Be In Charge of Your Aging

Financial Planning Association

When financial planners talk about the importance of "envisioning" one's retirement, most people think of the fun stuff they want to do: travel, tennis or golf, moving to a vacation spot, visiting grandchildren and friends, gardening, reading, doing volunteer work, or even taking on part-time paid work they've always wanted to do.

But what about when we grow older in retirement and become less independent? What happens when travel becomes more difficult, or impossible? When our hearing or our knees weaken? When we forget to take medications or pay bills? When we can no longer garden or play golf, or clean the house?

This is not fun stuff to think about. Most of us don't want to admit to ourselves or to those around us that we can no longer do some of the things we've always done for ourselves. We don't want to narrow our life by giving up driving or traveling.

Thus, most people wait until they're compelled to make changes, or a friend or family member intervenes. But waiting until the last moment often causes emotional stress for everyone, and it can have significant financial consequences because some options may be lost because of the delay.

That's why "envisioning" this stage of your life is as important as planning for the joyous things we want to do during retirement. A California CERTIFIED FINANCIAL PLANNER™ practitioner has even prepared a "Lifestyle and Circumstances Audit" for his clients to help them assess and prepare for the inevitable changes in their lives.

You can do your own assessment by first listing the activities that enrich your current or planned retired life and what physical and mental skills you require to carry out those activities. Do you travel a lot or go to cultural events? If so, do you drive, or depend primarily on public transportation? Do you exercise or play sports such as tennis? Do you spend a lot of time on the phone or in front of your computer sending e-mails to friends and family? Do you prepare most of your meals or eat out?

As we physically and sometimes mentally decline, we will likely lose some of the skills required to do these activities. These declining skills won't necessarily force us into assisted living or a nursing home, but they will restrict us. If our eyesight or our health falters, for example, driving ourselves to the symphony or 500 miles to see family may become impossible.

Of course, eventually we may not be able to carry out one or more of the classic six activities of daily living used to gauge whether someone should hire professional help or move into assisted living or a nursing home: dressing, bathing, eating, moving from one place to another, toileting, and staying continent. Or we may suffer from cognitive impairment such as Alzheimer's.

By contemplating these possibilities, you can make contingency plans. Take your living circumstances, for example. Say you currently live in a two-story home with your bedroom upstairs and the laundry room in the basement. What happens if climbing the stairs becomes difficult or impossible? Will you put in an automated chair lift? Or would you prefer to move to a single-story home? If you live miles from the nearest town, would you consider moving to the city where you're closer to medical assistance or perhaps family? Is an option a retirement community or even an apartment in a continuing care community where you can progress into assisted living or a nursing home should that need arise? What will be the financial impact of these options?

Advance preparation and thought helps us better recognize detrimental physical and mental changes as they occur, and thus give us more time to make arrangements. How severe should a problem become before triggering a planned change in circumstances? For example, should you move from that two-story home before a problem actually surfaces, move at the first inkling of it, or wait until you no longer have a choice?

Discuss these activities, potential physical triggers, and options for change with your spouse or your children well before problems might arise. It will help them be better prepared to help you should changes be required.

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December 2004— This column is produced by the Financial Planning Association™, the membership organization for the financial planning community. If you use all or part of this column, please credit FPA® and provide a link to FPA's Web site at www.FPAnet.org/Public.

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CFP®, CERTIFIED FINANCIAL PLANNER™ and the federally registered CFP (with flame logo) are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete CFP Board's initial and ongoing certification requirements.