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Ken Dychtwald

Learning from my mom and dad’s experience.
I grew up in the 1950s and 60s in a close-knit, hard-working family. My parents both worked full-time to pay the bills, send my brother and me to college while saving frugally for their own retirement nest egg. Still very much alive at 86 and 89, my mom and dad live in a retirement community in South Florida. I live 3,000 miles away with my wife and kids in California, while my older brother lives in New Jersey – near where we grew up.

Today, my dad has diabetes and heart disease and has been blind for a decade due to macular degeneration. While still sharp as a tack, and ready for a political argument 24/7, he can’t drive, read or handle many of the normal activities of daily living without a full-time aide. My mom – who remains the “heart” of our family – also requires ongoing assistance. She has COPD – which means she must spend three hours a day on a nebulizer. In the past several years, she has had a heart bypass surgery, a hip replacement and is grappling with memory loss.

Around a decade ago, when it became obvious that living independently in their home was becoming difficult, my brother and I grew concerned because we saw that age and chronic disease were starting to take a deep toll. We knew that Medicare didn’t pay for long term care and Medicaid was for the poor, so our anxiety was high. However, I was very relieved when my dad told me that they were going to activate the benefits of the long term care insurance policies they had bought five years before, to get the extra help they needed so they could continue to live independently.

The good news is they are currently living surprisingly normal lives in their own home, thanks to the services of their care coordinator as well as the terrific aide who comes to their house six days a week, helps manage their household, does the grocery shopping, prepares meals, takes them to their various doctors appointments, cares for them – and generally has allowed them to stay together in their home, just like they always wanted.

If not for their LTC policy, my folks (who have recently celebrated their 67th anniversary!) would most likely be living in some sort of institution – probably a nursing home. And because of their different conditions, they might have been forced into separate facilities. My brother would probably have given up his life in NJ to look after them, and my wife and I would probably be paying for their care which by now would have cost nearly $500,000 – a small fortune.

As a gerontologist, I know that paying out-of-pocket for eldercare can be very costly. The median cost for home care is $42,000/year and a private room in a nursing home costs on average $74,000/year (for information on the cost of care where you live, here’s a helpful resource: www.genworth.com/costofcare). Some people have to sell all their assets to cover the cost of LTC – and many others become impoverished while paying for LTC expenses. I recently read how some social workers are advising elder men and women to divorce their spouse should their partner’s health start to fail. By doing so, they can detach from the financial responsibilities of caring for their loved one – and have Medicaid pick up the tab. This is a shameful state of affairs.

My folks say that they purchased their policies so that they wouldn’t be a burden on us – and while we would do almost anything for them, we are thankful for their proactive decision to purchase their LTC insurance years ago.

The Coming Caregiver Crunch
Over the past century, life expectancy has vaulted from 47 to 77….and it continues to rise. But, the longer you live – the longer you’ll live. So a 65 year old today has an average life expectancy of nearly 85 years! For many, this is a terrific circumstance – more years to learn, work, play and enjoy time with those we love. However, with longer lives, there’s also the increased possibility of health problems along the way. Nearly 70% of all people over 65 will need some long term care in the years ahead. And we’re talking about our parents and soon us!

Today, three quarters of all care is provided informally by loving and supportive family members outside of hospitals, nursing homes and other institutions. This caregiving might involve grocery shopping, house cleaning or helping a loved one who is recuperating from surgery to bathe, dress or visit their doctor. Or, it might even require 24/7 care for a loved one with Alzheimer’s.

But there will soon be a shortage of family caregivers for four reasons:

1. Fewer children to provide care. Today’s elders had around four children per couple, while boomers have had only two.
2. Family members may not live nearby due to increased mobility and relocations.
3. Escalating numbers of singles without a spouse to care for them, due to rising divorce rates and widowhood (women outlive men by more than five years).
4. Highest rates – ever – of both middle-aged men and women working. And so, the adult daughter or son might need (or wish) to work.

