The biggest fear BEFORE retirement is money. Pre-retirees worry about whether they’ve saved enough and if it will last. The biggest fear AFTER retirement, however, is health. Once retired, people worry most about getting or staying healthy so they can do the things they want and have a good quality of life. So, depending on where you fall on the retirement spectrum, health is either already a major concern of yours or it soon will be. With that in mind, a few studies caught my eye recently that I want to share with you because they can help boost your memory and extend your life.
How blood pressure affects your memory. A recent study by the National Institute of Health (NIH) examined whether more aggressive treatment of blood pressure could improve heart health. The results were so impressive that they stopped the study early and lowered the systolic blood pressure recommendations from 140 to 120 (and overall blood pressure recommendations to no more than 120/80). That more aggressive treatment reduced the risk of heart attack and stroke by nearly a third and death by almost 25 percent. They did further research to see if there were any other benefits and last week they announced that bringing the systolic below 120 also reduced the risk of cognitive impairment by about 19%. Cognitive impairment can lead to dementia which can lead to Alzheimer’s. The takeaway? Go get your blood pressure checked and if it’s above 120/80 you should talk to your doctor about bringing it down.
How relationships affect your health. While I was reading about the blood pressure study, another NIH study caught my eye. It summarized the growing body of evidence that shows how strong relationships and social connections can have a positive impact on your mental and physical health. Here are a few of the findings:
- Relationships have a cumulative impact on your health over time.
- People with weaker relationships and social connections are much more likely to die prematurely.
- Weak social ties are directly linked to a higher probability of developing conditions like heart disease, high blood pressure and cancer.
- Once you develop those conditions, you’re more likely to die from them if you have weak social ties. For example, heart patients with weak social connections are twice as likely to die of cardiac arrest than patients with strong social connections.
- Weak relationships also affect your immune function and your ability to recover from illness.
Why do relationships have such an impact? One reason is that behavior explains roughly 40% of premature mortality and relationships have a positive impact on our behaviors. You tend to take better care of yourself when you have people you care about. Another reason relationships help? Good relationships reduce stress and help foster a sense of meaning and purpose, both of which can help improve your mental and physical health. The takeaway? Work hard to foster meaningful relationships with friends and family. It can greatly impact your overall health, longevity and quality of life.
Money is an important ingredient to a successful retirement, but it’s meaningless if you’re not healthy enough to live life and do the things you want to do. So work hard to get your finances in order, but take these words from Emerson to heart: “The first wealth is health.”
Memento Mori. In English it means: “Remember that you will die.”
This has been a tough couple of weeks for me. My mom died very unexpectedly after a brief illness. On January 29th, I met her for dinner to celebrate her 67th birthday. We had a wonderful time. On February 5th, she was hospitalized with what turned out to be a terrible infection. On February 9th, she was gone.
One week, we were talking, laughing and telling stories over a nice meal. The next week, in the small hours of the morning, I sat by her hospital bed, held her hand and told her I loved her as I watched her last heartbeat move weakly across the monitor. I don’t have the words to convey how jarringly painful that was.
Still, I’m grateful. Grateful to have had her as my mom. Grateful to have always had a wonderful relationship with her. Grateful to have made some new memories just a week before she died. And yes, grateful for the reminder of mortality. The Memento Mori. One of my favorite verses is Psalm 39:4.
“Show me, Lord, my life’s end and the number of my days;
let me know how fleeting my life is.”
I like that verse because I often need the reminder. I know I’m going to die, but I don’t always live like I believe it. Maybe some of you are guilty of that too. If so, consider this your reminder.
If you died today, would you go in peace without a single regret? Or would you, like most of us, feel bad about the things left undone or unsaid? The relationship that needs mending? The affairs that need to be put in order? Sit with those thoughts this week. Write them down. And then act. You know what you should do. So do I. The challenge is to make sure that knowing transitions into doing and believing becomes behaving. You and I have been given an amazing gift: Today. Use it wisely.
There is a lot of uncertainty with healthcare lately, but two trends will likely continue: It will continue to get more expensive and you will continue to be responsible for more and more of the costs. Even with Medicare, it is estimated that the typical retiree will need between $200,000 and $400,000 to pay for health expenses during retirement. With that in mind you should seriously consider using a Health Savings Account (HSA) to help fund your retirement health expenses. You might be using one now, but if you’re like most, you’re not using it to its full potential. Let’s change that.
What is an HSA?
