What is the biggest challenge clients will face when caring for their parents?Boomers will spend roughly 12 to 20 years involved with the care of their parents. As boomers' parents live longer, the real danger is not that they will spend their children's inheritance on healthcare, but that the boomers will spend their own retirement money caring for their parents who have run out of money.
So, at a time when they thought they could throttle back with the mortgage paid off and the kids finished with college, I see boomers facing a serious, double-edged financial threat. In addition to not having saved enough for their retirement or planned for the second careers that they may need to pursue, they also may be financially responsible for their parents. Financial planners need to realize that later in life clients are going to have more pressure than they ever had when their children were young.
In addition, boomers' financial stress could be intensified because they don't live around the corner from Mom and Dad. For instance: Sally lives in Los Angeles, Joe is in Dallas, and Mom and Dad live in Columbia, S.C. So when the call comes one morning that a parent has fallen and can't get up, the adult children will need to make a sudden trip or get help for their parents. Events like this come at a cost. Correspondingly, I expect the continued development of technologies and services that assist adult children in managing their parents' finances and healthcare from a distance.
For example, we'll see greater use of today's data aggregation technology that enables children to organize and monitor their parents' financial, legal and medical information. For instance, eMoney Advisor (www.emoneyadvisor.com) has created a Web-based platform that monitors everything from portfolios to prescriptions and stores critical legal and health care documents. Getting critical information on a Web-based platform will be the key in connecting geographically dispersed boomers and parents.
I also see greater reliance on other advances such as state-of-the-art home monitoring systems and conveniences like home delivery services for medical supplies and equipment. And there will be a real boom for home companion care companies such as Seniors Choice (www.theseniorschoice.com), HomeInstead (www.homeinstead.com), Visiting Angels (www.visitingangels.com), and ComfortKeepers (www.comfortkeepers.com).
So you see greater use of geriatric or healthcare managers to help children manage their parents' care?Yes, however, the different providers and protocols make the elder care support structure a fragmented, partitioned, hugely complex and cumbersome system to navigate. In fact, it reminds me of the financial services business before financial planners came along to serve as the consumer's quarterback. Going forward, I believe we'll see more financial advisors stepping in to serve as the point person for managing the care of aging clients or helping clients with their own parents, simply because they are accustomed to and skilled at coordinating the services of other professional advisors (such as lawyers and accountants). As HIPAA and privacy law continue to complicate the coordination of care planning, advisors will look for more specific, related training. For instance, the curriculum for a new professional designation, the Parent Care Specialist, encompasses healthcare, law, accounting and financial planning.
Big picture: I think boomers care about their parents; they just may not want to care for their parents 24/7. They may delegate this work to a healthcare manager if the care is of the highest quality. As we look ahead, financial advisors will be helping clients have meaningful conversations with their parents about all of the long-term care issues they may face in the future. Advisors also will help clients make the necessary connections to facilitate that care. From the advisor's perspective, the parent care business is the asset aggregation tool of the 21st century.
Are there other ways that caring for aging parents will differ from previous generations?I think the boomers are going to bypass the assisted living centers and nursing homes that we normally associate with aging. In the next 30 years, those spots will be relegated to the bottom socioeconomic level of our society. If my trends analysis is correct, the boomers will practice aging-in-place with their parents; then they'll adapt the lessons learned when their time comes.
Over the next 30 years, we'll see a surge of communities that allow residents to make easy transitions through various stages of physical and mental capacity. All the newer retirement homes will be wheelchair accessible and feature elevators, reachable appliances and cabinets and special caregivers' rooms. And because boomers will demand more autonomy around the care of their parents than the Best Generation required, we may see the return of the visiting doctor. Perhaps residential groups will get together and hire their own doctor to ensure they have access to the medical care they want.
Health care reform has been a major issue in the presidential campaign. What's your sense of changes that might unfold?I see three things happening. One, I think the bottom 30 percent of the population will gain access to some kind of primary care that's a combination of government subsidy and private provider. I think Wal-Mart could administer that for us. After all, they have the locations and the second largest pharmacy in the world. There's no reason why we couldn't have someone there to give flu shots and measles vaccines. Two, the middle part of the country with the traditional employment model will move to high deductible employer-sponsored plans with the emphasis on wellness and discrimination on behavior-related illness. So, as an employee, you will get health insurance, but if you smoke or are overweight, your deductible will be higher. Three, at the upper end, where most advisors' clients are going to be, I think we'll see legislation that increases the Health Savings Account (HSA) contribution substantially, perhaps to $100,000. That will transform these accounts into intergenerational wellness accounts that will be passed from one generation to the next.
Are there other innovations that could ease the burden for children caring for aging parents?Parent Care Solution has developed and is championing something called a Parent Care Savings Account (PCSA). A PCSA would resemble a 401(k) in deductibility and tax-free accumulation characteristics and allow employees to set aside 3 percent of salary on a pre-tax basis for care for their aging parents. The PCSA could be transferable from one generation to the next on an income- and estate tax-free basis as long as the future use of the funds was limited to providing health care services for parents, including long-term care, chronic disease management, adult daycare, etc. I see all sorts of opportunities for life insurance to be placed inside the PCSA (something an HSA should allow now) in order to multiply the inherited amount inside the account.
Our impending healthcare crisis is so severe that we need to consider changes of this magnitude. Boomers tend to seek control and take responsibility and what they learn in the next few decades taking care of their parents may well be the catalyst for real change in how we care for the aging in America.
Marie Swift is the president of Impact Communications, a marketing and communications firm for independent advisors; see www.impactcommunications.org