How to Protect an Aging Client’s or Adult Child’s Retirement Security from a Medical Crisis


Annalee Kruger, President, Care Right Inc.

Editor’s note: This article is an adaptation of the live webinar delivered by Annalee Kruger in 2018. Her comments have been edited for clarity and length.
You can read the summary article here as part of the 1st Qtr 2018 Retirement InSight and Trends Newsletter, worth 1.0 CE when read in its entirety (after passing the online quiz.)
You may also choose to take the full length course How to Protect an Aging Client’s or Adult Child’s Retirement Security from a Medical Crisis – Annalee Kruger for 1.0 hours continuing education (CE)credit.

By Annalee Kruger, President, Care Right Inc.

I used to be a social worker and long-term care administrator for over 20 years. Every day, I had families in my office because there was a medical crisis. Mom fell, she broke her hip. Hospital says here’s a list of facilities. Go find one because we’re discharging today at noon. The families are just completely caught off guard. They never thought about what is our actual plan if something happens to mom or dad? Who in the family is can drop what they’re doing, leave work for a couple of weeks, and sort out what their options might be?

Rather than always being in crisis reaction mode, I started my company, Care Right Inc., with the mission of helping families be proactive and sitting down and talking about our aging plan sooner rather than later – ideally when things are still going well, because I’ve never had a family ever come back to me and say, “Gosh, Annalee, I feel really great. I’m really confident about the decisions that we had to make, when emotions were high, and time is limited.”

Why Have an Aging Plan?

It’s about proactive planning. Just like you all help your clients plan, from a financial perspective, I help families plan from an aging perspective. Where is our loved one going to live? How is care going to get paid? Who is going to provide that care? One of the main advantages of having a neutral third-party person facilitate these family conversations is because these are sensitive conversations to have whether we’re talking about incontinence or memory issues or family dynamics and family dysfunction. People need a trained, neutral, third party person to really navigate these kinds of conversations because most families when they call me are already so strained with their relationships with their siblings and with their parents.

Where is the loved one going to live? Who will provide that care? And how will care get paid? Most of my calls are from an adult daughter who is the primary caregiver. She is also taking care of up to six other aging parents or six other aging loved ones, whether it’s her parents and step parents, and then her in-laws, which she may or may not like. She might also have that stray aunt or uncle who outlived their children or never got married. It’s a very good conversation starter to help these families communicate about what they have in place and what more do they need to put into place.

Another advantage of proactive planning is because, when you get older, your conditions can change very quickly. No one ever expects or plans to have a stroke. No one expects to fall and hit their head and have a subdural hematoma that’s going to be life changing. No one ever plans for these things, and yet they happen every day. You don’t want to be willy nilly about your care and your aging process. When you’re the most vulnerable and the most dependent, you really need to make sure that you have a plan, otherwise, you’re going to likely get sub quality care by sub quality care providers.

Many facilities such as assisted living, memory care units, or nursing homes, have long waiting lists. You must financially qualify (a lot of people don’t know that) so they’re waiting until the last minute. These are important things to address with clients because people don’t know what they don’t know so then they make expensive decisions and mistakes.

You must plan for where are they going to get their care and making sure that they qualify for places to be able to move into. There are significant cost savings when you plan ahead. In 2015, there was a study by Genworth that outlined that caregivers estimate that proper planning would have resulted in, basically, saving them about $8,000 in out of pocket expenses.

Last year, I had my clients, my primary caregivers who were the ones that were kind of the go to person for the family, kind of calculate how much money they spent out of pocket for their aging parents’ needs just in travel expense. Daughters and sons were spending an average of $18,000 out of pocket when they had more than one person that they were tending to that’s elderly because, again, if you must fly to wherever that loved one is when you get that crisis call, air fare is not $200. You rent cars, rent a hotel room. It’s very expensive. When you have more than one person you’re taking care of, it’s a lot of out of pocket because, again, families don’t have a plan in place.

