What Will Senior Housing Look Like in 2028?

Part of the TRANSFORMING LIFE AS WE AGE SPECIAL REPORT

(This article appeared previously on the website of A Place for Mom, Inc.)

Experts in aging, technology and senior living communities weigh in.

The first of the boomers — the population born between 1946 and 1964 — turned 65 in 2011, and the last will turn 65 in 2029. By 2030, boomers over 65 will make up 20 percent of the U.S. population, numbering around 60 million people, according to a report from the U.S Census Bureau.

“Significant changes are coming as we move out of the World War II generation to the baby boomer generation,” says Steve Maag, director, residential communities, at LeadingAge, a national association dedicated to advocacy, education and research on aging. That’s because boomers have higher expectations as consumers and a history of having those expectations met, Maag says.

Senior Housing in 2028

With that in mind, what will senior housing look like in 10 years? A Place for Mom checked with experts on aging, senior living communities and technology to find out. Here are some significant changes you’re likely to see by 2028 and beyond.

Boomer Consumers Transform Senior Housing

The baby boomer generation has never been one to accept the status quo, and that won’t change when it comes to senior living communities, says Maag.

“Historically, we’ve had a pretty trusted delivery system because customers of the past accepted it and weren’t as demanding,” says Maag. “Customers of the future are going to push to do things more the way they want to do it.”

According to Maag, retirement and senior living communities will have to respond to consumer demand by providing greater diversification of services that include:

• Dining options and restaurant-menu meal variety with more choices, including gluten-free, vegetarian and even Japanese, Thai and other culturally diverse foods
• Greater emphasis on lifestyle and wellness programs
• More choices in apartment fixtures, designs and furnishings
• More variety in payment structures

“Baby boomers want to have a voice in decisions in things like financial structure and payment systems and will push back and be assertive if they have questions and concerns,” says Maag.

Technology Will Improve Senior Living

Whether older people of the future plan to age in place at home or move to a senior living community, technological advances will enable them to live healthier, richer lives. One big factor is advances in telehealth, a technology that enables health care providers to diagnose and interact with patients via computer screen.

“Telehealth will obviously grow” over the next decade, says Robyn Stone, senior vice president for research at LeadingAge. Telehealth, already in place in many rural communities, breaks down transportation barriers for older adults, mitigates health care costs such as emergency room visits and helps older adults remain in their homes longer.

“You also have the potential for actually seeing a person’s environment and seeing their meds instead of having the person bring them in or having to reconcile through health records,” says Stone.

We’ll also see more senior-focused computer systems aimed at keeping long-term care residents happy and engaged, says Tom Bang, CEO of It’s Never 2 Late, a Colorado company that’s developed a picture-based, touchscreen computer interface system and installed the intuitive technology at approximately 2,300 senior living communities in the United States.

The communities use the technology to allow residents to connect by webcam to family and friends, but also to access engaging, personalized content and mind-stimulating activities. The system is also used by staff for memory care and rehabilitation programs.

Sensing technology that goes beyond today’s fitness monitors will also play a part in tracking heart rates and other vital signs. “Those are very natural technologies to be adapted in the right way in caring for seniors,” Bang says.

A Shift in Family Caregiving

In the future, family members will likely have less availability to provide caregiving for aging loved ones, says Stone.

A few reasons for the coming shift include:

• Disruptive effects of divorce on family support networks among middle-aged and older people
• More women remaining in the labor force longer, restricting their family caregiving roles
• Tremendous growth in the childless population of older adults

“When you combine all of these factors, it’s unlikely that family caregivers will be able to continue the level of caregiving performed by past generations,” says Stone. “It’s clear that a decline in family caregivers will put more pressure on formal care providers.”

Changing Price Points and More Cost Transparency

Not all boomers will have the same level of financial resources, such as pensions and paid-off mortgages, as previous generations, says Maribeth Bersani, COO of Argentum, a national trade association for senior living providers.

“We’re going to have to see some different price points for different people’s incomes and price levels,” says Bersani. Because senior living prices vary greatly by state, more people who can’t afford assisted living in their own state may even consider a cross-country move in their retirement planning.

