementia and a 23 percent higher risk of milder cognitive decline,” the article states.

According to the report, tooth loss, which is an indicator of gum disease (also known as periodontal disease), has been linked to a 23 percent higher risk of mental decline and a 13 percent higher risk of dementia specifically.

“Maintaining adequate periodontal health, including retention of healthy natural teeth, seems to be important also in the context of preventing cognitive decline and dementia,” said lead researcher Sam Asher, from the Institute of Dentistry at the University of Eastern Finland in Kuopio.

Dental Care Essential for Cognitive Health of Seniors

The article acknowledges that it’s tough to draw a direct cause and effect connection. “Asher noted that the study can’t prove that gum problems actually cause dementia,” Reinberg writes. “Still, prevention and treatment of periodontal conditions are particularly important in older adults who are at increased risk for dementia.”

Asher said, “Our results also emphasize the importance of oral health care in people who already have some degree of cognitive decline or dementia. These individuals often develop difficulties with maintaining oral hygiene and using professional oral health services.”

Based on this research, says the article, Asher believes it essential for dentists be informed of these findings, adding, “Oral health professionals need to be particularly aware of early changes in periodontal health and oral self-care that often occur at older ages due to cognitive decline.” In other words, your dentist could be on the front lines of dementia detection.

Dental Care and Dementia: 10-15% of Adults at Risk

This is actually a widespread problem, says HealthDay. “About 10 percent to 15 percent of the global adult population has gum inflammation known as periodontitis, the researchers pointed out in background notes.” In severe cases, it leads to tooth loss. What’s more, prior research has linked this condition to heart disease and diabetes – but not necessarily dementia.

Asher adds, “Future research needs to focus on providing higher-quality evidence to help both the general public and dental health care professionals with more specific oral health care strategies to prevent dementia.”

Dental Care and Dementia: Inflammation Could Be One Culprit

Dr. Sam Gandy, who did not take part in the study, says that there appears to be a link between different types of inflammation in the body—including gum disease, herpes, IBS, and others—and inflammation in the brain. “These associations do not necessarily involve direct invasion of the brain by microbes, but we still understand relatively little about the molecular basis for how systemic inflammation aggravates brain inflammation,” he told HealthDay.

But more research is required in this field to really understand the correlation. Treating gum disease, for example, doesn’t seem to improve the condition of Alzheimer’s patients, but it does affect markers linked to Alzheimer’s.

“This sort of result, taken together, raises the possibility that biomarkers may, at least under some circumstances, be misleading. There is still no acceptable substitute for the large, long, expensive, randomized clinical trials in which meaningful clinical benefit can be established,” Gandy says.

Dental Care and Dementia: Some Remain Skeptical

Not everyone is convinced by this study’s linking of inflammation and brain decline. Dr. Jeremy Koppel, a geriatric psychiatrist, points out that correlation and causation are not the same thing. “You don’t know if they got the periodontal disease because they have Alzheimer’s or they got Alzheimer’s because of the gum disease,” he says.

Koppel also points out that the study indicates that the risk for dementia from periodontal disease is very low. “The risk may be pretty much neutral when compared with known risks for the disease,” he says, and those risks include smoking and unhealthy diet.

While he remains skeptical, Koppel doesn’t completely discount the important of oral health as it relates to dementia and cognitive decline.  “People are interested in looking at the saliva for biomarkers of the proteins in the brain that are related to Alzheimer’s,” he says, and adds, “But whether the mouth may have other secrets hasn’t really been explored.”

Our take-away: if you’re caring for an aging loved one, take a comprehensive approach to the prevention of cognitive decline. Along with their other health needs, don’t ignore regular dental care.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at https://consumer.healthday.com)

Try These Mental Health Tips to Manage Depression and Anxiety

Are you a senior managing depression and anxiety? If you are, then you’re hardly alone. While precise figures are hard to quantify, the CDC estimates that as many as 13 percent of seniors suffer with depression, and the figures for anxiety may be even higher.

Managing depression and anxiety is a burden no one should have to bear alone. Untreated, these conditions can lead to isolation and substance abuse, ultimately robbing you of years of joyful living. If you’re facing depression and anxiety, or have a loved one who is, we have some encouraging suggestions for you drawn from this article recently published  by NextAvenue.

Writer Paul Wynn reports on this important topic from the first-person point of view of a woman who has been there. We think her experience and recommendations can be a huge help to those managing depression and anxiety. Take a look and see if you agree.

Managing Depression and Anxiety After a Debilitating Stroke

Wynn first introduces us to Angie Read, 46, who survived a massive stroke, thanks to her husband’s quick action to call 911 and get her to the hospital. “But after the stroke that could have killed her, she faced an even more formidable opponent: debilitating depression and anxiety,” Wynn writes.

Read says she has coped with anxiety—though relatively mild—since her early 30s. But the stroke made her anxiety symptoms worse and introduced her to depression for the first time. Wynn writes, “She felt numb to the world at the height of her suffering despite wanting to be there for her kids and husband and return to her marketing career.”

Managing Depression and Anxiety: a Long Process

For Read, therapies of various types were the path to managing the effects of the stroke, both physical and mental. Through occupational and speech therapies, as well as talk therapy, in-patient mental health facility visits, and medications, Read has experienced close to the full spectrum of therapeutic recovery. She put her experiences into a book called Invisible Scars: Stroke Survival, Recovery, and the Unexpected Mental Health Fallout.

“These tips worked for me, and even if just one or two of them work for others and help them feel better, then that’s a positive step forward,” Read says.

Tip #1 for Managing Depression and Anxiety: Journaling

Read was initially resistant to journaling. Even though she likes to write, she didn’t think she would enjoy writing about feelings.

“My therapist suggested that I try it and I was reluctant, but once I got started it was easier and more helpful than I ever expected,” she says. “It’s an opportunity to write about what you’re grateful for and things you like about yourself. You can write, draw, doodle and write poems — just let your feelings out and capture positive self-talk.”

Journaling has several benefits, including reducing anxiety and stress and promoting better sleep. It can also help you to prioritize the concerns that arise in your daily life, track symptoms, and recognize patterns and triggers.