An HSA is a tax advantaged medical savings account available to people enrolled in high deductible health plans. Think of it as an IRA for your medical expenses. Unlike IRAs, however, HSA money is triple tax free: going in, as it grows and coming out. That is a huge advantage. The only caveat is that you need to spend the money on qualified health expenses or you’ll pay taxes and a penalty. The list of qualified expenses is rather long and even includes things like long-term care insurance premiums. Here are a few quick facts on HSAs:
- Contributions are tax deductible.
- The assets in the account grow tax free.
- Withdrawals for qualified medical expenses are tax free.
- If you take the money out for non-qualified expenses, you will pay taxes and a 20% penalty.
- Unlike FSAs, HSA dollars are not “use it or lose it.”
- Contributions can be made by either you or your employer.
- 2017 annual contribution limits are $3,400 for an individual and $6,750 for a family.
- Those over age 55 can make an additional $1,000 catch-up contribution each year.
- Money in the HSA can be invested in stocks, bonds and mutual funds.
A few things change at age 65…
- Distributions after age 65 are never subject to a penalty, even if not spent on qualified medical expenses. For non-qualified expenses just pay the taxes and use the money for whatever you want.
- At 65 you can pay for all Medicare premiums except Medigap with tax free HSA distributions.
- Once you enroll in Medicare, you can no longer make contributions to an HSA, but you can continue to use the existing money in your HSA.
Your best strategy
HSAs are growing in popularity, but they are not being used to their full potential. Because of the HSA triple tax advantage (in, out and during), the money should be invested for growth and allowed to compound as long as possible. Instead, here’s how most people use their HSA: 1) Add some money, 2) Leave the money in a no risk/no return money market, 3) Use the money as soon as they incur a medical expense.
Here’s how you should use your HSA: 1) Contribute the maximum amount allowed each year, 2) Invest the money in stocks, bonds and/or mutual funds, 3) If possible, pay for your current medical expenses out of pocket and allow your HSA money to grow until you retire. By doing that you are getting the most bang for your buck and creating a pot of money for retirement that can be used tax free for medical expenses or for anything else as long as you pay the tax.
What makes a good life? Now there is a question with universal appeal! Who wouldn’t want to know, in advance, what types of things would make them healthier, happier and more fulfilled?
Unfortunately, research shows that we’re not very good at predicting what will make us happy. I call this the “I want to be rich and famous and then all my problems will be solved!” fallacy.
Just because we’re not good at predicting, however, doesn’t mean that we’re destined to a lifetime of trial and error in search of the holy grail of happiness. There is plenty of research on what works. Indeed, one of the longest studies has been going on for the last 75 years.
It’s called the Harvard Study of Adult Development. Started in 1938, the study follows two groups of people. The first group was made up of 268 Harvard sophomores. The second group was made up of 456 young men from inner-city Boston.
Every other year, researchers follow up with the surviving study participants and interview them extensively about everything from their finances and careers to their relationships and social activities. Then every five years, they do an extensive evaluation of each participant’s health, including x-rays, blood tests and echo cardiograms.
Robert Waldinger, the current director of the study (he is the 4th over the past 75 years), detailed some of the key findings in his excellent TED Talk. Here is a summary:
- Relationships and social connections are really, really good for us. They make us happier and healthier and they help us live longer. Those in the study with good relationships experienced all of those positive outcomes. Those in the study who described themselves as lonely, however, had a shorter life expectancy, reported being less happy and had worse mental and physical health.
- The quality of our relationships makes a big difference. The better the relationships, the more positive benefits people experienced. Participants who were the most satisfied in their relationships in their 50s were the healthiest in their 80s.
- Good relationships protect your brain. Participants who reported having good relationships and being in healthy marriages had minds that stayed sharper longer and they performed better on memory tests.
So back to our original question. What makes a good life? Rather than focusing on wealth, career or material possessions, the Harvard study shows that we would do well to focus on close, healthy relationships. Again, Robert Waldinger: “…over and over, over these 75 years, our study has shown that the people who fared the best were the people who leaned in to relationships, with family, with friends, with community.” Keep that in mind as you live life and plan for retirement.
Have you ever wondered what it would be like to live in one of those newfangled senior living facilities that are popping up all over the place? I was curious too. So I moved into one. I have a friend whose company owns a number of these retirement centers and they had just finished building a new one called Aksarben Village in Omaha. Since it was new and not yet full, I asked him if they had room for a temporary resident. He pulled a few strings and before I knew it my name was on the door of room 217, I was getting my hair cut at the in-house salon and I was sitting down to meals with my fellow residents. How did it go, what are these facilities like, what are the pros and cons of assisted living and what can you learn from the experience if you ever need this type of care for yourself or a loved one?
