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You Have to Plan to Live!

You Have to Plan to Live!

November 17, 2020

“You have to plan to live."  

This is a direct quote from a client of mine this week.  She is part of what I think of as the new sandwich generation.  As Americans are living longer, the age of the sandwich generation is being pushed back – she is in her 70s. 

People are living longer, but as medical science is advancing to keep the body functioning, a significant portion of those over the age of 71 are suffering from some form of Dementia. According to a recent University of Michigan study, (, 13.9% of those over the age of 71 have some form of Dementia – this category includes Alzheimer’s.  By the age of 90, that number goes up to 37.4%. 

And here is where we find my hoping-to-be-retired sometime client.  Her mother is in her mid-90s, living far away in Florida.  Her mother had saved for retirement but undoubtedly didn’t think that she would live this long.  She choose to drop her long-term care insurance when she felt premiums were getting too high and has since exhausted about one million dollars on her care as Dementia set in.  You have to plan to live!

Adult children, some already retired, are bearing the responsibility for their parents’ care.  I have several clients who are currently in this situation or have been in this situation within the past year or so.  Some are able to work extra years or have the cash flow for the additional financial burden, but not all.  Some have become full-time caregivers for their aging mothers, but they also realize that a time will come when this is not an option.

And this leads us to the hard decision time.  When the older generation runs out of money, what happens next?  Can they take out a reverse mortgage and get the equity out to the house to help cover the costs of care? Potentially, but the reverse mortgage process can be longer than expected, and not everyone has that kind of equity in their home.  If they are lucky, their children can help cover the costs with their savings, but that can potentially sabotage the adult child’s retirement plans at a very late stage in the game.  The hope is that they can keep their mothers out of Medicaid retirement homes where they fear their parents will receive inferior care.  They don’t want to feel as though they have caused their parents' demise earlier than would have happened.

And here’s the kicker – if you were to ask the mothers who are now in their mid-90s what they wanted to see happen with their life savings, they would have told you that they wanted to maintain financial independence from their adult children.  Unfortunately, their mind and bodies are not making this a possibility and it is beyond their control.

The moral of the story is that you have to plan to live.  Do not figure that you will die by the time you hit the actuarial average of age 82 for a man and age 84 for a woman.  Do not plan on being healthy until the day that you die peacefully in your sleep.  Plan for the reality that you may live many years in a less-than-ideal physical or mental state.  Plan to age with the grace that comes from knowing that you are leaving your family in a stress-free state.  You don’t need to plan to leave a big inheritance but do plan to leave a legacy that includes adult children who are successful and comfortable in their own retirements because these same adult children are planning on living themselves.