“Read recommends taking a few minutes every day to write in a journal, but keep a pen and paper handy throughout the day if there’s something to write down,” Wynn writes. “If you like keeping everything on your smartphone, there are phone apps for journaling, such as Daylio, Day One and Penzu.”

Tip #2 for Managing Depression and Anxiety: Meditation

Before you skip this section because you think meditation is too “new age”, Read asks you to reconsider. She also was very resistant to meditation at first, but found it a very helpful tool in her toolbox to manage her depression and anxiety.

There’s no “one size fits all” rule for meditation either. There are lots of types, each with the same goal of reducing the noise in your head by promoting mental and emotional focus.

“According to a study in JAMA Psychiatry, mindfulness-based stress reduction (MBSR) was comparably effective to the antidepressant escitalopram (Lexapro) in reducing stress and anxiety in 276 people diagnosed with anxiety,” Wynn writes. “How to get started with meditation? Find a comfortable place to sit quietly and still your mind for a few minutes. Try to keep your mind focused on observing feelings and sensations. Try these phone apps to help guide you through a meditation session: Calm, Head Space and Healthy Minds Program.”

Tip #3 for Managing Depression and Anxiety: Exercise

“Research shows that people who exercise regularly have better mental and emotional well-being,” Wynn writes. “Exercise also helps treat some mental health conditions like depression and anxiety. In fact, for mild to moderate depression, research suggests physical activity can be as effective as antidepressants or certain types of therapy, according to a study published in the British Journal of Sports Medicine.”

Read found this to be true as well. When her psychiatrist prescribed antidepressants, he also prescribed 30 minutes of daily exercise. So, she started with 10 minutes on the treadmill. She recalls, “The first few weeks were a massive undertaking, but he was right. I eventually increased my treadmill time to 15 minutes and eventually to 30 minutes a day. I’ve now run a few 5Ks and hopefully will run more in the future.”

Tip #4 for Managing Depression and Anxiety: Enjoy Nature

You’ve no doubt heard it before, but it bears repeating: fresh air really does work wonders on your overall mood and health – whether that’s going for a walk in the park, strolling the beach, or even exploring your own neighborhood. This can be particularly helpful for isolated seniors.

“Sunlight, fresh air — and even the mood-boosting aromas from grass, flowers and trees — nourish our bodies, minds and souls,” Wynn writes. “Spending time outdoors can have many positive effects including improving your mood, reducing stress and anger, improving your physical health, boosting your confidence and self-esteem and reducing loneliness.”

And, if you experience seasonal affective disorder (SAD)—which, incidentally, is very common in the Pacific Northwest, where Aging Options is headquartered—being outside in the natural light can go a long way to alleviating your symptoms and making the long winter months more bearable.

Tip #5 for Managing Depression and Anxiety: Music Therapy 

“The benefits of music therapy have been widely studied in those living with depression,” Wynn writes. “A 2017 Cochrane Review examined nine studies with 421 people that compared the benefits of music therapy with and without psychological or talk therapy. Researchers found that music therapy with treatment compared to treatment alone was more effective in reducing symptoms of depression and improved participants’ involvement in work, activities and relationships.”

For Read, this means listening to upbeat music as she gets ready in the morning. “This can temporarily transport you elsewhere and give you a short break from your concerns, just like reading a good book,” she says. Many studies also point to the power of music to improve some symptoms of cognitive decline, as we’ve written about here on the Blog.

Tip #6 for Managing Depression and Anxiety: Eat Well

Eating a balanced diet has an incredible array of benefits, and not just for our physical bodies, but for our minds as well. Eating well helps us to think clearly, concentrate, and be more alert and attentive. Seniors living alone are especially prone to letting good eating habits slide.

 “On the other hand,” Wynn warns, “a bad diet can lead to fatigue, stress and our capacity to work over time. Processed foods are high in flour and sugar and train the brain to crave more of them rather than nutrient-rich foods.”

Read’s suggestion for improving your mental health through your diet includes eating more fruits, vegetables, and foods rich in omega-3 fatty acids. Dark green leafy vegetables protect the brain, along with nuts, seeds, and legumes (like beans and lentils). And paying attention to how the food she eats makes her feel is essential. She says, “It’s helpful to write in a journal what you’re eating to gain insight into your eating patterns.”

Tip #7 for Managing Depression and Anxiety: Get Better Sleep

Chronic sleep problems can make managing depression and anxiety—along with other mental health issues—so much more difficult. “About three-quarters of depressed people show signs of sleep problems, according to one study,” Wynn writes.

Read struggled with horrible insomnia during her lowest points with depression and anxiety. “The sleepless nights fueled my anxiety and depression to the point of requiring in-patient mental health care help,” she says. Prescription sleep medicine eventually helped her to get regular rest.

Wynn shares the following tips for better sleep: “Go to sleep at a consistent bedtime every night, wind down with relaxation techniques like journaling or meditation, avoid alcohol, caffeine and other stimulants in the early evening, and turn off TVs and smartphones close to bedtime.”

Tip #8 for Managing Depression and Anxiety: Busy Hands

Wynn writes, “According to researchers, activities that use your hands and do repetitive tasks relieve stress and help solve problems and clear our minds. Read suggests finding something you love to do that requires using your hands, even if it’s only for five or 10 minutes a day. This could mean cooking, folding laundry, crafting, gardening or writing in a journal.”

In Read’s case, her therapist recommended taking up a new hobby, like knitting. She did try this, but her hand-eye coordination after the stroke made it difficult. So instead, she plays with doing her makeup, as well as writing. “When I’m doing these activities, I zone out and forget my worries,” she says. “Try to combine the joy of working on a favorite project with keeping your hands busy, and you’ll likely notice you’re calmer and more relaxed.”

Tip #9 for Managing Depression and Anxiety: Establish a Routine

While many of us have a sort of routine built into our days between work and/or school and family obligations, it can be helpful to the anxious mind to build an even stronger routine for our tasks, habits, and cultivating relationships.

“Read realized how important a daily routine is to her state of mind,” Wynn writes. “About a month into the pandemic, when Read started working from home full-time, she started a ‘fake commute.’ Rather than just rolling out of bed and into her desk chair, she showered, changed, fixed her hair and makeup, and got in her car to drive halfway downtown and return home.” 

