Aging: The Great Common Denominator
By Esther Peterson
Retirement Section News, January 2023
Every journey through life is unique, but we share common needs and can learn and gain wisdom from each other’s experiences. Our most fundamental needs for survival are physiological and social, including food, clothing, shelter, health, personal security, and financial security. We work toward meeting these needs in one way or another throughout our lives. But then there is aging, which happens every day. As we age, the parameters and variables that inform our decisions may change significantly and without much warning. What happens then?
In 2022, the Society of Actuaries (SOA) Research Institute worked together with Financial Finesse to publish the “Late-in-Life Decisions Guide” (Guide), which addresses concerns of individuals in the latter stages of retirement. It provides practical steps and resources for making important (and possibly difficult) decisions that are often ignored. Sometimes that’s due to lack of education or awareness of options. The Guide focuses on four basic needs: healthcare, housing and transportation, managing finances, and building a support network. It serves as a tool for retirees and can increase awareness of the issues facing the aging members of our communities.
In “Uncertainty in Aging: Are Retirees Prepared to Face the Risks?” (September 2022 SOA Retirement Section News), I interviewed retirement actuaries regarding why the Guide matters and how it can be used effectively. Late-in-life decisions can have a major impact on overall well-being. The article provided examples of how these decisions can be pivotal in the context of money management and housing choices.
In this article, we will discuss aging at home, aging alone, aging in community, and priorities for the future. Can aging at home be a realistic option? What challenges are unique to aging alone and how can they be addressed? What does it mean to benefit from community later in life? How can we empower individuals and unlock opportunities for people to work together in community? Thank you to Phyllis Mitzen, a prominent leader in gerontology social work, and Sara Rix, senior strategic policy advisor for the AARP Public Policy Institute, for sharing their expert insights and visionary perspectives.
Interview with Sara Rix—Aging at Home and Aging Alone
Esther Peterson (EP): How are continuing care at-home programs structured and in what ways do they offer a good alternative to continuing care retirement or life plan communities?
Sara Rix (SR): As tempting as retiring to some exotic locale might sound at times, the fact is that most people want to age in place, perhaps after a move to be nearer their children or escape the cold. Family caregivers help make that choice possible, as do growth and innovation in products and services for the stay-at-home elder market.
Technological advances enable children to check on elderly parents, remind people when to take medicines, or summon emergency assistance in the event of, say, a fall. Services can be engaged as needed to meet numerous requirements, such as managing money, housekeeping, meal preparation, and help with the tasks of daily living. However, someone has to know what services are needed and where to find them, vet the providers, contract for and monitor the work, arrange payment, and figure out what to do when something goes wrong. The management of at-home care and services can be challenging for the elderly themselves, especially if ailing, and for families, particularly if they live at a distance.
Continuing care retirement communities, also known as life plan communities, take over the management of elder care and service provision for residents in their facilities, thus eliminating much of the uncertainty about how one will cope in the event of physical or cognitive decline.
However, the number of people who want to remain in their own homes far exceeds the number likely to move into a life plan community. A more recent model of care that might prove attractive is continuing care at home (CCaH), a program usually affiliated with a life plan community that brings needed care and services to the home. A care coordinator assesses need and identifies, arranges for, and manages the required care, which is designed to keep older people safely at home. In a sense, a CCaH program is simply a life plan community—or much of it—brought to one’s doorstep. The opportunity to socialize with fellow residents is obviously lacking, but CCaH members may be able to participate in the programs and campus activities of the affiliated life plan community.
Because CCaH programs do not require a home buy-in or rental, entry fees are lower than those of life plan communities. Nonetheless, the entry membership fees may amount to many thousands of dollars. Monthly fees, which can vary substantially depending on the level of contracted care, must be paid from the outset, even if the member does not require any services.
Prospective CCaH members must be healthy to gain admission to a program. Projected revenues and expenditures are based on the assumption that CCaH members will pay monthly fees for some time before needing care. Life span communities also depend on the revenue from residents able to live independently and thus contribute to the cost of services for those in need of them, although it is sometimes possible to bypass independent living for a higher level of care.