Long Term Care is not necessarily a comfortable topic…even for a gerontologist!
So, when my wife Maddy and I stopped to think about it five years ago, we considered what might happen to our lives if sometime down the road we needed extended care. While we realized that there were costs associated with purchasing LTC insurance, the potential financial and emotional costs to ourselves and to our children of not purchasing them were far higher. Although my folks bought their policies in their 70s, we decided to buy ours in our early 50s, when the rates are lower and the likelihood of qualifying is far higher. And, we also took advantage of the special discounts for couples. In addition, because we are small business owners, around ¾ of our premiums turned out to be tax-deducible.

After 35 years on the aging front lines, my personal rationale for why purchasing long term care insurance makes sense:

1. To maintain independence and to avoid burdening your children – financially or emotionally.
2. To assure your ability to get quality care in the setting you choose.
3. To protect your retirement assets and stay in control of your money and your life.
4. To protect your spouse’s lifestyle and financial security, while you’re alive and afterwards.
5. To protect inheritance for your children and grandchildren.

While I don’t think everyone needs LTC insurance, I do believe that everyone should have a plan for how they’re going to be looked after should they needed extended care, and how they’re going to pay for it without burdening their family.

Ken Dychtwald Ph.D..Renowned Psychologist, Gerontologist and Author

When the dust from today’s economic crisis settles, young men and women unfortunately will be even more broke than they were a year ago, while their parents and grandparents – although financially damaged, will nevertheless control an even greater share of the spending power.

Ken Dychtwald, Ph.D. is a psychologist, gerontologist and author of sixteen books on aging, life transitions, and retirement-related issues including Age Wave, The Power Years, and his new book, With Purpose: Going from Success to Significance in Work and Life (with Daniel J. Kadlec, Collins Life; 3/09). The founding CEO of Age Wave, he lives with his wife and children in the San Francisco Bay Area.

Let’s face it. The consumer marketplace has been overwhelmingly youth oriented (even youth obsessed) for decades – but this about to change. Until recently, corporations, marketers, and entrepreneurs paid little attention to 50+ men and women. There was, after all, little to spark their interest in a group whose members tended to be frugal and set in their ways. However, as the hunt for “who has any money to spend” intensifies, marketers are coming to realize that they can no longer afford to ignore mature adults. America’s 50+ men and women currently earn almost $2 trillion in annual income, own more than 70 percent of the financial assets in America, and represent 50 percent of all discretionary spending power. In fact, their per capita discretionary spending is 2.5 times the average of younger households.

A key engine that is driving the growing interest in the maturing marketplace is the aging of the 77 million-strong boomer generation. Because of their huge size, when they reach any stage of life, they create huge opportunities for companies that can meet their needs–whether financial, interpersonal, or even hormonal. For example, boomers didn’t just eat food–they transformed the snack, restaurant, and supermarket industries; they didn’t just wear clothes–they transformed the fashion industry; they didn’t just go to work–they transformed the workplace; they didn’t just go to the doctor–they transformed healthcare; and they won’t just grow old–they will transform aging itself.

The Age Wave is Coming
As the boomers pass through middlescence and on to maturity, five key factors will reshape supply and demand:

1. The boomers are going to live longer than any previous cohort. This generation is coming to grips with the idea that a 90- or 100-year life will become commonplace. And as they search for the “fountain of health,” they will try all sorts of things to stay young longer.

2. They will reinvent themselves again and again. They changed majors in college and haven’t stopped shape-shifting since. Twenty percent have changed religions and 50 percent have changed spouses. They are also far less likely than previous generations to be brand loyal – and far more open to new ideas and products.

3. Their entry into new adult lifestages including empty-nesting, caregiving, grandparenthood, retirement, widowhood, and rehirement–each with its own challenges and opportunities, will give birth to a wide range of products/services.

4. In an attempt to “live within their means” (a new experience for most boomers) while trying to improve the quality of their lives, they’ll undergo a psychological shift from acquiring more material possessions toward a pursuit of enjoyable and satisfying experiences.

5. Maturity is about to get interesting! The boomers will bring a level of adventure, nuttiness, intellectual curiosity, and sexuality to a stage of life that has been relatively bland to date. They are about to change maturity into the 4th of July.

