In all of human existence, this has never happened. You are more likely than not, to live to 85 years old. So are your children. And your grandchildren. In fact, a baby born today has a 50% chance of living to 100. The problem with aging in America is that as a society, we’ve never dealt with this before – never had to. Consequently, we’re woefully unprepared.
Aging isn’t a Baby Boomer issue. It’s important to realize that the new longevity is a permanent shift in humanity.
What does this mean for you? For me?
Well, for Jim Fox in the documentary Coming of Age in Aging America, and for many other Americans like him, it means difficult choices. Jim quit his salaried job to move across the country and take care of his elderly mother full time. It was a personal sacrifice. At the same time, it’s what he and his siblings wanted for their mother.
Jim’s case is commonplace. Many Americans in the workforce are leaving their secure and sometimes lucrative jobs. They’re taking on the task of full time long-term care of an elderly parent. And it’s costing these individuals an average of $300k in lost wages and social security contributions over their lifetimes.
Aging in America is Not Just a Boomer Problem
Boomers are the first generation where the average life expectancy is 85, not 62. The first generation where following generations aren’t larger in number. The first generation that can’t count on government programs to support and supplement their old age.
We didn’t expect to live two decades beyond retirement age, and now we have to make our own plans, assemble our own resources, and figure out for ourselves how to live an extra 20 years on financial resources designed for three to five years, while America figures it out too.
Many GenXers and Millennials aren’t prepared for their Boomer parents’ old age either. They’ve depended on their parents for a good portion of their lives and the role reversal is impossible for them to fathom.
Like many other millennials, Jim’s daughter is afraid. She can’t envision starting her own family and possibly needing to care for her father too. Millions of her generation are burdened by student loan debt. That alone makes home ownership and retirement savings seem like fairy tales.
Add to that being sandwiched between their children’s needs and their aging parent’s needs, and it’s overwhelming. Who can pay down student debt, raise a family, plan for their children’s college and futures, and take care of aging parents?
And on it goes. By the time millennials turn 65, the number of people over 65 will have almost doubled.
How can we adapt as a society, as communities, and as individuals, so we can celebrate the gift of a longer life instead of be immobilized by the fear of aging in America?
If you’re concerned about not being able to care for yourself until age 85, and are unwilling to place the burden on your children, get help sorting out your options.
Coping with the New Reality of an Aging Society
In the documentary Coming of Age in Aging America, by award-winning filmmaker Christine Herbes-Sommers, these are the challenges the film takes on. It explores a new consciousness around aging, looking at it as a vast and permanent social issue that belongs to everyone, instead of the more common and short-sighted Us vs. Them mentality. The film also offers possible actions, and showcases models that are already working. Here are a few conversation starters from the film.
What Worked for the Silent Generation
For the Silent Generation (1927 to 1945), birth to 20 was a period of childhood and education; 20 to 65 was when you worked, got married, and raised your family; and 65 was when you retired to a life of leisure.
Each phase of life was supported by government policies – public schools, New Deal Legislation, student loans; then the GI Bill, increasing wages, low cost home loans, and suburban housing developments; and finally Social Security, the Older Americans Act, and Medicare.
Since life expectancy was 62, you’d likely only have a few years of life left after you retired and social security would could pay out for those few years. It all worked.
It doesn’t work anymore.
What Government and Business Can Do Now
According to experts, we now need institutions that provide opportunities to work longer and change careers, to have the flexibility to care for a loved one, and to rethink the physical space. We need to envision new models of being, because longevity is changing everything about aging in America.
Raise the maximum taxable income cap for social security. In 2017, the number is $127,200. Once people reach that cap, they stop paying into social security. Since 93% earn less than the maximum income cap, they wouldn’t be affected by raising it. Lifting or eliminating the cap would collect $687 billion over a decade and stabilize social security for years.
Offer a year of social security benefits to those in their 50s. This would help people transition out of demanding careers, and rethink or plan for the next life phase. They could go to school, learn a new skill, or start a business. Older entrepreneurs currently own one-third of new U.S. businesses. Imagine how this transitional year could impact the last third of life.