For example, someone living in Massachusetts, where the current monthly median cost for assisted living is $5,600, might get their friends together and say, “Hey, let’s retire in Nebraska,” where the current median cost is about $2,000 less per month, says Bersani.

With unknown changes in health care and Medicaid ahead, aging boomers shouldn’t necessarily rely on Medicaid and other state assistance, either. “The established payment systems to meet their needs could present tremendous challenges,” says Maag. “People will have to move away from traditional government payment sources because those are not going to be adequate.”

Wherever they may choose to live, boomers who have grown accustomed to the ubiquity of online comparison shopping will expect senior living providers to list more information about pricing on their websites as they evaluate their options.

“More and more, senior living consumers expect to obtain pricing information online as a critical part of their search and decision process,” says Dan Willis, senior vice president of partner services at A Place for Mom. “Senior living providers who present this information in a way that is easy to access and understand will see increasing benefits.”

Appealing to the ‘Young Old’

Older adult communities of the future will trend toward becoming more attractive to the “young old,” boomers who’ve reached their late 60s or early 70s by 2028 and want to move into senior communities while they’re still healthy enough to enjoy the amenities, says Bersani.

“We hear a lot of people say they wish they would have moved in sooner so they could have participated more in activities,” she says.

It looks like the generation at the helm of a more health-conscious society, rock ‘n’ roll music and war protests is now well on its way to bringing about societal change in senior living.

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Home Equity Gives Seniors Financial Leverage

Housing wealth for older homeowners is on the rise nationally, giving them a source of money for late-in-life expenses, according to a mortgage industry group.

The National Reverse Mortgage Lenders Association reported Sept. 29 that homeowners age 62 and older saw their home equity increase by a combined 2.4 percent to $6.42 trillion in the second quarter of 2017.

According to the association NRMLA, the growth in housing wealth for retirement-age homeowners was driven by an $162 billion boost in senior home values and offset by a 0.8 percent increase of senior-held mortgage debt that equaled $12 billion. The quarterly measurement of home equity rose to its higheset level since 2000.

“It is unclear whether Congress and the president will come to an agreement on healthcare reform this year, but there is little doubt that healthcare spending per person will continue to increase. This is a particularly sobering fact for older Americans who can expect to spend between $200,000 to $400,000 out- of-pocket for medical expenses during retirement,” said NRMLA chief executive officer Peter Bell. “The question for them right now is not whether the Senate can pass a bill, but how are they going to pay for the financial shocks of aging? Housing wealth provides older homeowners with an available source of funds to manage the costs of caregiving and other expenses incurred in the last third of life.”

A 2015 research paper from Ohio State University (“Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve Independent Living”) shows that 14 percent of reverse mortgage borrowers took out the loan with the intention of using the proceeds to pay ongoing health or disability expenses. An example, according to NRMLA, ia couple in Maine who used reverse mortgage loan proceeds to pay off aging medical bills, help their adult son, and supplement retirement savings.

The National Reverse Mortgage Lenders Association (nrmlaonline.org) represents the lenders, loan servicers and housing counseling agencies responsible for more than 90 percent of reverse mortgage transactions in the U.S.

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National Reverse Mortgage Lenders Association on Reverse Mortgage Done Right

Reverse Mortgage Done Right!  Click on Link

https://www.facebook.com/RMLendersAssociation/videos/1736534589692452/ 

Boost Retirement Income with Home Equity

Using home equity to enhance retirement income planning is an emerging topic in financial planning.

When I address consumer groups and conferences for financial professionals all around the country, I note that the traditional three-legged stool of retirement security–which traditionally has relied on pensions, personal savings and Social Security–is broken. Many Americans have not accumulated enough savings to support a retirement that could last 30 years or more.

I offer an alternative analogy of a retirement income pyramid that relies on Social Security and retirement savings as a solid base, augmented by additional layers that tap home equity, assume part-time employment and incorporate other sources of income, if necessary, such as inheritances, brokerage accounts and income-producing assets.

New research by Peter Neuwirth, Barry Sacks and Stephen Sacks published in the October issue of the Journal of Financial Planning documents how including home equity in the form of a reverse mortgage, with retirement savings, can maximize retirement income while minimizing the probability of exhausting all assets before the end of retirement.