Here are some ideas for tomorrow’s “boom” market:

Body Enhancement
• Nutraceuticals–appetizing drinks, meals, snacks, and supplements engineered with macro- and micronutrients to fight aging and safely promote energy, relaxation, sexuality, mental alertness, endurance, recuperation and other desirable physical and mental states.

• “Cosmeceutical” rejuvenation therapies for men and women made from pharmaceuticals, herbs, botanicals, minerals, and vitamins that will keep the skin and hair youthful longer.

• Anti-aging spas that offer intensive revitalization programs, ranging from toxin purging and metabolic adjustments to muscle toning and brain tune-ups.

• Body fabrication clinics where cloned kidneys, livers, lungs, hearts, skin, blood, and bones can be created and transplanted.

• At-home diagnostics that will screen an individual’s aging-related biomarkers and make daily nutrient, pharmaceutical, and exercise prescriptions. The micro-laboratories could be situated within the bathroom toilet plumbing.

• Nano-implants that will continually monitor vital signs and deliver anti-aging nutrients and hormones on an as-needed basis. These tiny devices could also communicate wirelessly to the family physician in case any troubling symptoms emerge.

Lifestyle Enrichment
• Lifelong learning programs at colleges, universities, churches, and community centers and on cable TV and the Internet that include both vocational retraining for aspiring rehires, as well as just-for-fun instruction on the arts, music, cooking, public speaking, and so on.

• “Retirement Zone” stores that feature products and technologies appealing to older adults with free time, including golf clubs, skis, musical instruments, computers, software, speedboats, and RVs.

• Experience agents–similar to travel agents–who can be commissioned to orchestrate any type of function or experience a client requests, whether it’s a hobby, learning program, psychotherapy, sabbatical, travel adventure, spiritual retreat, introduction to new friends, date, or business partnerships. They could also help retirees find useful and satisfying volunteer involvements and housing options.

• Equity release, reverse mortgages to help older adults who find themselves cash-poor but “brick-rich” draw cash out of their homes to fund long-term care or their grandchild’s college tuition.

• New varieties of retirement housing catering to the needs and fancies of mature boomers: longevity communities for health-minded elders, intergenerational communes, high-tech complexes for “wired” older adults, arts retirement complexes that focus on cultural pursuits, university-based retirement communities for elders who desire lifelong learning, hedonism complexes for elder swingers, and multinational time-shares for those who aren’t interested in settling down in one location.

Age Tech
• Intelligent clothes that sense and adjust temperature and tone in different body zones depending on the condition of the older wearer–particularly useful for people with circulation problems or those seeking to rehabilitate tired muscles.

• Robotic elder-aides who would be programmed to talk, remember appointments, turn off the stove, play bridge, lock the doors or discuss current events. They could even do the laundry or mow the lawn.

• Re-engineered home elements that are ergonomically appropriate for older bodies–door levers instead of doorknobs; easy-open drawers, windows, and cabinets; slip-resistant flooring, stairs, and driveways.

• Smart acoustic systems in telephones, iPods, radios, and TVs that customize signals to accommodate the auditory range of each user’s ears.

Transition Coaching
• Adult and elder-focused psychiatrists and life/death coaches who will help people sort out their inner worlds toward the end of their lives.

• High-tech funeral enterprises that will create Internet-based cemeteries–complete with the deceased’s photos and favorite poems, books, music, and television shows–so that future generations can “visit” the lives of their ancestors.

While no one knows for sure when this recession will lift, we do know that due to increasing longevity and declining fertility, 80% of all the population growth in the U.S. between now and 2040 will be from the over-50 crowd. Boom markets are coming – ready or not!

I’d love to know what you think about new products and services for the coming “age wave.” Your comments are more than welcome!

Ken Dychtwald, Ph.D. is a psychologist, gerontologist and author of sixteen books on aging, life transitions, and retirement-related issues. He is also a world renowned public speaker. To find out how you can bring Dr. Dychtwald to your next event refer to his bio at Speakers.com.