This doesn’t count the time away from work. If they’re an employee, they’re losing income. If they’re a business owner like me, they’re losing out on revenue because they must tend to the needs of their parents. A lot of my clients are business owners. They are very busy. They’re realtors. They can’t make money if they’re not in their area to make money. If they’re in Colorado, instead of down here in Florida trying to sell houses, you can’t do that when you’re in Colorado.

What is a Family Caregiver?

A family caregiver is a spouse, adult, child, or other relative, partner, or friend who has a personal relationship with and providers a broad range of unpaid assistance for an older adult with chronic or disabling condition. Dementia, aging, multiple sclerosis, ALS, any of those kinds of chronic conditions. What’s key there is it’s unpaid. Some are quitting work or taking early retirement so that they can have the flexibility in their schedule to take care of their aging parent. Families financially jeopardize themselves so that they can be available and provide the hands-on care and supervision that their loved ones need.

  • The typical caregiver is usually female – it’s usually a wife, a daughter, or daughter-in-law.
  • 52 percent of these caregivers are adult children taking care of their parents.
  • 60 percent of the caregivers are between the age of 25 and 54.
  • The average caregiver age decreased from age 53 in 2010 to age 46 in 2015.
  • Over two-thirds of caregivers sustained their commitment for more than one year; a third of them for over five years for one person.
  • Caregivers miss an average of seven hours per week of work or 18 percent of a 40-hour work week. When you look at 33 percent of the average income is lost by caregivers each year because of their duties of being a caregiver. In 2010, 64 percent of caregivers missed work due to caregiving. In 2015, 77 percent of caregivers missed work due to caregiving.
  • Often, caregiving leads to retiring early. They decline their job promotions. They take menial positions because they need the flexibility in their schedule. And they’re also quitting their jobs to move closer to their aging parent. This is something that I hear every single day from my families that I meet with.
  • In 2010, only 41 percent of the caregivers were funding their aging parents. In 2015, 62 percent of their parents were being funded by their adult children.

Caregivers sometimes fund their aging parents because they don’t know their parents already have long term care insurance. Everybody seems to think that Medicare is one of the retirement buckets that they can count on. However, Medicare does not pay for things that everybody seems to think that it will.

The Health of a Family Caregiver 

When you look at the health perspective of being a family caregiver, 54 percent of caregivers experience negative feelings, including guilt and resentment. Forty-three percent of caregivers said a long-term event negatively affected their personal health and wellbeing.

In the beginning, it starts out, “I can help you with your mail. I can bring over some milk. I can do this, I can do that”. The next thing you know, they’re taking time off work, and they’re not taking vacations, they have no vacation days left because they’ve had to take their parents to the doctor’s office. Oftentimes, they’ve already exhausted their FMLA benefit.

People with Alzheimer’s disease require an average of 70 hours per week of supervision and care. Sixty-two percent of those hours are usually provided by a family caregiver. Approximately 80 percent of dementia patients are cared for at home by their family members. Most caregivers report feelings of anxiety and depression. Probably four times a week I get calls from adult children who say “I’m on medications for anxiety, depression. I’m not sleeping at night. My family doesn’t even want to hang out with me anymore because I’m just moody all of the time.”

About 70 percent of people turning 65 can expect to need some form of long term care during their remaining lives; that’s why it’s so important to have these conversations. I don’t care if you’re 80 years old or if you’re 50 years old or 30 years old. These are conversations that families should have because you never know what’s in store for you every day. Why does this matter? Because there’s a family caregiving crisis epidemic out there. We all have heard about the opiate epidemic. And there is, for sure, that. There’s no question about that. But I am telling you, with almost a 30-year career, there is a family caregiving crisis out there that no one is talking about.

