section 1 - The American College Online Learning Center

a. Example: Because of physical and mental infirmities, Caryl may need help withbasic activities such as dressing, taking a shower, or even eating. To get help,she may need to move to assisted living, a nursing home, or go to adult day care.Even if the family can provide care, it might be a significant financial burden forthem, especially if they have to cut back on work.b. A widow or widower who endures a long-term care event for his or her deceasedspouse may have the assets on which they need to live after the spouse diesdepleted by the long-term care event.c. In a recent year, the average cost of care in a nursing home totaled $80,300. Theperiod of time spent in a nursing home varies by age and gender. About 30 percentof people who spend time in a nursing home spend between 1 and 3 years there.d. The cost of care for an assisted living facility ranges from a low average rate of$2,050 a month to a high average rate of $4,890 a month.e. The cost of home care varies by the provider. Typically, there are three levels ofproviders: home health aides, homemaker/companions, and adult day servicesproviders. The average cost for each of these levels of care in a recent year was$21.00/hour, $19.00/hour, and $66/day, respectively.f. Planning Point: Long-term care risk is compounded by a client’s longevity.g. Planning Point: Statistically speaking, women are more likely than men to needlong-term care.3. Frailty risk is the risk that as a result of deteriorating mental or physical health, a retireemay not be able to execute sound judgment in managing his/her financial affairs and/ormay become unable to conduct home maintenance. Frailty risk could be mental, physical,or both. Mental frailty risk may occur whether or not the client is legally determined tobe incapacitated (legally unable to manage their own affairs because they lack mentalcompetency). Your clients should be concerned about losing the ability to managefinancial affairs or to maintain their home for a variety of reasons:a. Example: Dennis finds himself getting confused when it comes to making financialdecisions and it becomes obvious that assistance is needed with these functions.Extra care is needed so bills do not go unpaid and proper oversight of investmentswill continue.b. Example: Rick has lost his driver’s license and with it the ability to run errandswithout help. His inability to drive may interfere with his ability to live independently.c. Example: Over the course of time, Jessica and Myron find it hard to maintain theirhome and must now pay for expenses that they used to perform themselves suchas painting, lawn care, snow removal, and some cleaning projects requiring heavyphysical labor. Home maintenance risk is exacerbated by the aging process.d. The majority of retirees seek to age in place.e. Planning Point: The home that is suitable for raising a family may be unsuitablefor retirement living. For example, high school taxes, staircases, and extra roomsto heat, cool, and maintain may be undesirable in retirement.f. The home may become unsuitable for the client and staying could risk the client’spersonal safety. Circumstances might necessitate relocating and consequentlyincurring additional expenses.g. Clients can lose the capacity to manage financial affairs, live independently, ormanage home maintenance slowly over time or all at once, unexpectedly.h. Planning Point: Daily money management is sometimes available through socialservice providers. For a modest hourly fee, they will pay your client’s bills,make bank deposits, balance your client’s checkbook, organize your client’stax information, and even negotiate with your client’s creditors. A daily money5.14