Read explains, “For me, restoring this piece of my former routine helped me balance my mental health during a difficult transition period. And when I told my psychiatrist what I was doing, he said it was brilliant and started suggesting the ‘fake commute’ to his other patients.”

Tip #10 for Managing Depression and Anxiety: Talk It Out

When managing depression and anxiety, finding people you trust to talk to about your feelings is paramount. “Read says that talking to someone can help you feel less alone, help lighten the load of your concerns, and help you look at your circumstances differently, making them easier to handle,” Wynn writes. “Talk therapy with doctors or therapists is a safe place to discuss feelings and emotions, but it’s also important to find family and friends with whom you can share your feelings.”

And Read’s wisdom concludes the article, saying, “I don’t advise talking to someone who can’t empathize with or understand your situation. Seek out those who are good listeners and will sympathize with your situation.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.nextavenue.org)

Do You Need a Revocable Trust? 4 Reasons the Answer Might be Yes

The topic of trusts versus wills can be confusing, especially when a term like “revocable trust” is tossed into the mix. Many of us might shy away from asking our attorney if a revocable trust is right for us, simply because we may not understand what the term means.

But here at the Blog, one of our goals is to take some of the mystery out of retirement planning. That’s why we’re bringing you this recent article from Kiplinger in which Virginia financial planner Evan Beach takes on the task of giving us a simple four-question test that can answer the question, ”Is a revocable trust right for me?”

A Revocable Trust – the Basic Definition

While we appreciate Beach’s article in Kiplinger, we noted that he doesn’t really explain what a revocable trust actually is. For that we turned to another source.

As this article from NerdWallet explains, a revocable trust is also known as a living trust, revocable living trust or inter vivos trust. (The term inter vivos basically means “between the living.”) The NerdWallet article says, “It’s an amendable legal document that creates a separate legal entity and allows the creator — or grantor — to retitle assets in the name of that entity, or the trust. The grantor selects a successor trustee to manage those assets on behalf of the grantor and their named beneficiaries.”

That’s a bit of a legal mouthful. But the important thing, NerdWallet says, is that with a revocable trust, the one who created the trust can change the terms or dissolve the trust at any time. Because of this flexibility, the article states, assets within the trust are still considered owned by the one who placed the assets into the trust, so a revocable trust does not bring the potential tax benefits of other types of trusts.

Assets in a revocable trust are also vulnerable to creditors making claims against the trust to recover unsatisfied debts – something to consider.

A Revocable Trust is Not a One-Size-Fits-All Solution

Beach begins his Kiplinger article with implied criticism of how revocable trusts are “sold” to clients. “Imagine walking into a car dealership and asking the salesperson whether you need a car,” Beach writes. “The salesperson would answer with assurance: ‘Of course you need a car! The only question is which one on our lot you are going to buy.’”

He suggests that some estate attorneys take the same cookie-cutter approach. “No matter who you are or what your situation, the attorney is very likely to tell you that you need a revocable trust,” Beach says. “This is a one-size-fits-all answer, and you should not proceed with caution.”

Nevertheless, Beach is quick to add that there are several situations in which a revocable trust makes sense. Here are four such situations, he says, why this might be so for you.

Using a Revocable Trust to Avoid Probate

Is avoiding probate a good reason for a revocable trust? Beach says it might be.

“When prospective clients approach me, insisting they need a trust, it’s typically because of a good or bad experience they had because of a trust or lack thereof,” he states. “Maybe a parent had a trust and things passed very smoothly. Or maybe their parents didn’t have a trust, and they had to deal with the probate courts in a tough jurisdiction.”

Beach argues that probate avoidance is a legitimate reason to set up a trust. “If you plan to pass assets through your will, it will go through probate,” he writes. “Probate is a court-supervised process of distributing the decedent’s assets. It can be, depending on the jurisdiction, expensive and time-consuming.”

Beach then gives a specific example of the locale where he lives. “If you own assets in multiple states, this can be especially important,” he advises. “My office is in Virginia, but from my office window, I can see D.C. and Maryland. If I own a rental property in Maryland and die, my family will go through probate here in Virginia and ancillary probate in Maryland. A revocable trust that owns both properties solves that problem.”

If you’re in a similar situation with assets in multiple jurisdictions, you need sound legal advice. The professional team at Life Point Law stands ready to assist.

Using a Revocable Trust to Control Release of Assets

A revocable trust can be a good device to solve a challenging family situation. “Imagine a scenario where two of your kids are great with money, but the third, not so much,” Beach writes. Many families face this same dynamic, where different adult heirs are, as Beach puts it, “going to do very different things with the same inheritance.”

How does a revocable trust work for this situation? “The most common way that revocable trusts control this challenge is to release a certain percentage of assets once the beneficiary hits certain ages,” Beach explains. But this isn’t the only way a revocable trust can solve the problem.

“Along with the benefit of control comes flexibility,” says the article. “The trust I have in place would allow for annual distributions only up to the amount that my beneficiaries save each year. What kind of financial planner would I be if I didn’t incentivize saving?” In other words, the terms of the revocable trust give you plenty of planning options.

Using a Revocable Trust to Ensure Your Privacy

“Putting together an estate plan can be a very emotional process,” Beach observes. “Ideally, there won’t be too much disagreement among the parties, and you will land with a plan that executes your wishes.”  But odds are you prefer not to broadcast those wishes to the world. “Your wishes are typically something you keep private except from those who have some role or benefit in the plan,” he adds.

This is an area where a trust can be better than a will. “If you plan to pass assets through a will, just remember that most of the time, that will becomes public once the probate estate is closed,” Beach warns. “So, if you left one of your kids out, left your favorite a bit more or are just a private person, you may be better off with a trust.”

Using a Revocable Trust to Plan for Future Incapacity

Planning ahead for a time when you can’t manage your own affairs can be a major motivator to create a revocable trust.

“The scenario that no one expects or wants does, unfortunately, occur sometimes,” Beach says. “If your bank accounts are titled only in your name, this can become a nightmare for simple tasks like paying your bills.” Having a revocable trust in place can create continuity and simplicity in managing financial matters.

“In the case of the trust, you will name a successor trustee who will manage the assets in the trust according to the terms of the trust should you become incapacitated,” Beach explains. “This can happen immediately rather than going through the legal process of seeking guardianship or conservatorship.”

