Between the shaky economy of recent years and the ever-increasing cost of long-term care and prescription medicine, managing money and planning for the future is no simple matter for seniors today.
But financial planners and elder-care attorneys say a little bit of foresight and planning can go a long way toward ensuring that seniors' final years are spent enjoying life rather than dwelling on financial stress.
"A lot of times we find that some people are reluctant to do this sort of planning and they put it off," says Barry Meyers, an elder-care attorney in Bellingham. "When people wait until the last minute - when they might not be mentally capable - that's not the best time to be making these kinds of decisions."
Everson resident Jacque Reed, 75, realized that she needed a bit of help when balancing her checkbook and keeping track of her bills became more difficult about a year ago. Her son Alex Reed, overwhelmed with the health care needs of other ailing family members, turned to Bellingham-based Senior Support Services for help.
The business often acts as a court-appointed guardian for incapacitated seniors without family in the area, but also supports seniors who are otherwise independent but simply need a little help managing their finances.
Jacque Reed, who lives with her husband, who has Alzheimer's disease, says Senior Support Services has been a blessing. All of her bills now go to the business, which, for a small fee, makes sure everything is paid on time.
"I was not to where I trusted myself doing it," Reed says. "I would have been bouncing so many checks if I tried to do it myself. ... So much of my stress is gone knowing that all the bills are going to be paid, and paid on time."
Carolyn Lenington, who founded Senior Support Services in 1992, says her company's help is often something as seemingly insignificant as one visit a month from an assistant who pays bills and monitors a senior's bank account. A little bookkeeping help is all some seniors need to stay in their homes instead of going to a long-term care facility, Lenington says.
"Just because they are failing in one department doesn't necessarily mean they can't care for themselves in other ways," she says.
Lenington says it's important for adult children to make sure their elderly parents are keeping up with their bills, but she advises them to tread lightly, because financial independence is important to most seniors.
"Wanting to jump in and take over a parent's bank account right away, that's not appropriate," she says. "You're taking dignity away from that individual. ... Gently, and slowly, start getting involved."
DON'T WAIT FOR PROBLEMS
Experts say it's important not to wait until a senior runs into financial trouble - such as bouncing checks, running out of money or having bills sent to collection agencies - before addressing financial management. Though ceding control of money to an adult child or a loved one can be difficult, it's something that's best addressed earlier rather than later.
Meyers, who specializes in senior law, says anyone in their 60s or 70s should have a will that dictates which family member or friend should have possession of specific financial assets. Equally important is the issue of power of attorney - who should be in charge of managing money or making medical decisions should a senior become unable to do that themselves.
Meyers says handling those sorts of matters can get messy and expensive when seniors lose their mental capacities before handing off power to someone else. It's not uncommon for family members to quarrel over who gains possession of family heirlooms or money. And obtaining the authority to act on behalf of an incapacitated parent often involves going through a lengthy court process.
Meyers says there is no one-size-fits-all approach when it comes to wills and power-of-attorney issues. Some people prefer to will their money to charities. Some prefer to hand over everything to one child to avoid disagreements, while others dole out responsibilities to different family members.
"Maybe you've got one child that is good with financial stuff and you think they should handle the finances, and maybe another child is a nurse and you think she or he would be best to have health care power of attorney and make health care decisions," Meyers says.
What's most important, he says, is communicating with family members and hammering out the details while the senior is still able to do so, rather than waiting for an injury or illness to force the issue.
"These people are really key folks," Meyers says. "They are in a position of responsibility and we want them to act in our best interest. If we pick someone, they may be stepping into our shoes at some point."
TO INSURE OR NOT TO INSURE
With the cost of long-term care on the rise, and with most seniors not wanting to leave their families responsible for their care in old age, long-term care insurance has become increasingly popular in recent years.
But experts say a variety of factors affect whether an insurance plan is a worthwhile investment.
Andy Landis, a Seattle-area writer who leads workshops on Social Security and retirement living, says an insurance plan does not make sense for everyone. Most wealthy seniors are going to have enough in the bank to pay their bills should they need long-term care in an assisted living facility or nursing home, while poorer folks are not going to be able to afford the monthly premiums for an insurance policy. Premiums for a typical policy range from $2,000 to $4,000 a year, according to the American Association of Retired Persons.
But Landis says seniors in the middle of the income spectrum might consider investing in a policy, particularly if they are concerned about unforeseen medical issues wiping out savings that they hope to pass on to others after they die.
"If you're insuring some of that risk away, you're protecting those assets for your heirs, family or charities," Landis says.
As with all major purchases, it's buyer beware. Landis says it's important to go over any long-term care insurance plan with a financial planner or lawyer, to ensure there are proper safeguards against suddenly rising premiums, or a lack of payout once the policy is actually needed.
Americans 50 and older spend less once they retire, and home-related expenses remain their biggest outlay, according to a Feburary 2012 report by the Employee Benefit Research Institute, in Washington, D.C. The report is based on surveys conducted by the Institute for Social Research at the University of Michigan.
Other key findings:
Spending on health care was the only component that steadily increased with age, accounting for about 10 percent of the budget for people 50 to 64, but about 20 percent for those 85 and older.
On average, retired households spend about 80 percent of what working households spend, while their earnings are about 57 percent of that of working households.
Certain groups of older Americans, notably single people, blacks and high school dropouts outspend their resources during retirement.
Caleb Heeringa is a Seattle freelancer writer.