ALTERNATIVE STRATEGY

In the article, "Integrating Home Equity and Retirement Savings through the Rule of 30", the authors suggest that this new approach could serve as an alternative to the 4% rule of thumb that financial advisers have used for decades. The 4% rule, first developed by financial planner William Bengen in 1994, is based on the theory that if a retiree restricts his or her initial withdrawals to 4% of their portfolio in the first year of retirement, and increases annual withdrawals to account for inflation, their savings should last for 30 years or more.

But steep market declines during the financial crisis of 2007- 2009, which coincided with the first few years of retirement for millions of Baby Boomers, threw that theory into question as steep losses early in retirement decimated their portfolios, leaving many retirees with insufficient assets to benefit from subsequent market recoveries.

The new research demonstrates that the appropriate dollar amount of the initial withdrawal for any given total amount of retirement savings plus home value at the outset of retirement turned out to be 1/30 of that combined amount for a broad range of retirees. The research assumes the portfolio is invested 60% in equities and 40% in bonds.

The analysis is based on retirees using a coordinated strategy of establishing a reverse mortgage credit line at the outset of retirement and drawing income from the portfolio in the first year of retirement equal to 1/30 of total retirement income resources (portfolio and home equity). If the portfolio performance is positive, the next year's income would be withdrawn from the portfolio. If the performance is negative, the ensuing year's income would be withdrawn from the reverse mortgage credit line.

"The dollar amount of the initial withdrawal that resulted in an approximately 90% probability of cash flow survival was the same across a broad range of ratios of home value to initial value of retirement saving portfolio," the article found.

The research tested the hypothesis against four profiles of retirees, including mass-affluent retirees with a home value of about $400,000 and a portfolio of retirement savings of $800,000; house rich, mass-affluent retirees with a home value of $800,000 and a retirement savings of $400,000; the almost-affluent retiree with a home value of $150,000 and total retirement savings of $300,000; and the house-rich, almost affluent retirees with a home value of $300,000 and a retirement portfolio of $150,000.

"FORGOTTEN ASSET"

"Home equity has been the forgotten asset of retirement planning for years," said Jamie Hopkins, co-director of the Center for Retirement Income at The American College of Financial Services.

"Most financial advisers don't take a comprehensive look at home equity solutions in a retirement income plan," Mr. Hopkins said. "This can leave the client's largest asset sitting idle until being used as a last resort or as a legacy asset to heirs upon death," he added. "But for many people, using home equity more strategically and throughout retirement can be a more effective solution."

Mr. Hopkins noted that the new research highlights another important concept: "Reverse mortgages are not just for the cash-poor and house-rich client, but that reverse mortgages can help millions of middle wealth Americans in retirement."

The authors noted that despite recent changes to initial and annual mortgage insurance premium rates and lending limits that affect reverse mortgages issued after Oct. 2, none of the changes "would have a material impact on the key findings presented here."

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Start Planning Now to Care for Elderly Parents

NEW YORK (Reuters) - If you have an aging parent and want a glimpse of what the future holds, look no further than Leslie Glutzer.

The 66-year-old from Chicago has a mom who is 92, dealing with dementia, now living in a local nursing home. Those costs are not covered by Medicaid, so Glutzer and her husband are spending more than $5,000 a month from their savings.

"It really starts to add up," Glutzer says.

This financial struggle is one that is shared by many. 

For nursing homes, in particular, the costs can be astronomical. A new study from insurance giant Genworth Financial found that a private room in a nursing home averages out to $267 per day or $8,121 a month, up 5.5 percent from the year before. Semi-private rooms are not far behind, at $7,148 a month on average.

Overall, long-term care costs rose by 4.5 percent from 2016 to 2017, according to Genworth's "Cost of Care" survey. That is the second-highest annual increase since the yearly survey began back in 2004.

Experts agree that it is important to start thinking about caregiving costs now. Waiting too long means you cannot stockpile resources, take out affordable insurance policies or plan ahead for a thoughtful drawdown of assets.

"At that point, your choices become very limited," says David O'Leary, president and CEO of Genworth's U.S. Life Insurance division.

So exactly how can you provide compassionate care for your parents without bankrupting yourself and sabotaging your own retirement? The following are five tips:

TAKE FINANCIAL INVENTORY

Have a family meeting and take stock of the financial resources available. Folks in their 70s or 80s may have a pension, as well as Social Security and personal investments, which could help soften the financial blow for adult children.

