What is healthy aging? As a financial planner, I think a lot of people assume I’m going to go right into the money part of financial planning or the money part of aging; I’m not going to do that. We’re going to touch on some financial things, but I’m also going to include some research that we have seen lately, and I’m sure you’re aware of, that talks a lot about the importance of some other components of healthy aging as we get older.
Healthy aging is about a lot more than just financial. It’s really about the physical and emotional well-being of us. I look back at my grandparents and they didn’t eat well, they never exercised, but they had a really important component that I’m going to talk about in a minute that kept them very healthy. But let’s talk about exercise and nutrition first.
Exercise and Nutrition
We’re so much better educated now than we used to be about the importance of exercise and nutrition, and I think one of the things that’s keeping us alive a lot longer and why our life expectancy is much greater than our parents life expectancy is because we know so much more about nutrition. We know about the foods that are bad for us and the foods that are good for us. If you haven’t studied nutrition, learned a little bit about it, or talked to somebody that knows about nutrition, I would suggest you do that. Not only will it help you from a longevity standpoint, but it’ll help keep you a lot sharper.
We have Silver Sneakers programs at the gym now, why do I know that? Apparently I’m eligible at my age. Most of us have the opportunity to go to a gym and get either a huge discount or have our insurance company completely pay for a gym membership.
I personally use a personal trainer and I work out with a lot of other people that use a personal trainer that are much older than I am. So, exercise and nutrition are huge components for healthy aging and then of course, connection.
Connection is so critical. As a matter of fact, research shows now that this may be more important than nutrition and exercise; it’s having that connection. Loneliness can have a huge negative impact on us as we get older. That’s why many times we have one spouse pass away and the other spouse goes downhill very quickly. That happened with my mom and dad. When my dad passed, it took my mom 15 months before she passed away after that. She went downhill very quickly because of that loneliness, so connection is so important.
That’s why we see community organizations and community centers. We see seniors going on trips with other people in their age group, whether it’s to the casino or on a vacation. We see people taking cruises and a lot of involvement in synagogues, churches, and communities that are outwardly focused and are serving other people.
Some of the research shows that this connection for healthy aging might even be more important than nutrition or exercise, although we don’t want to minimize some of those things. One thing I would suggest before we get into the financial part is signing up for the Mayo Clinic newsletter. The Mayo Clinic is up in Minnesota and has various other resources you can use. Wendy and I get their newsletter every month and it has all kinds of tips on healthy aging, Alzheimer’s, cognitive decline, and things like that.
Financial Healthy Aging
We’ve talked about some of the other things that go into healthy aging, but obviously our finances must be part of this. It’s so important to have a financial plan early in your aging process. I think in your late 50s and 60s, you ought to have a financial plan because as you get older, decisions become more overwhelming. If you’re not on track and you get into your 70s and you start getting financial advice, you may have somebody tell you, “Hey, you’re not on track. You need to make changes.” Many times, those changes are very overwhelming at that age and if one spouse passes, a surviving spouse will just leave everything the way it is.
We have a lot of engineers for clients; very smart, really on top of their finances. We make financial plans for them that are rather detailed because they like that as you can imagine. One of the things that we hear all the time is, “I want to make sure you’re here to take care of my spouse if I pass first, because my spouse is not going to be able to make the type of decisions that I make,” so it’s important these financial plans get put in place early.
Make that plan, if you do have a spouse or partner, that will take care of them because many times, that spouse outlives the other just like my mom did. She wasn’t used to making those big financial decisions and the danger is that they’ll just leave everything the way it is, and they might be setting themselves up for some real problems when it comes to their finances.
Let’s talk about some of the things we need to consider when we talk about our finances in the context of healthy aging. We should set aside some money for medical expenses. There are statistics out there that say somewhere between $250,000 and $300,000 will be spent by the average couple throughout their years past age 65 to passing away on different medical expenses. Even if you have medical insurance, it might be deductibles, it might be going to see experts in certain fields that your insurance company won’t pay for, and so on. So, we’ve got to set aside some money for medical expenses.
How about setting aside money for activities? Activities might be going on travel trips, going to Europe, going somewhere with a group, maybe going on a cruise. Some people love cruises, some people hate cruises, but things like that where you’re around a lot of other people that may be your peers. So, maybe you want to set aside money in your budget, or even a reserve fund that you can spend down. I would encourage you to do those things earlier, right when you retire, because when you get into your 70s and early 80s, you might not be able to do all that traveling. You might begin having some issues with walking or moving around a lot, or just traveling on an airplane.
My parents started to travel right away when my father retired and did a lot of traveling the first seven or eight years, and then my mother became unable to travel as much as they wanted to. Spend that money early on activities. One of the things we must do in our financial planning business, when clients come in and they transfer into retirement and they’ve been in that mode of saving money for so long, we have to get them to spend money. Sometimes those good habits while we’re working on saving money translate into not spending any money on yourselves when you get into retirement.
So, we tell folks you can afford to have somebody come over and do your lawn, do your bushes and landscaping. You can afford to maybe have a cleaning person come into your house for housekeeping or to clean out the attic. You can pay somebody else to do those things. Don’t be afraid to spend your money in retirement; that’s what you’ve been saving for.
Take a look at that and listen to a financial advisor because, again, sometimes it’s hard to make the transition to having a better lifestyle. Because we’ve been so used to saving money and being frugal, or responsible, I’ll let you decide on what word there, for so long that it’s hard to transition into spending money on ourselves.
It’s so important that we have a financial plan that covers a retirement income plan or a projection, will you run out of money before you pass away, what rate of return do you need on your investments before you pass away, what are your sources of guaranteed income, do you have inflation protection, all that needs to be part of a good financial plan. You’ll also need to prepare for unexpected issues that might come up. They will come up. If you’ve gone through life at all and if you’re watching this in your 50s and 60s, you know that unexpected things come up and sometimes, can be categorized as a crisis.
It might be the loss of a loved one, maybe one of your kids passes away, it might mean a divorce where you have to step in financially. There needs to be some flexibility in your plan to go ahead and meet those changes.
It’s critical to make sure you’re taken care of financially first before you help somebody else out. I know that sounds selfish, but we have seen a lot of clients go overboard helping kids or grandkids and then they end up impoverishing themselves in retirement. You don’t want to live with your kids, believe me, you don’t want to live with your kids. I won’t make a comment about if they want you to live with them, but you probably don’t want to live with your kids. If you do, it needs to be a special arrangement.
Many times, people have to end up living with their kids or relying on the kids because they gave too much money away, so be careful of that, but be ready for crisis to come in your family and that might mean children, grandchildren, or somebody needs a helping hand.
Also, expect unexpected things, like the death of your spouse. Unfortunately, somebody’s going to outlive the other person. If you have a spouse or a partner, you’ve got a plan for that; any kind of disabilities, any kind of inability to travel, maybe you need to put a ramp on your home so that a wheelchair can get up that ramp or because you can no longer use stairs. Unfortunately, these things will happen, and finances and proper financial planning will not necessarily take away the problem, but they will make the problem easier to deal with.
Healthy Aging in Retirement
Healthy aging consists of nutrition, exercise, and connection. One of the most important things we have is connections with other people. That’s why people want to be near their families or friends. Wendy and I have talked a few times about moving just 30 miles down the road to a place that might be more desirable for us to live during our retirement years, but the thing keeping us in our neighborhood is our friends. All our friends are there and we don’t want to be that far away from them.
So, that connection, as you can see, is really important. The financial things to address in healthy aging have to tie together; Finance and other lifestyle choices have to fit together.