Who’s the new guy?
“Hi, I’m Pat,” she said as I sat down beside her for lunch. She was friendly and had that gleam in her eye that immediately puts you at ease. She quickly introduced me to the others at the table, including Dick, Kris, Martha, Dee Dee and Alice. We spent that first meal talking and laughing and I got to know a little bit about each one. I heard about kids, pets, spouses and stories from back in the day. They knew I was writing an article about assisted living facilities, so I asked them what prompted them to move. Most gave two or three reasons, but a common thread throughout revolved around health.
There aren’t many certainties in life, but this is one: Your health is going to change. Your mental and physical abilities will look different at 70 or 80 than they did at 50 or 60. Sometimes the changes are minor and sometimes major, but about two thirds of us will need help coping with those changes. In the past, as abilities diminished, your choice was either a curtailed lifestyle (e.g. no driving, less cooking, etc.) supplemented by whatever assistance friends and family could provide or a move into a nursing home facility that was very expensive and provided way more care than you needed.
The basic idea of the new retirement living options is that they broaden the spectrum of help available. They provide a base level of services that cover issues most of us deal with as we age and then provide a laundry list of à la carte services so that people get help where needed while still maintaining their lifestyle and independence.
I learned all about these different levels of care during the check in process. At one end of the spectrum are independent living facilities. As the name implies, residents basically live independently (similar to renting an apartment), but the facility provides services like housekeeping, home maintenance, some meals, security and a number of other amenities.
Assisted Living, where I stayed, is next on the spectrum and provides much more involved care. You have your own apartment (equipped with things like zero entry showers and an emergency response system), weekly housekeeping, laundry services, access to onsite medical personnel, transportation to outings or appointments and three restaurant style meals per day in the dining room. In addition you have a personalized care plan based on an assessment completed at admission and then updated every 30 days. This personalized care includes things like medication management, breathing treatments, bathing, grooming, using the restroom, mobility, dressing, safety checks and help with things like the phone or email.
People who need more intensive or specialized care—such as those suffering from dementia or Alzheimer’s disease—can move into either a memory care facility or a nursing home. These facilities have specially trained staff and caregivers who are there to provide care 24 hours per day.
Many facilities (including where I stayed) recognize that people may need all three of these levels of care at some point, so they build them together into a sort of senior living campus. This allows a person or his/her spouse to move up to the next level of care when needed.
Amenities and Activities
These new facilities are definitely not like nursing homes of old. For example, where I stayed there was a large movie theater complete with popcorn machine and iPad controls that are connected to cable, Netflix and just about every other streaming service you could imagine. There was a banquet room, private dining rooms for when family comes to visit and a full service kitchen with chefs who were more than happy to take any special requests. There is also a workout room, a physical therapy room, billiard room, beauty/barber shop, chapel, library and an activity/craft room.
Residents put these facilities to good use. Each month the lifestyle coordinator releases a new activity calendar containing church services, workout classes, movie nights, political discussion groups, cooking classes and trips to places like museums, stores and local restaurants. Partnerships with community organizations provide additional benefits. For example, the Omaha Public Library rotates new books each month through the library based on resident requests and Hy-Vee does free delivery of groceries each week to any resident that orders them.
As you can probably imagine, these services are not cheap. The more care a person needs, the more expensive it gets. Independent living averages about $2,500 per month nationwide. Memory care and nursing home care are higher, averaging $6,000-$7000 per month. Assisted living falls somewhere in the middle with the median cost of care nationwide around $3,600 per month. Studio apartments where I stayed start at $3,500, but you could spend much more if you wanted a 2 bedroom, 2 bath unit. The monthly care plan can add additional costs to assisted living. Where I stayed, services are given a point value and any additional costs are based on the point total. For example, someone who needs 2 medication reminders per day as well as assistance with shaving and getting dressed would have a point total of 14, which would cost about $285 extra each month.
How to pay
Except in very limited circumstances Medicare does not cover any long-term care costs. Medicaid does, but to qualify, you basically need to be both sick and poor. Even then, the amount Medicaid provides is limited, so most private facilities have a minimal number of beds set aside for Medicaid residents. Because of that, those who want to live in these facilities will need the means to pay for it, which can be a major obstacle. Most of the people I talked to were covering the costs from a combination of personal savings and payments from long-term care insurance. Those policies can be expensive, but one month of care will usually cost more than one year of insurance premiums, so having a policy can make financial sense if you end up needing it. In some cases, adult children were also helping to cover some of the costs so they could have peace of mind that mom and dad were well cared for.