CCaH programs may be a feasible option for people who want to be proactive about their future care needs but who do not, for whatever reason, wish to live in a life plan community. Although members may still need another type of care at some point, a CCaH program may help delay a move. And because these programs eliminate much of the individual responsibility for care management, they may be especially appealing to solo agers or those whose children are not close by.
While CCaH programs might seem like an ideal arrangement for the many millions of Americans who hope to age in place, they are still relatively untested and not widely available. Many questions remain unanswered, particularly with respect to the availability, training, supervision, and payment of care providers, who are in short supply now. Increasing wages and benefits to expand the pool of labor raises questions about the sustainability of current and projected CCaH fee structures. Similar questions arise if the population aging at home requires higher levels of care for longer periods of time than estimated. What does seem certain is a growing demand for CCaH-type programs as rising numbers of elderly seek ways to age safely at home and as life plan communities seek to expand their client base by offering CCaH programs. Whether CCaHs can meet that demand remains to be seen.
EP: How can the “Late-in-Life Decisions Guide” help solo agers who have no available family members to help them?
SR: Pondering the likely frailties of old age and what to do about them is probably no one’s idea of a good time. However, it can be particularly challenging for people without close social ties since so many personal, financial, and legal decisions require involving someone else. Not everyone has an obvious or available “someone else.”
Family members, notably children, provide the bulk of informal care in the United States. Those moody, disagreeable, indolent teenagers generally evolve into responsible adults who become a vital resource for elderly parents no longer able to cope easily with everyday activities.
Yet millions of older Americans live alone, and many of them have neither children nor a spouse or partner. Often referred to as “solo agers,” they comprise a diverse group. Men, perhaps surprisingly, account for a sizable percentage of the solo agers.
Solo agers, of course, may have friends, neighbors, nieces, nephews, and/or other relatives who care for and assist them as they age. Neighborhood “villages” offer their members supportive services that promote aging in place. Religious groups may be there to pitch in. On Facebook, there is even a private group calling itself “Elder Orphans.” But however eager the alternatives are to help, few of them are able or willing to shoulder the responsibilities that children, in particular, so often do.
Regardless of marital status or the presence of children, everyone needs to work toward a financially secure old age and prepare for potential physical and cognitive declines that may require assistance. Toward that end, the “Late-in-Life Decisions Guide” published by the Society of Actuaries and Financial Finesse is an informative resource with practical recommendations that should prove helpful to readers as they begin to plan for what lies ahead.
The Guide alludes to what it calls “solo seniors” and acknowledges the unique efforts needed by “single retirees” to maintain a support network, but it does not dwell on those solo agers for whom a crucial question is, “Who will see that my wishes will be carried out and my needs met if I cannot do that myself?” Estate planning—e.g., writing a will, establishing advance directives, and preparing financial and healthcare powers of attorney—can be an important step toward answering that question, but it is also a step that many solo agers are not able to take.
Assembling the required necessary documents may be the easiest part of estate planning; there are templates for most of them, as well as lawyers to advise and prepare. A stumbling block arises when it comes to appointing a personal representative, agent, or attorney-in-fact. Their services are typically required when someone is at their most vulnerable, and that requires a representative—sometimes more than one—who can be trusted to do the right thing at the right time.
The name on a form may seem like a small thing to worry about in the grand scheme of retirement planning, and that may be the case for those with children or a spouse. But it can become an insurmountable barrier when one is aging alone without close social connections. As a result, crucial decisions may be put off until it is too late, at which point the courts may step in to appoint a legal guardian or financial conservator.
Professionals who help people prepare for and move through retirement are not expected to be relationship counselors or social secretaries; they cannot create social networks for clients. However, they must understand the retirement planning obstacles of people who lack robust social networks and the care those networks could provide. There may be no simple fixes that ease the uncertainties of people aging alone—children are not going to materialize; partners can be hard to find. But financial planners, advisors, and elder advocates—even writers of guides—should be encouraged to address how aging alone may complicate planning for old age. Otherwise, the obstacles may never be overcome.
Interview with Phyllis Mitzen—Aging in Community and Priorities for Next Steps
EP: How can communities come together for people to support one another later in life?
