There’s the retirement that looks like the commercials: biking, travel, enjoying the family.
And then there’s the one where you can’t get up the stairs anymore.
Most of us happily plan for the first, when our health is good and energy high. The second can be hard to contemplate, when health falters and medical crises can change lives in an instant.
Yet a focus on just the active part of retirement can shortchange your quality of life once you begin to decline, which is why financial advisers suggest you also look at how you’ll live in that later phase. Here’s what you should consider for that second stage.
Certified financial planner Dana Anspach of Scottsdale, Ariz., doesn’t want her clients to prematurely give up their homes or make other moves that may not suit them. One couple she advised, for example, moved into a continuing care community – one that includes independent living, assisted living and nursing home care – in their 80s and moved back out again a year later because they couldn’t entertain or decorate their apartment the way they wanted. (They used their refunded deposit to buy a condo and had enough money to pay for in-home care.)
The key, planners say, is to start thinking and talking about how you want to cope when your health begins to fail.
“You have so many more options if you plan earlier and set up the trajectory of where you’re wanting to go,” said Danielle Howard, a CFP in Basalt, Colo.
Howard starts with the somewhat easier decisions, such as whom the clients want to make medical and financial decisions should they become incapacitated. Then the discussion moves to the harder topics – imagining life when they can’t navigate stairs or drive or handle daily activities such as cooking, cleaning, dressing or bathing themselves.
Anspach advises clients who don’t have long-term care insurance or family members willing to provide care to save their home equity for such expenses, rather than using it to boost their retirement income. (Home equity can be tapped with lines of credit or reverse mortgages or by selling the home.)
If parents do expect children to help, Anspach said, they need to make sure the kids are on board and that those kids’ lives are stable enough to provide care if the parents move closer.
“You don’t want to move across the country and have them get transferred somewhere else,” Anspach said.