Pros and Cons
One of the first people I met when I arrived at Aksarben Village was Colleen. She is suffering from mild dementia which affects her short term memory, but was otherwise healthy, sharply dressed and a kick to talk with. She has six kids and we spent the better part of an afternoon talking about each of them. On the last day of my stay, I actually got to spend some time visiting with one of her daughters, Sara Wachter. Her perspective gave me some great insights into the pros and cons of assisted living facilities.
Prior to moving into assisted living, she told me that her mom’s dementia was causing problems like social isolation, missed medications and missed meals. Even with a big, supportive family the memory loss was creating issues that were impacting Colleen’s health, safety and lifestyle. Their gerontologist said it was time to make a move so they started exploring options. “Mom grew up in this part of town, so it was a good fit,” Sara said. It wasn’t without challenges, however. Finding out she had to leave her home was initially a shock, but hearing the news from the gerontologist gave it more weight and took the pressure for that decision off Colleen and her family. Giving up her car was also tough, but since the facility had transportation the kids thought it was for the best. Expenses were also a concern, but Colleen’s mother lived to be 104 and was in a nursing home, so Colleen purchased a long-term care policy years ago which has helped with the costs.
As Sara and I talked, we saw her mom come down to the front lobby and start chatting with other residents. Dick Loneman, the driver at the facility, was getting ready to take them for an afternoon at the Joslyn Art Museum.
“Mom has thrived since moving in here,” said Sara. “The things she couldn’t take care of were all of a sudden being taken care of by someone else. Now she’s free to enjoy life and doesn’t have the responsibility for all those day to day things that had become so challenging for her. It’s less stressful for us too, because we know she’s in good hands.”
Quick Note: Sorry things have been quiet around the site for a few weeks. I was on vacation with family and friends and prior to that I was scrambling to get things wrapped up at the office. I’m home and caught up, so it’s back to regularly scheduled programming. Thanks for your patience.
Being on the road made me think of a question that clients often ask me:
“Does Medicare cover me when I travel?”
The answer, of course, depends. And it would be bad enough to get sick or injured on vacation without also finding out that Medicare won’t cover the expenses, so let’s take a look at whether your Medicare will travel with you.
What type of Medicare do you have?
Coverage varies depending on whether you have original Medicare or Medicare Advantage. Original Medicare is just Parts A and B (hospital and outpatient services) supplemented with a Medigap policy. Medicare Advantage is when you have Parts A and B and then also purchase Part C, which is coverage provided by Medicare approved third-party health insurance companies. Each of these types of Medicare works differently depending on where you travel.
Where are you going?
Original Medicare is extremely flexible within the U.S. (which includes all 50 states as well as Washington D.C., Puerto Rico, U.S. Virgin Islands, Guam, American Somoa and the Northern Mariana Islands.). There are no networks or preferred providers with original Medicare, so you can get care at pretty much any facility that accepts Medicare.
Medicare Advantage is a bit less flexible. Coverage is most comprehensive if you get care within the network of the private health insurance company that is providing you Medicare Part C. Generally speaking, the closer you are to home, the better your coverage will be. Having said that, if you’re having a medical emergency you can use your Part C pretty much anywhere in the U.S. and it will be covered. Call your insurance company if you’re unsure if a particular provider is “in network” or “out of network.”
Except in very limited circumstances, neither type of Medicare (original or Advantage) will provide coverage while you’re traveling outside the U.S. They may cover certain services while you’re on a cruise ship or while you’re traveling across Canada on your way to Alaska, but that’s about it. Some Medigap policies cover emergency medical services while traveling abroad, but there are limits to the coverage. They generally pay for 80% of covered services after meeting a $250 deductible with a lifetime maximum of $50,000. Bottom line—if you’re planning a trip abroad, it’s best to buy a separate travel insurance policy with generous health coverage. It’s also a good idea to get a policy that includes evacuation insurance. As you might imagine, it would be very expensive to pluck you from the bottom of the Grand Canyon or from the rain forest in Costa Rica if you are sick or injured. Those costs can run into the tens of thousands of dollars and neither Medicare nor Medigap covers the cost of a medical evacuation.
So before you hit the road, do a little research to make sure you’re covered and your trip will be a lot more enjoyable. Bon Voyage!
Photo Credit: Nick Kelly