Phyllis Mitzen (PM): Communities allow us to form bonds of friendship. I live in a high-rise community, Skyline Village Chicago, where most buildings have doormen, who, by the way, are great connectors. Many of the people who live in these buildings are single women who have worked all their lives. Their connections have been with work, and suddenly these relationships are cut off or are different because they're no longer going to work. So how do you establish new friendships? What does friendship mean and what do friends owe one another as we age?
Skyline Village Chicago is one of four or five villages in the city, with several villages in the outlying areas and more villages across the country. I think there are more than 300 of them now, older adults coming together to determine, in their neighborhood, how they want to support one another. In fact, there’s an Association that provides guidelines on how to establish a village, The Village to Village Network, Inc. (www.vtvnetwork.org). The purpose of the village, of course, is for older adults to come together and to advocate on their own behalf.
The exercise equipment where I live is one example of that kind of advocacy. I was the one who happened to have seen this kind of adult exercise equipment when I took a trip to Shanghai. I came back and said to our local park district, “You know, we don't have equipment outside. We’ve got indoor equipment that is only available occasionally because the college students are using it all the time. And there's no outdoor equipment besides bars and the walking trail that is effective for older adults. We don't even have a pickleball court. How can we make this more accessible and more inviting for older adults to come out and play?” As our Alderman Brian Hopkins once said, “People don't outgrow playgrounds. Playgrounds outgrow people.” I used that tagline over and over again, and persistence paid off because we now have playground equipment in our park. I talked to the president of our Park District Advisory Council yesterday and he said other parks are clamoring for the equipment now that we have it.
Advocacy on our own behalf is something that Skyline Village Chicago and other villages do. We may want to figure out how we can have more intergenerational programming. How do we get together and learn about what it is that we need as older adults? Some of this is addressed in the Guide. Advocacy is really important, as well as educating yourself and getting together with other people to help you advocate. We older adults were young adults in the ‘60s and ‘70s, and we did a lot of advocacy then. How do we use those tools now to advocate on behalf of ourselves and for the people who are growing old behind us?
EP: Given the challenges later in life and how we are currently addressing them in the United States, where do you suggest we go from here?
PM: First, we need to break down the barriers of ageism. It creates problems with how others see us and causes us to make negative assumptions about ourselves. By the time you’re 60, you’re moving downhill, and you better go hide or you better defend yourself or you better say, “Well I'm not one of those people.” Others are making assumptions about you. Any mistake in your language or simple dumb things that anybody could do are ascribed to cognitive decline because you're old. The expectation when you’re older is that physical decline does happen, and mental decline does happen. But making assumptions that it has happened is debilitating. Then there’s the invisibility of being old, when you get served last because it was more important to serve everyone else first. That’s an awful feeling.
Second, affordable housing and transportation that accommodates potential needs later in life are difficult to find. We have not invested well in that. Some states and counties are creating strategic plans on aging, which is a step in the right direction. Currently, housing options are limited and very, very costly. So affordable housing is a huge issue and I think more attention needs to be paid to that. Public transportation tends to either be limited or not very accessible. And again, that gets down to local municipalities creating plans and the states supporting them in those planning efforts because transportation tends to be very local. Collaboration between municipalities on transportation issues needs to happen. Breaking down silos to make transportation and housing more affordable and more accessible is going to be critical.
Finally, let’s educate the elderly in our communities regarding resources available to them. For example, every state has a State Health Insurance Counseling and Assistance Program (SHIP) that provides free counseling services to help seniors understand their health insurance options. The counselors are not insurance agents, but individuals who are trained to navigate Medicare and help you make the best decisions. I like to call it a best-kept secret, but it’s dangerous to keep it a secret. Another great resource is the Long-Term Care Ombudsman Program in each state, which is for people who live in nursing homes and in congregate facilities, or who are receiving home care. An ombudsman gives voice to the recipient of care to ensure their health, safety, welfare, and rights. That’s the other best-kept secret.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.
Esther Peterson, ASA, MAAA, EA, is a consulting actuary for Milliman, Inc. Esther can be contacted at esther.peterson@milliman.com.