Does everyone need a revocable trust? Beach is quick to say no – but it might be a good tool for you. We urge you to contact us, or the estate planner you rely on, to walk you through your options.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.kiplinger.com)

Maximize Benefits by Avoiding the Top 3 Social Security Mistakes

Are you in danger of committing the top three Social Security mistakes? Do you even know what the top three Social Security mistakes are? If you don’t, you’re not alone. With 10,000 boomers turning 65 every day, millions of people each year are coming to grips with the intricacies of Social Security – and many of them will commit one or more of the top three Social Security mistakes as they make their plans.

But you don’t have to be one of them. As proof, we offer this recent Kiplinger article in which California financial planner Vincent Birardi presents what he says are the top three Social Security mistakes. We’ll take a look and see if he’s right.  And by the way, it’s appropriate that we take up this topic: just a few weeks ago, Social Security celebrated the program’s 88^th birthday. Let’s hope our friends in Congress do their work so the program will be intact in another 88 years!

Social Security Mistakes Can Slash Benefits

Birardi writes, “As Social Security commemorates its 88th year, here are a few things to keep in mind when you start thinking about claiming benefits.”  First, he states, the very longevity of the program is cause for celebration: after 88 years, “we can revel in the fact that millions of Americans have been afforded financial protection in their retirement years.”

But there are storm clouds on the horizon. “Unfortunately,” says Birardi, “that level of protection has waned due to several factors, including longer average life spans, a shift in the balance of contributions and the withdrawing benefits of the Social Security system.” All that makes it essential to avoid mistakes that can cost you money.

Social Security Mistakes Can Affect 80% of Seniors

Birardi reminds us that Social Security was never intended to pay for all – or even most – of retirement. “Ideally, Social Security benefits serve as one of several retirement sources,” he states, “alongside employer-sponsored retirement plans such as 401(k)s and personal accounts such as IRAs. However, it serves as the primary (and some cases only) income source for many retirees.”

To prove his point, he quotes stats from the National Academy of Social Insurance (NASI) that put the over-reliance on Social Security into stark perspective. According to NASI:

• Over eight in 10 Americans age 65 and older receive Social Security.
• For over three out of five (61 percent) of those beneficiaries, Social Security is more than half their total income, and for one in three (33 percent), it is all or nearly all of their income.

“Since so many people rely so heavily on Social Security, it’s imperative to make the most of this income,” Birardi observes. Here’s his list of the three big mistakes to avoid when claiming your benefits.

Social Security Mistake #1: Claiming Too Soon

“The most common mistake is claiming your benefit too soon,” Birardi argues, “or collecting your monthly benefit at a rate that’s lower than you would be entitled to receive had you waited until a future date.” (We wrote about this concept here on the Blog just recently.)

Why do people fall into the trap of grabbing benefits too soon? It’s really human nature. “Reasons for committing this misstep range from a combination of being unfamiliar with the various benefit options available, blindly following when others in your circle have claimed their benefits and succumbing to the widespread but misguided fear that ‘Social Security will go bankrupt soon.’” Birardi writes. Many would rather have a little cash now than a bigger benefit later.

This is one case, says the article, where knowledge is power. “To avoid falling prey to this mistake, first find out what Social Security benefits you can expect,” says Birardi. The place to start is with your “full retirement age,” sometimes abbreviated FRA.

“For anyone born in 1943 or later, your full retirement age, as defined by the Social Security Administration, is between age 66 and 67, based on your birth year,” the article advises. “If you’re contemplating retiring before that, it’s important to know that the Social Security program has been orchestrated to incentivize beneficiaries to delay claiming benefits.”  

In practical terms, because your lifetime annual benefits are decreased by about 8 percent for each year prior to your full retirement age you start to claim them, you “lose” 8 percent for each year between age 62 (the earliest claiming year allowed) and your FRA. This reduces your monthly payment by as much as 30-40 percent. But the opposite is also true, says Birardi: “your lifetime annual benefits increase by the same 8 percent for each year past your full retirement year if you delay claiming them — until the month in which you turn age 70, at which time your benefit has grown as large as it can.”

Online tools can help you with these calculations. “The Social Security Administration has created an easy-to-use tool for calculating your reduced estimated annual benefits if you choose to begin claiming your benefits before you reach your full retirement age,” says the article. “Using this table, you can also view what you’d gain percentage-wise by postponing retirement.”

Social Security Mistake #2: Forgetting About Taxes

Social Security benefits are tax-free, right? Wrong. Failing to recognize that Social Security benefits may be taxable is mistake #2, and it can be an expensive one if you base your retirement budget on pre-tax assumptions. But the portion of benefits that are taxable varies depending on annual income and tax filing status.

We don’t have space to go into detail, but tax rates are explained here on the IRS website.  Bottom line: if your income plus half your Social Security benefit exceeds $25,000 for singles and $32,000 for couples, then part of your Social Security may be taxable. The taxable percentage of benefits rises with income. Most taxpayers will find that 50 to 85 percent of Social Security benefits will be subject to taxation at the rate determined by your tax bracket.

Social Security Mistake #3: Forgetting COLA

If taxes are the downside of Social Security benefits, the annual cost-of-living adjustment – COLA – is the upside. Unlike many retirement accounts and pensions, Social Security is indexed to inflation. Overlooking the fact that your benefit amount will increase over time is the third Social Security mistake cited by Birardi in his article.

“For 2023, the COLA was 8.7 percent,” he writes, “meaning for someone who received $10,000 in Social Security benefits in 2022, their 2023 annual benefit would total $10,870.” While the 2024 COLA won’t be announced until later this year, based on current inflation rates, the figure will be significantly lower than this year’s, probably in the 3 percent range.

“The ever-fluctuating nature of Social Security benefit payments (and thus your household income) underpins the importance of creating and sticking with a spending budget to help ensure a comfortable retirement,” Birardi advises. “If you are approaching your retirement years, these are important factors to consider now, as they might impact when you take Social Security.”

We would add that this is also a great reason to have a financial dashboard in place as Rajiv so often advises. Contact us and we’ll recommend a qualified, objective planner who will advise you about Social Security and all other aspects of proactive financial preparation.

