The American population is aging rapidly and more than 76 million baby boomers are now moving through the second half of life. To boot, these elders are living longer–compared to their parents, and if longevity researchers are correct, it could be much longer. “The challenge is that clients will be managing their finances for many years past ‘traditional’ retirement, while simultaneously planning for the needs of elderly parents and young children,” explains Neal Cutler, dean of the American Institute for Financial Gerontology (AIFG). Another looming demographic factor that will affect not only society in general but also how you plan for your clients is the increasing number of elderly people with dementia, such as Alzheimer’s. “Dementia is increasing because Americans are living longer lives, and since the risk of dementia increases with age, there are going to be more people with it as the population ages,” notes Jane Tilly, director of quality care advocacy and public policy at the Alzheimer’s Association.
So, what can you do to successfully advise senior clients at a time when there are more than five million people in the United States living with Alzheimer’s disease, including 4.9 million people over the age of 65? Here are some ways to prepare, what you need to know to help your clients, and what some of your peers are already successfully doing.
Know What Services Clients Need
Financial gerontology services for clients and their extended families is a trend that will only grow more prominent as the boomers age. Those services include exploring medical care options; navigating the intricacies of Medicare and Medicaid; and arranging end-of-life issues of healthcare, estate planning, funeral arrangements, and taxes, all delivered in a competent way that includes, ideally, excellent bedside manners.
Cutler points out that boomer clients are not only making decisions about themselves, but are also caring for their elderly parents. Because boomers on average started procreating later in life, and adult children often live at home after their formal educations are finished, many 60-year olds also have kids at home, which means the middle-aged boomer family these days is very different–with important financial implications–than it was 40 or 50 years ago. “It used to be that the planner and client talked about ‘I don’t want to outlive my money.’ Now, more people are concerned that they are going to spend all their retirement money on either healthcare or long-term care,” Cutler adds.
Another major task of the financial gerontologist is separating the emotional from the financial. “We talk about life events that happen in retirement, like becoming [widowed], health issues, or having to be a caregiver,” notes Stephanie Chappell, corporate financial gerontologist at The Hartford, who coaches advisors on how to deal with older clients. “Advisors don’t typically address those topics, but I recommend that they bring them up and get the basic understanding of these issues and how important these issues are to their clients. Then they can really become a trusted resource,” she states.
Rosanne Grande, managing director at the fee-only advisory firm R.W. Rog?(C) & Company in Bohemia, New York, (she is also a registered financial gerontologist–RFG–and a certified senior advisor–CSA) couldn’t agree more. “If you have clients that have the need and you get them or their parents taken care of, you have a client for life,” she states. “It really binds the client to you–it’s a special relationship and they feel they’re not alone.”
“We just took our first client through the whole process,” says Grande. “She’s 92 years old with no immediate family and nieces and nephews that are out of state.” According to Grande, the woman had assets in multiple bank accounts, and also had concerns about her will and power of attorney. “We consolidated all of her assets. I took her to the banks and closed out accounts she didn’t need anymore, then I took her to plan her funeral as well.”
Grande is quick to point out that every client situation is different. For instance, she says, “Some clients may need you to get them to a Medicaid planning attorney because they have no more assets and are in poor health,” she adds.
Furthermore, advisors in this arena must be able to plan very long term, due to the ever-increasing risk of dementia for this age group. “Dementia is an issue because people live many years when they’re beyond the capacity to make their own decisions,” notes Matthew Keeling, a financial planner at Keeling Financial Strategies, Inc. in Mashpee, Massachusetts. “It’s different than someone who has a disease that kills them within six months to a year–there are longer-reaching consequences here.” In fact, people with dementia may live a decade or more after the diagnosis.
When to Get Involved…