Key Takeaways

• People are living longer, which can lead to unexpected longevity issues in health, finances, and cognitive ability.
• 50% of high net worth families are not financially prepared to deal with these issues.
• One in three seniors will suffer from Alzheimer’s or other age-related conditions that require specialized care.
• Avoid future problems by holding a family forum with children or close friends to discuss how to handle your needs if you become unable to do this yourself one day.
• Longevity is a good thing, but it’s best experienced fully prepared.

Recently, one of our clients sent me an article from Barron’s on how seniors are living longer and, many times, are unprepared for that longer life. Back in the 1960s and 70s, most people died in their 60s or 70s and within five or ten years after retirement, so there wasn’t much to be concerned about. They didn’t have to worry about outliving their money, or developing dementia, Alzheimer’s, and everything else that can come with old age.

The article quoted a survey conducted in 2017 by US Trust, saying that 50% of high net worth families are unprepared financially for any long-term, longevity situations. They simply aren’t sure what they’re going to do. A full 70% are not prepared in the case of a family member needing support and two-thirds have no plan in place for long-term care. These are all longevity issues, but beyond that, 1 out of 3 seniors now die of Alzheimer’s or dementia.

We have people in their 90s, still cognitive and able to make good decisions about their money; but, unfortunately, we also have those in their 90s who can’t make those decisions and it’s very difficult for them. Obviously, some type of transition needs to take place for them and it’s typically their children or other close friends who step in to make that happen. This has given rise to increased litigation around these family issues due to people stepping in inappropriately.

One suggestion the article poses is to have a family forum. This is really all about communication and usually involves the children getting together with the parents and saying something like, “Hey, if it gets to the point where you’re not able to handle your daily life financially, cognitively, or otherwise, we’re here to step in and help.”

It’s a tough discussion on many levels, but it’s becoming more of the norm, since people are more often living into their 80s and beyond. In fact, the article states, “Those who live into their 50s and 60s, at least a quarter of them are going to live into their 90s.” Certainly those health issues are related to increased longevity as are issues related to running out of money. All cognitive issues must be addressed and conducting a family forum is not a bad idea, so think about doing it sooner than later. Give that some consideration the next time you’re dealing with your own longevity issues. Until next time, enjoy.

Gary

Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country. Instead of being afraid of change, Gary is always looking at how technology will affect clients and bringing the best of it into the practice. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.

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