“Remember,” Birardi concludes, “that Social Security is meant to provide additional financial support so you can live your retirement years comfortably. With some thoughtful planning and assistance from the aforementioned professionals, such a life for you is very much achievable.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.kiplinger.com)

In the News: Aaron Paker

Have you heard the latest about Attorney Aaron Paker? He was named partner at Life Point Law earlier this year, and he received a major honor from the King County Bar Association last month. Catch up on all the latest news about Aaron.

Earlier this year Aaron Paker was named partner at Life Point Law. Aaron joins founder Rajiv Nagaich at the helm of the Federal Way-based elder law and estate planning firm. Aaron providews legal expertise on a wide range of client issues with a focus on Medicaid planning, crisis planning, and probate-related matters.

“Aaron has been a valuable addition to the Life Point Law team,” said Rajiv Nagaich. “This partnership will enable Aaron to play an even greater role in the firm’s success.”

Aaron came to the practice of law after fourteen years in early childhood education, where he worked with special education communities. He joined Life Point Law in 2015 as a paralegal. Encouraged by Rajiv Nagaich to pursue a law degree, Aaron attended law school in the evenings, passing the bar in 2020 after completing his J.D. at Seattle University.

“After meeting Rajiv Nagaich, I realized that becoming an elder law attorney would give me a way to fight for the people who truly needed my help,” Aaron said. “I consider elder law to be a calling, and I am grateful for the opportunity to play a larger role in Life Point Law as partner.”  

Just a few months after his elevation to partner, Aaron was selected as the 2023 Outstanding New Lawyer of the Year by the King County Bar Association’s New Lawyer Division. Announced each June, the award is open to all practitioners in their first ten years of practice.

Aaron goes above and beyond to serve his clients. He regularly logs more than 500 miles of driving a week to visit his clients in their homes. He works exclusively in fixed fee arrangements to guarantee his clients predictable costs and allow himself to provide stellar service without breaking their banks. He frequently publishes articles in professional publications, appears on the radio to answer elder care and estate planning questions, and has published a free Medicaid guide, of which he has distributed almost one thousand copies, with a goal of distributing another one thousand over the coming year.

“Aaron is one of the few attorneys who sees his mission to help his clients in any way he can,” said one of the attorneys who nominated Aaron for the New Lawyer award.

We couldn’t agree more. Congratulations, Aaron!

Overdose Deaths of Older Americans Quadrupled in the Past Two Decades – and Most Were Accidents

Just a few months ago here on the Blog, we brought you this troubling story about a problem called “polypharmacy” – a situation we described as “a chronic case of nationwide medication overload.” Now a new report shows just how dire the consequences of poorly-managed prescriptions can be.

In our earlier Blog post published last February, we cited this recent article from the NextAvenue website, written by freelance journalist Barbara Mantel. “The trend of doctors over-prescribing prescription drugs to seniors isn’t new, but it is on the rise,” we wrote at the time. “Research shows that seniors who take too many prescription drugs are at far greater risk of severe side effects that can lead to hospitalization and even death.”

Tragically, that prediction has proved to be accurate, as this new article just published in the Washington Post will attest. Written by reporter Linda Searing, the report reveals that drug overdose deaths among U.S. seniors quadrupled between 2002 and 2021, with at least part of the blame due to multiple prescriptions. Only about 1 in 8 of the overdoses was intentional, the data shows. Moreover, while some deaths involved illicit drugs, many were the consequence of poorly-handled prescription drugs.

Older Populations Are Taking More Drugs Than Ever

In the February article, NextAvenue reporter Mantel revealed that over 40 percent of Americans age 65 and older take five or more prescription drugs (the definition of polypharmacy).  That percentage has tripled over the past two decades. Almost 20 percent of older adults take ten drugs or more.

There are several reasons for this epidemic of over-prescription, and we suggest you check out the original Blog article for details. The problem, as we wrote at the time, is that older Americans are particularly susceptible to polypharmacy. Because aging can increase the risk of developing or worsening chronic conditions, multiple medications are sometimes necessary, but the risks are frightening.

“Research shows that each additional medication raises a person’s risk of suffering an adverse drug event by 7 to 10 percent,” said reporter Mantel. “Such events send as many as 750 older Americans to the hospital each day.”

Stunning Rise in Senior Overdose Deaths

Turning to the more recent Washington Post article, we can see just what the consequences of mishandling prescription drugs can look like.

Reporter Linda Searing quotes this troubling statistic at the top of her article: “Overdose fatalities among older Americans climbed in recent years, with 6,702 U.S. residents 65 and older succumbing in 2021, according to research published in the journal JAMA Psychiatry.”

According to data from the Centers for Disease Control and Prevention, the rate of fatal overdoses in the 65 and older age range has quadrupled. What was 3 deaths per 100,000 people in 2002 has climbed to 12 deaths per 100,000 people in 2021. “Data indicates that 83 percent were accidental, 13 percent were intentional (suicide), 4 percent were undetermined and 0.07 percent (five deaths) were homicides,” Searing writes.

Among those who overdosed, the type of drug involved was also notable: 57 percent of the deaths involved an opioid, 39 percent involved a stimulant, and 18 percent involved a mix of both. “Of unintentional overdoses,” Searing continues, “74 percent stemmed from illicit drugs, such as fentanyl, heroin, cocaine or methamphetamines. But 68 percent of intentional overdoses involved prescription drugs, such as antidepressants, antiepileptics, benzodiazepines, sedative-hypnotics and opioids.”

Opioid Dangers on Top of Too Many Prescriptions

This is where the connection to polypharmacy comes in. The study noted that half of Medicare enrollees now take four or more prescription drugs every single day. Older adults are also likely to be prescribed opioids to help alleviate their chronic pain or recover from surgery, according to the Administration for Community Living, a division of the U.S. Department of Health and Human Services.

“This can be problematic,” Searing writes, “because medications can have a stronger effect in older people and drugs leave their systems more slowly than they do in younger people. The CDC reports that the number of drug overdose deaths is larger among younger adults, but the overdose death rates are increasing the fastest among those 65 and older.”

She adds, “The researchers say their study’s findings illustrate the need for more mental health and substance-use programs aimed at older people.”

