“When my mom and dad started having health problems about a decade ago, my wife, Maddy, and I said, ‘Do we want to have a discussion about our own long-term care?’” recalls Dr. Ken Dychtwald. “And we both realized we did not want to talk about it, because it is a horrible discussion to have. You know—what happens if you have a stroke, or you can no longer walk?”
Not even experts in the field of aging, like Dychtwald and his wife, Maddy, co-founders of Age Wave, an organization that studies the challenges of aging, want to think about frightening health-related “what-ifs” when it comes to their personal lives.
“My generation—the boomers—prefer to think of ourselves as indestructible,” Dychtwald says. “But, you know what? We said to ourselves, ‘It is not fair to either of us or our kids not to have this discussion.’” So the Dychtwalds did their homework. “We made some important decisions. For one, we decided to buy long-term-care insurance.”
Talking about how you will pay for your future health needs is just one of several critical conversations related to health and wealth that family members should be having. “For many, it is the missing piece of the retirement puzzle,” says Dychtwald.
Yet as important as these conversations are, the vast majority of people are not having them. Seven out of 10 couples age 50 and older have not discussed how much they will need to save for health care in retirement; and only one in five people age 50+ has talked about long-term-care plans with their adult children, according to a 2015 Merrill Lynch study conducted in partnership with Age Wave.
Here are four questions that can help you start having these important family conversations. Sit down with your spouse, your children, your parents and your siblings. Talk about your expectations. Make plans together. Then, should one of you become ill, you can all concentrate on one another instead of worrying about the finances and whether you are doing the right thing for everyone concerned.
1. Where will the money come from?
It is never too early to talk about the potential costs and other consequences of medical care for yourself, your children or your parents. The considerations should include possible outlays for such expenses as home health care or changes to your house to accommodate a disability.
“Once Maddy and I had our talk, we felt better,” Dychtwald says. “We may not be able to wave a magic wand and make ourselves perfectly healthy for the rest of our lives, but at least we know that we are covered should one of these things happen to either of us.”
Though long-term-care insurance was an appropriate choice for the Dychtwalds, it is not right for everyone. There are a number of other financial choices you can consider, from hybrid forms of life insurance and Health Savings Accounts to simply saving and investing more for eventual medical costs.
A logical next step, after you discuss these issues with your family, is to review your choices with a financial advisor to help ensure that your retirement and any legacy you hope to pass on will not be threatened.
2. Will our parents have the care they need as they grow older?
In addition to considering their own future, many people struggle with aging parents’ unwillingness to face their limitations. The best response is to ask specific questions: At what point would it make sense for you to stop driving, or to have a caretaker come in to help with meals?
Michael Liersch, head of Behavioral Finance and Goals-Based Consulting at Merrill Lynch Wealth Management, advises bringing these issues up long before safety concerns arise, and then positioning yourself as your loved ones’ ally.
“Often when you first broach the topic, you will be rebuffed,” says Kate Wilber, professor of gerontology at the University of Southern California Davis School of Gerontology. “That is normal. It does not mean the door is closed. This will likely take more than one conversation.”
3. Who will provide the caregiving, if it is needed?
Taking care of aging parents—or paying for their care—can be a large responsibility, and yet it is a responsibility that often falls unevenly in families.
Liersch recommends that siblings talk first among themselves about how they will share the caregiving role. “You want to be sure that both your parents’ and your own needs are considered,” he says. “Sometimes it makes sense to cobble together a combination of in-home and outside care.” That way, siblings can at least share the costs, if not the hands-on responsibilities.
4. What about end-of-life issues?
Having this conversation can help ensure that a loved one’s (or your own) wishes will be honored. Among the things to consider: Which medical treatments do you want to be used or avoided at the end of your life? Whom do you want to be your health-care proxy if you are unable to communicate your wishes? You can use a health-care power of attorney and a living will to document your choices.
Once you have discussed these tough subjects with your family, it is important to keep talking as years go by and circumstances change. “No one can predict their health future,” Dychtwald says. “But you can put plans in place to help prepare yourself for what might come.”
Having these important conversations is the first step to getting there.
Anita Srivastava is a Wealth Advisor at Merrill Lynch in Glen Rock, NJ. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives
Long-term care insurance coverage contains benefits, exclusions, limitations, eligibility requirements and specific terms and conditions under which the insurance coverage may be continued in force or discontinued. Not all insurance policies and types of coverage may be available in your state.
Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax, accounting or benefits consulting advice. You should consult your legal and/or tax advisors before making any financial decisions.
This material should be regarded as general information on health care considerations and is not intended to provide specific health care advice. If you have questions regarding your particular health care situation, please contact your health care, legal or tax advisor.
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