Figure out if all siblings are going to share eldercare costs equally, or if some who may not have the means can contribute in other ways, like arranging hospital appointments.

Be sure to find out what your parents envision for their future.

"As the child, we want to make the decision we think is right," O'Leary says. "But we really have to look at everything through the eyes of our parents."

HOME EQUITY

If your parents own a home, consider tapping it to pay for caregiving expenses.

"Think of it as an investment that can be used to pay for care," says Joy Loverde, an eldercare expert and author of the new book "Who Will Take Care of Me When I'm Old?"

That might mean selling it, downsizing elderly parents into a smaller space, and using those funds for long-term care. It might also mean that adult children buy the place, lease it back to the parents and potentially tap the home equity.

Or it might mean a reverse mortgage, which allows homeowners to borrow money against the value of their homes, receiving proceeds as a line of credit, fixed monthly payment or lump sum.

MEDICAID QUALIFICATION

Medicaid can cover long-term care costs like nursing-home admission, but only for those under a certain level of personal wealth. That might require shifting assets in a thoughtful (and legal) way.

"One of the most effective planning strategies has been to encourage our clients and their elderly parents to consider gifting their assets into irrevocable trusts, including their primary residence," says Ian Weinberg, a financial planner in Woodbury, New York.

GET COVERED

Long-term care policies can definitely help with eldercare costs, but only 8 percent of the population is currently covered by them, according to Genworth. The trick is to secure them while you are healthy and early enough - say, in your 50s - so that they are still relatively affordable.

"I have at least one client dealing with these costs for his parents, and thank God we had the good sense to buy LTC insurance," says Kashif Ahmed, a financial planner in Woburn, Massachusetts. "Otherwise, their assets would be depleted in no time."

CONSIDER LESS EXPENSIVE OPTIONS

Nursing homes are not the only option. These days it is more like a "continuum" of care. For instance, parents might move in with their adult children. Or they might prefer to stay right where they are, perhaps with a home health aide coming in occasionally.

The next level up might be an assisted-living facility, which should offer an array of services for independent living, and even different levels of care within the same facility. Those will not cost as much as nursing homes, at $123 per day or $3,750 a month on average, according to Genworth.

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IN THE SPOTLIGHT NuEar Heaing Center

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From the moment you walk in our front doors in Tucson, to the moment you walk out- We guarantee precise care and satisfaction. We understand that the journey to better hearing begins with a partnership with a hearing health specialist that understands the difficulties hearing loss places on one’s life. We have the knowledge and technology to guide you towards a hearing aid that will fit your unique lifestyle. We do all of this with the utmost care and respect because we know that Tucson is a place worth hearing.

Conveniently located off of East Grant Road, we are proud to serve our Tucson community in their journey to better hearing.

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For the past four years I have merged my love of art and technology by providing hearing health care for the people of Chicago and am thrilled to now do the same for the people of Tucson. As a hearing practitioner, my goal is to, quite frankly, change people’s lives. Better hearing can take people from isolation and return them to life, fully engaged with family and friends.

One of the best experience of my career was seeing the change in my Father in Law when he was fitted with hearing aids. They truly changed his life.

At her weekly bridge game, a past patient was quiet and aloof because she just couldn’t hear her friends. Now she is engaged and thriving. The smile on her face when she recounted her experience was heartwarming.
Another client had struggled at work because he couldn’t hear his supervisors and coworkers. This caused him great anxiety and affected his work performance. Now he is back ‘in the game’ and experiencing great personal and professional successes thanks to his customized hearing plan.

My core values are Honesty, Integrity, and Family. I graduated from Utah State University with a Bachelor of Science degree. I am an Eagle Scout and served as a missionary for the Church of Jesus Christ of Latter-day Saints in Zimbabwe, Africa. My beautiful wife Jenny and I are the parents of five fantastic daughters and an amazing son.

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How To Care For Health Care Costs in Retirement

How much do you figure you'll pay for health care expenses after you retire? You're probably underestimating.