Rajiv: Seniors Need the Right Physicians for Proper Care

“The American healthcare system is a study in opposites,” Rajiv Nagaich says in response to this story. “On one hand you have the best research facilities, the best medical schools, and the most sophisticated biotech industry in the world. But on the other hand, we’re chronically over-prescribing medicines as if a pill were the answer to every ill. We’re not living longer, healthier lives. Where is the disconnect?” he wonders aloud.

In Rajiv’s view, there are many culprits in this sad equation. “Let’s face it,” he states, “much of American health care revolves completely around the health insurance industry and the pharmaceutical industry. These multi-billion-dollar companies make a lot more money keeping you sick than keeping you well. What that means,” he adds, “is that you can’t wait around for a magic pill or a magic surgery or a new government program to help you preserve your health. This is one area where you have got to take charge of your own longevity!”

Rajiv’s recommendations: find the right physician, ideally a board-certified geriatrician who understands the physiology and psychology of aging. Make sure your health insurance plan doesn’t just treat you when you’re sick but also helps you stay well. “And for heaven’s sake,” says Rajiv, “you know you need to get some exercise, stay socially engaged, and eat right. The best time to start is ten years ago – the second-best time is today! No more excuses!”

Contact us and we’ll help you get the right answers when it comes to finding the right doctor and staying well. We can’t solve the problem of out-of-control prescriptions, but we can take charge of our own healthcare. It’s about time we did.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.washingtonpost.com)

Financial Experts Advise, if You’re Retiring and Need a Home Loan, Get One While You’re Still Working

Are you 65 or older and still making mortgage payments? You’re not alone. Recent statistics from LendingTree show that roughly 10 million homeowners 65-plus are still paying on their mortgages – about 1 older homeowner in five. As nice as it would be to have a paid-off home in retirement, that goal remains elusive for plenty of aging homeowners.

However, that statistic assumes that, if you’re still making payments at age 65 or older, you already had that mortgage when you retired. But what if you’re already retired and you’re looking to take out a mortgage to buy that condo or retirement dream house, or even to get a home equity line of credit (a HELOC)? You might assume that your excellent credit rating and solid retirement assets would make the approval process a snap.

If that’s your assumption, you could well be in for an unpleasant surprise, as we learned from this recent column by financial reporter Liz Weston. (Weston writes for NerdWallet but we ran across this column in the Seattle Times.) She reports on a well-to-do retired couple who recently found that qualifying for a HELOC to fix up their St. Louis-area home was harder than they thought. Our first reaction was, if these guys can’t qualify, who can? Our second take-away: as Weston suggests, if you hope to get a mortgage in retirement, it might be wise to do all you can to obtain it before you stop getting a regular paycheck.

Turned Down Twice, Despite Excellent Financials 

“Retired engineers Kelly and Derek Barkey assumed they would be approved when they applied for a $50,000 home equity line of credit two years ago to fix up their new house,” Weston writes. The couple, now 56 and 59, had sold their Southern California home and paid cash for a St. Louis home worth $850,000. On paper they looked like a shoo-in for the loan, with $3.5 million in combined retirement and brokerage accounts. Their FICO scores were excellent.

“They were surprised when a national bank turned them down,” says Weston. “They tried a local credit union, which also rejected them.”  Kelly Barkey told Weston with a touch of irony, “We haven’t been turned down for credit since about 1987,” back when she was still in college.

Why Are Home Loans Harder to Get in Retirement?

The first impulse might be to accuse the lenders of age discrimination, but the issue is actually more straightforward than hidden bias. “The federal Equal Credit Opportunity Act prohibits lenders from discriminating against applicants based on age,” says Weston, “but that doesn’t mean getting a home loan in retirement will be easy even for those with good credit, little debt and plenty of savings, financial planners say.”

So, what’s the hold-up? Weston spoke with the AARP’s Lori Trawinski, who told Weston that the issue is often demonstrating that you have enough steady income to repay the loan. Proving uninterrupted income is sometimes tougher for retirees than for those actively working.

Proving you get a paycheck is simple for those employed. “Working people can use W-2 forms and pay stubs to prove they have sufficient income,” says Weston. “Lenders can verify incomes through IRS transcripts, by calling an employer or using massive paycheck databases such as The Work Number (explained in this 2022 NerdWallet column). Lenders typically want to see two years’ worth of steady income, but working borrowers aren’t required to prove that their incomes will continue at the same rate.”

The rules are more complicated for retirees, says AARP’s Trawinski. “In addition to proving they have enough income to pay the loan, retired people often must prove that the money will continue for at least three years, she says.”

Mortgage Lenders See Two Types of Retirement Income

The Barkeys, as Weston explains, have plenty of income, at least on paper – a combined $70,000 annually from their taxable brokerage account plus consulting income.  That’s “more than enough to support the payments on a $50,000 home equity line,” Weston observes. “Yet they were told their applications had been rejected because of ‘inadequate income.’”  AARP’s Trawinski blames automated underwriting software for the failure to properly account for the couple’s cash flow.

The challenge, according to the article, is that lenders see two types of retirement income. “Mortgage lenders typically divide retiree income into two categories: income with a potential expiration date and income without,” Weston writes. “Pension payments and Social Security retirement benefits based on an applicant’s work record don’t have an expiration date because the income continues for life. By contrast, retirement and investment accounts often are viewed as having an expiration date because the accounts can be depleted over time, so borrowers must prove the income will continue for a minimum of three years.”

Weston goes into a bit more detail than we have space for to explain how lenders might consider the value of retirement accounts. But in the case of the Barkeys, their young age worked against them: when they originally applied for the HELOC, both were under 59 ½. That meant they couldn’t tap their retirement accounts without a costly penalty. In other words, the $3 million in those accounts could be effectively ignored by mortgage underwriters.

What’s the Answer to Home Loan Approved for Retirees?

One planner with whom Weston spoke, Kayla Johnson of Wilmington, North Carolina, said that it “takes a lot of financial gymnastics” to get mortgages and HELOCS approved for retirees without sufficient steady income.

“[Johnson] recommends people apply for home loans while they’re still working, if possible,” Weston writes. “It’s simplest to secure any loan you may need before retirement.”

But she has good advice for current retirees. “People who need home loans and are already retired should consider talking to a loan officer about their situations before submitting an application and risking damage to their credit scores,” Weston advises. “Such a conversation can help potential applicants get a better feel for how the lender will view their application and how many hurdles lie ahead.”