Rethink work, productivity, and the relationship to personal life. Abandon the linear education, work, retire paradigm in favor of doing all three simultaneously. Spread the years from that 20-year retirement out over the span of working life. Give time to parents of young children, or people taking care of aging parents. Phase into and out of work more slowly, and get continuing education throughout. We’d work longer, but with a lot more flexibility built in for our personal lives.
Change working conditions to support older workers. Currently, only one in four companies are attempting to stop what’s called ‘brain drain’ and keep experienced employees. Creating a work culture that makes employees not anxious to escape in the end means creating a culture of intergenerational interdependency.
Encourage and support immigration. New waves of immigrants are what have helped America have slower societal aging than many other countries like Germany or Japan. They’re already facing significant problems related to not having enough people to take care of the aging population. Immigration fosters a younger population.
What Cities and Smaller Communities Can Do Now
In the documentary, small town Norcross, Georgia, serves as a model for the future of making communities work for everyone. They developed a decade-long plan to morph the small town into an all-ages lifelong community.
The philosophy is that if you can make a community work for young people and for old people, it will work for everyone else. Norcross is accomplishing it with multiple targets at the same time.
Take a multi-target approach to change. Walkability, social interaction, access to public services, and multi-generational housing are priorities. Mixed use live/work zoning will accommodate post-retirement people, so they can work from home as maybe a lawyer, hairdresser, B&B host, or any number of work scenarios.
Rethink housing design. Homes are being deliberately built with flexible space for elevators, offices, and extra rooms that can change purpose over time. It’s a far cry from the suburbs built for families where half of America’s aging population now languishes in isolation.
Start conversations with stakeholders. Larger cities dealing with even more complex needs are holding town meetings with aging adults to gain insights about pressing problems. Conversations include subsidized affordable housing, work force training for older workers, multi-generational communities, accessible public services, and fixed incomes that don’t support longevity.
What Individuals Can Do Now
To positively move forward in our own lives, the film suggests we need to change our expectation that we can (or even want to) retire to a life of leisure at age 65. Rather, we should consider what we really want to do with those extra twenty years.
Rethink retirement years. Following his mother’s death, Jim used the opportunity to make a career shift from hospitality management into eldercare – a career that resonated with him after caring for his own parent. Others have done the same, switching out of long careers into completely different, and often more meaningful, work. In fact, many boomers are coming full circle to a re-emerging activism through second careers.
Live in multi-generational, mixed-use communities near accessible public services. Isolation has negative psychological and physical effects on health and quality of life. Moving into a more social environment that includes and services the aging population encourages a more positive outlook and sense of independence. Moving from isolating suburbs early can make aging in place easier and more pleasant.
Plan for the possibility of needing long-term care. Realistically, aging is not all flowers and fairy dust. Seniors with disabilities, or cognitive diseases will need substantial long-term care. Statistically, seventy percent of people living beyond 65 will need some form of care in their lifetimes. Since you can’t predict if you’ll be the one to need care or not, one solution is purchasing hybrid long-term care insurance.
Long-term Care Insurance as Part of the Solution
What makes one-time pay, hybrid long-term care policies attractive is their triple-play. If you need to use long-term care, the benefits are flexible and can be used to age in place, even paying family for your care; you have complete control. If you don’t end up needing to use long-term care benefits, the policy provides a tax-free death benefit for your family. Or, if at some point you change your mind and cancel your policy, you get your money back.
Moreover, new long-term care policies protect your retirement savings from being depleted in a short time by an unexpected long-term care event, or significant cognitive decline. You can only buy long-term care insurance when you’re healthy, not when you’re already in need of long-term care. So if there’s a “gotcha,” it’s that like fire insurance, you can’t buy it when the house is already burning down.
For an in-depth look at the implications of aging in the America, watch the hour-long documentary Coming of Age in Aging America, then begin reimagining the last third of your life. What will it look like? Who will you be? What will you do? How will you pay for it?
It’s easy to see the importance of financial planning that provides a safe future for you and your spouse during the last third of life.
Capital Retention hybrid long-term care insurance can help you achieve the financial security you want, need, and deserve. You can get more information by calling 844-805-3557 or 712-339-9128.
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(Sources: Coming of Age in Aging America and The Six Generations Living in America)