A married couple, both age 65, will fork over an estimated $275,000 over their lifetime on medical costs, according to Fidelity Investment's "2017 Retiree Health Care Cost Estimate." That includes Medicare premiums, co-payments, deductibles and out-of-pocket expenses for prescription drugs. 

However, it's likely that this same couple will pay a lot more than $275,000 because Fidelity's estimate doesn't include items such eye exams and glasses, hearing aids, dental care and long-term care. And if you retire before age 65, the number will be significantly higher.

Medical expenses represent one item in retirees' budgets that can increase significantly when transitioning from your career job into retirement. According to the U.S. Bureau of Labor Statistics, employers on average subsidize 80 percent of the cost of health care premiums for their active employees and more than two-thirds of the costs for family coverage. 

HHS Secretary Tom Price says "we believe in the guarantee of Medicare for our seniors"

But these subsidies typically go away when you retire. As a result, you'll usually end up paying for the full cost of medical insurance premiums if you retire before age 65, when you're eligible for Medicare. After that, the federal government subsidizes about three-fourths of the cost of Medicare Part B, although you'll still pay substantial deductibles and co-payments.

One erroneous conclusion that some people might make after reading about the Fidelity study's results is that they need to have the full $275,000 amount set aside when they retire, to be dedicated exclusively to future medical expenses. While that might be great if you can swing it, most people don't have that luxury, and fortunately you don't need to do that. 

You can pay for much of your medical costs with your regular retirement income, such as your Social Security benefits, employer pensions if you have one, money you make working in retirement and your withdrawals from savings.

By making smart choices with Medicare and supplemental insurance, you can turn large, unpredictable expenses into regular monthly premium payments that you can then factor into your ongoing retirement budget. Because Medicare has substantial deductibles and co-payments that can amount to thousands of dollars each year, financial advisers highly recommend that you buy supplemental medical insurance in one of two ways:

1.      Purchase a "Medigap" plan that pays for part or all of Medicare's deductibles and co-payments, combined with a separate insurance plan that covers the cost of prescription drugs under Medicare Part D.

2.     Purchase a Medicare Advantage plan (MA) that typically integrates inpatient care, outpatient care and the cost of prescription drugs, and usually covers much of Medicare's out-of-pocket costs.

You can also save for medical expenses with a Health Savings Account (HSA), in which contributions have a unique triple tax advantage:

·         They're deducted from your taxable income when they're made

·         Investment earnings aren't taxed

·         Any amounts you withdraw for qualified medical expenses aren't included in your taxable income

Because of the triple tax advantages, HSAs are like a super-IRA, and you should save as much as possible in these plans while you're working.

Qualified medical expenses that can be paid from an HSA include:

·         Medical, dental, prescription drug and vision expenses, including any deductibles and co-payments

·         Premiums paid after age 65 for Medicare or for your employer's retiree medical plan (but not for Medicare supplement plans)

·         COBRA premiums

·         Long-term care services

·         Premiums for qualified long-term care insurance

You'll also want to plan for vision and dental expenses when you retire because Medicare doesn't cover these costs. Some MA or Medigap plans might help with these costs, so you'll want to ask about that when you're shopping for these plans. Another smart tip: Take full advantage of your employer-provided medical plan's vision and dental benefits before you walk out the door of your career job.

Long-term care is the wild card in your retirement planning. A lengthy stay in an assisted living facility or nursing home can quickly drain your retirement savings, even if you have substantial savings in an HSA, 401(k) or IRA. Ideally, you want to develop a thoughtful strategy to protect yourself and your family against potentially ruinous long-term care expenses, including some combination of:

·         Buying long-term care insurance

·         Holding home equity in reserve

·         Taking out a reverse mortgage line of credit and holding it in reserve for long-term care

·         Maintaining a separate investment account for long-term care, including an HSA

·         Buying a qualified longevity annuity contract (QLAC) that starts a lifetime income at an advanced age, such as age 80 or 85.

When you consider your potential costs for health care, you might be convinced it's a smart idea to work longer, which is a very reasonable -- and wise -- reaction to these threats. Working longer can not only extend subsidized medical care coverage from your employer, but it can also allow your Social Security benefits and savings to grow as long as possible.

You have a lot to consider when it comes to your retirement planning. But if you start now, you'll be prepared when the time comes to leave the work force entirely.

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