Family caregivers are in survival mode. They’re trying to make it through their day, but it’s at the expense of their own wellbeing. I just wrote a book about the portrait of a family caregiver. It’s called, “The Invisible Patient.” Everyone always asks how dad is doing. Well, dad is doing fine, but it’s because I’m missing work. It’s because I’m missing time away from my family. It’s because I am his assisted living. They’re just in survival mode trying to balance their work, their own family, their career, and not feel guilty about not being available as much as their parents might need.

Caregiving for Ethel and Marvin

It’s Ethel and Marvin’s second marriage. They both have three children, so six kids live in six different states. Ethel has memory impairment. Marvin is her primary caregiver.

Six children live in six different states. How well do the kids and step kids all get along? What is Ethel and Marvin’s relationship with their adult children? What’s the relationship with the children and their respective step parent? We know dementia is a progressive disease. We know that Ethel will need more and more care and oversight as her disease progresses. We know that Marvin is her primary caregiver who is also up in years. Most likely, he’ll be having his own physical health issues.

Yet he’s also needing to tend to Ethel because, at some point, Ethel won’t be able to stay home by herself and at some point, Ethel will need supervision 24 hours a day. She’ll need help with bathing, dressing, grooming, giving her her medication. So, that’s what a typical picture will look like, if you’ve got clients with memory impairment.

They’re not easy slam dunks, when you’re dealing with second marriages or second relationships or families that don’t get along and then they live remotely from each other. For complicated situations it is critical that they have these conversations as a family and a plan put together by a neutral third-party person. Do you think it would be wise to understand the liability issues involving the memory impairment, from your perspective, from being an advisor?

An advisor in Wisconsin attended a workshop that stated families are starting to sue advisors because they’re like, “Of course Mom has memory impairment. How can you not know that?” So as an advisor, it is essential that you learn about memory impairment and what are the red flags, and how does that affect you and your business and your livelihood, and those assets under management because what do you think will happen to the assets under management when either Ethel or Marvin dies?

Final Thoughts and Takeaways

  • There is an opportunity cost of not addressing aging and family caregiving issues with your clients. Poor planning or no planning results in increased care cost, hence lower assets under management.
  • It is important to put a plan together. One of the things I have learned with working with advisors these last few years is that most advisors that I’ve met anyway through sponsoring Financial Planning Association (FPA) chapters and speaking at the annual FPA Retreat don’t really understand the aging process. Why would you? How would you know unless you’ve worked in long term care?
  • There’s a real opportunity to learn about the aging process and really what it’s like to be a family caregiver. If you have clients in that role it’s critical for you to be a resource for them. Let them know that even thought this isn’t in the scope of your practice, there are people who can help them develop a plan, so they don’t get burned out, so they don’t have to use up all their vacation days tending to aging parents. Developing deeper relationships with your clients and their adult children is going to be essential.
  • Develop your team of trusted professionals that make you look good. Refer your clients to professionals who can meet their other needs. If you meet your clients’ holistic needs, they’ll refer you to friends and families.

How to Protect an Aging Client’s or Adult Child’s Retirement Security from a Medical Crisis - Annalee Kruger

How to Protect an Aging Client’s or Adult Child’s Retirement Security from a Medical Crisis – Annalee Kruger

About Annalee Kruger, President, Care Right Inc.

Annalee Kruger’s mission is to help families be pro-active and put plans in place before a medical crisis occurs. While she serves families in SW Florida, she also serves families across the US. Gone are the days of families living in the same zip code, let alone time zone. Annalee helps families with her virtual guidance service and virtual family meetings and family coaching/education.

In 2011 she founded Care Right Inc. to help families with aging loved ones navigate through the long-term care industry and cope with issues family caregivers encounter. Care Right’s mission is to help families be pro-active by facilitating difficult conversations early on, explain the importance of having their legal documents in order, explain the costs of health care, why having a financial plan is important, and developing a plan of care which incorporates the legal and financial planning.

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©2018, Annalee Kruger, President, Care Right, Inc. All rights reserved. Used with permission.

Posted in: Medical and Long-term Care Planning, PROTECT the Plan from Retirement Risks

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