Remember, Weston reminds us, “Not all lenders are equally skilled at dealing with retired clients, so you may need to talk to more than one lender to find the right fit. And if you’re turned down, don’t consider that the last word.”

That’s the tack the Barkeys took, and it paid off. They reached out to the president of the credit union to find out why they had been rejected. “Soon afterward,” says Weston, “they got a call from the loan department manager admitting the credit union had ‘overlooked some things.’”  Within a day, says Kelly Barkey, the HELOC was approved.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.seattletimes.com)

If You’re Updating Your Estate Plan, Watch Out for These Five Most Common Mistakes People Make

The most important bit of advice we can offer about your estate plan is to have one. The second most important advice: keep it up to date. Your circumstances will inevitably change as your life goes on, and odds are those documents you had prepared back when the senior George Bush was President could stand a good review.

Sadly, it’s not at all uncommon for estate planning attorneys to come across estate documents that are decades old and have never been updated. As we’ve said before here on the AgingOptions Blog, estate planning is not a “one-and-done” proposition. That said, this 2022 Kiplinger article on estate planning, written by Florida estate planning attorney Richard Ricciardi, caught our eye last year, and we’re bringing it back for another look.

Ricciardi writes that it’s a great idea to update your estate plan, but there are mistakes and oversights he has seen many clients make which can lead to hidden problems. Let’s review Ricciardi’s list of the five mistakes people often make in the review process.

An Incomplete Review Leads to Legal Headaches

Writing in Kiplinger, Ricciardi begins, “Establishing an estate plan is extremely important. As life changes, it is necessary to update your plan to fit new circumstances. Whether it’s a change in domicile, the death of a family member, new grandchildren or a significant change in assets, it is important to make sure you adjust your estate plan accordingly.”

To that end, Ricciardi highlights the following mistakes that he sees all-too-often, which can lead to real financial and emotional headaches for you and your family in the future.

Mistake #1: Updating the Will, Ignoring the Rest

The first common estate planning error, says Ricciardi, is to focus on making and updating the will, but then to neglect the other documents required for all-around estate planning.

“When updating an estate plan,” Ricciardi writes, “people tend to focus on updating their wills and trusts without taking time to have their powers of attorney, health care directives or nominations of guardians reviewed and updated as well. This tunnel vision prevents them from completing a full update to their estate planning.”

Ricciardi is quick to note that, yes, these ancillary documents are technically valid indefinitely, “but that doesn’t mean they should not be periodically reviewed and updated. Older templates become outdated. Addresses, phone numbers or even the agents themselves might require modification.”

One of Ricciardi’s clients swore up and down that his power of attorney did not need to be changed, only to realize that the agents he had long-ago appointed, namely his siblings, had since passed away. A sobering warning to us all: when making updates, look at the whole picture, not just the will or trust.

Mistake #2: Choosing the Wrong Agents

In his article, Ricciardi says he sees too many clients use what he calls “flawed reasoning” when selecting executors or trustees to act on their behalf. Instead of choosing the most qualified person, they base their choice on an attempt to avoid the appearance of favoritism—often by appointing too many agents—or on age or profession.

“The ideal candidate needs to live in close proximity to you and have an ample amount of time to address issues you may need,” Ricciardi writes. “That person may not be your child who is a doctor with a family, because they might not have enough free time to help.”

He goes on to warn that trying to appoint co-agents—and this includes appointing all of your children together—is not a good idea. “Such action can add to the administration time it takes to transfer your assets,” he explains. “It could also lead to a deadlock due to differing opinions or different time investments.” Ricciardi sums it up this way: “It might be slightly counterintuitive, but one person who is organized, efficient and has the time and capability to handle these matters is most often better than three others.”

Mistake #3: Ignoring a Financial Review, Especially Beneficiary Designations

The third error can hold real landmines, Ricciardi writes. It’s the mistake of updating your estate plan without taking a close look at your financial accounts first – especially your beneficiary designations.

“An attorney can update an estate plan, but people should also take the time to meet with a financial adviser and have their investments and financials reviewed as well,” Ricciardi writes. “Most people are so focused on having their estate plan updated that they forget to get a checkup on their financial accounts and remember to make beneficiary designations.”

Sadly, Ricciardi knows the pain of this firsthand. He regularly performs probate services on the estates of people who spent the resources necessary to create trusts, but after they pass away it’s discovered that they forgot to assign beneficiaries to their financial accounts separate from the trusts. “Now,” he warns, “beneficiaries must go through the time and expense of probate, when preventing that issue was one of the primary plan objectives. The vehicle is important, but make sure what is inside is periodically checked as well.” 

Rajiv Nagaich of AgingOptions adds this highly important alert: the beneficiary designation form you signed on your first day at the new job thirty years ago usually trumps whatever your will stipulates. “In most cases the designation of a beneficiary supersedes your will,” he states. “This is particularly important where there have been multiple marriages. Keep those forms current!”

Mistake #4: Overlooking the Laws When Moving Between States

The next error is forgetting to update your estate plan when you move to another state. As Ricciardi explains, “Estate planning documents drafted out-of-state, as long as they were drafted with the formalities and requirements of that state, will be effective in all 50 states. That being said, having out-of-state documents can unnecessarily complicate trust or estate administration, or the ability to exercise powers of attorney or health care directives.”

Whenever a client moves to another state, Ricciardi always advises them to review and update their plans to make sure everything functions correctly. “They might be legally effective, but there is no good reason to have a slew of estate planning documents from Michigan when you left that state five years ago and have no further connection to that state,” he writes.

Mistake #5: Not Updating Critical Information for Your Executor

The final error Ricciardi gives us can have pretty dire consequences: forgetting to create, or update, your “asset cheat sheet” for your heirs and executors.

“Most individuals, as they get older, accumulate a great deal of different assets and investments,” Ricciardi writes. “Real property is easy to find, but accounts are not so easy to locate. It is not uncommon for someone to have stock and bond investments, life insurance, annuities, securities or other investments with many different institutions. I find it rare that someone has all of their investments with one company.”

As Ricciardi puts it, no one knows your financials like you do. When you change anything in your estate plan, make sure you create and update a list of your accounts and assets. “It is not important to put a value to the account, as those change over time,” Ricciardi explains.  “Make sure to include the name and location of the account and the last four digits of the account number. It is one of the most important things you can do for your beneficiaries to avoid an unnecessary treasure hunt for your assets when you’re gone.”  We would add, don’t forget to have passwords available for your executor.

With these mistakes in mind as you create and update your estate plans, you are far less likely to walk into painful, costly situations for you and your loved ones. You know what they say about an ounce of prevention? According to Ricciardi, it especially holds true for planning your estate.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.kiplinger.com)

When Safety Meets the Second Amendment: Should There Be “Gun Retirement” for the Elderly?

Cognitive decline is a very real part of life for millions of seniors and their families. The Alzheimer’s Association estimates that one-third of seniors will die with some form of dementia, not necessarily as the cause of death, but as a factor that often complicates their lives, and the lives of those they love, in their later years. With that many seniors affected by diminishing mental faculties, all of society has a major stake in how to keep them safe.  But one of the greatest dangers may be the one often overlooked: what about seniors who own guns or who live in households with easy access to firearms?

Giving Up a Firearm May Be Just Like Giving Up the Car Keys

To explore this topic, we turn once again to this article on the HealthDay website, written by reporter Amy Norton. “Just as some elderly drivers need to give up their car keys, older gun owners may eventually face ‘firearm retirement,’” Norton writes.  “And a preliminary study suggests they are open to the idea.”  She’s referring to a set of focus-group interviews with older gun owners, done a few years back in Seattle by researchers at the University of Washington.

“It’s an important issue,” says HealthDay, “given that 40 percent of older Americans live in a home with a gun.” That’s according to lead researcher Laura Prater, who works at the UW’s Harborview Injury Prevention and Research Center. The study found that many of the senior respondents in the focus groups had already considered putting some limits on their firearm access, but most had not yet laid out firm plans to determine when and how.

Firearms Plus Dementia: A Frightening Combination

The concern, says the HealthDay report, is obvious. “A significant number of those seniors have or will develop dementia or major depression,” Norton writes. “If they have easy access to a firearm, they could harm themselves, accidentally or intentionally.” The UW’s Laura Prater says their study does not suggest taking firearms from older adults who can still use them safely. But once a senior’s mental state puts themselves or others at risk, the situation changes dramatically.

“The point, [Prater] stressed, is that gun owners, family members and health care providers should talk about the future,” says the article, “including what should happen with household firearms once a person’s health makes access a hazard.”  Prater advocates making the topic of gun possession “like a normal conversation, just like you plan for other things, like driving, retirement or finances.”

Study: Older Gun Owners Generally Accept “Weapon Retirement”

With gun rights so politicized in the U.S., one might assume that older gun owners would dig in their heels and resist the very idea of giving up their guns – but as it turns out, that’s not so. “A big takeaway from the interviews was that gun owners accepted the concept of firearm ‘retirement,’” HealthDay reports. That’s because they take their responsibility seriously.

“Older adults want to be responsible gun owners,” Laura Prater told HealthDay. “What they weren’t open to was someone else making the decision for them.” As with everything else about aging, this attitude demands that families practice thorough planning before the time when early-stage dementia begins to advance and communication becomes a challenge.

How Many Guns? Start with a Firearm Inventory

The University of Washington report recommends that families might start by taking a firearm inventory, where the older adult and family members account for all weapons in the home. “Many owners, Prater noted, have multiple firearms, and family members or other caregivers are not always aware of them,” HealthDay reports.

After tallying up all the weapons in the household, seniors might be more comfortable disposing of firearms that are not being used, allowing for a kind of transition period. (Make sure you check with local law enforcement on how best to do that.) This also gives families the opportunity to talk with their loved one about what each firearm means to them. If they associate their gun with safety, then families need to talk about how they can still feel safe if the gun is no longer around. “If they value a rifle because hunting was an important activity for them, then the question may be how to replace that lost activity,” says the article.

Note that gun owners who want to pass along their firearms to their heirs need to make certain they’re following proper legal protocol, or else the heirs could run afoul of federal and state laws. A Gun Trust may definitely be worth investigating, as described in this recent Kiplinger article. We encourage you to contact Life Point Law for assistance and consultation.

No One Knows the Scope of the Problem – and Doctors Aren’t Addressing It

Part of the challenge this issue presents, HealthDay reports, is a lack of reliable information concerning the scope of the problem. “Data are lacking on how many Americans with dementia live in a home with firearms – and how often that ends in harm,” says the article. In one recent study of 124 caregivers, one-third of those caring for someone with dementia said there was a firearm in the house. “On the other hand, only 5 percent of the entire group said a doctor had ever talked to them about firearm safety,” HealthDay warns.

Experts say more doctors need to have the issue on their radar, and include it with other household safety questions. “The general thinking,” said one researcher, “is that when dementia reaches the stage where driving is unsafe, handling a firearm is unsafe, too.”

Suggestions on Gun Safety from the Alzheimer’s Association

We visited the website of the Alzheimer’s Association and found this important set of recommendations about guns and dementia. We’ll abbreviate their points here but we encourage you to click the link and print out the pdf to share with family and friends.

The following may help as you prepare to discuss firearms:

• Begin with a discussion of who might inherit various pieces. This can be a way to move to a discussion of safety at home when the responsibility for keeping firearms in good working order becomes too difficult or is no longer possible.
• Consider selling some valuable items that are no longer used to help pay for care.
• Discuss donating an antique collection for others to appreciate.
• Enlist the help of a knowledgeable, trusted authority figure and get the family’s agreement ahead of time to follow his or her advice. Consider inviting trusted relatives or hunting buddies to take part in the conversation with the family.
• If there is no consent to remove the weapons, removal may need to be done against the person’s wishes, ideally while he or she is out of the house. Also remove reminders of the weapons, including cases, ammunition, racks and holsters.
• Address any anger or other emotions that may occur as a result of the change by acknowledging feelings.
• Redirecting to an activity that can be done together may help reduce feelings of anger or other emotions.
• If you need assistance removing the guns, your local law enforcement agency may be able to help.
• Laws around selling or transferring firearms vary from state to state. It is important to familiarize yourself with applicable laws in your state.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at https://consumer.healthday.com)