J. K. Lasser Pro Advising Mature Clients: The New Science of Wealth Span Planning

257 Pages·2002·0.8 MB·English

by  Neal E. Cutler

J.K. LASSER PRO TM
ADVISING MATURE
CLIENTS
The New Science of Wealth Span Planning
Neal E. Cutler, PhD
John Wiley & Sons, Inc.
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J.K. LASSER PRO TM
ADVISING MATURE
CLIENTS
The New Science of Wealth Span Planning
Neal E. Cutler, PhD
John Wiley & Sons, Inc.
To my mother,
Mary B. Smiley,
–– with respect and love
Copyright ©2002 by Neal E. Cutler. All rights reserved.
Published by John Wiley & Sons,Inc.,New York.
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Contents
Internet Resources vi
Acknowledgments vii
Chapter 1 Advising the Mature Client: From Health Span to Wealth Span 1
Successful Aging 1
The Perspective of Financial Gerontology 5
Four Principles of Financial Gerontology 5
Aging Viewed Through “Three Lenses” 8
Health and the Wealth Span 10
The Wealth Span Professional as Trusted Family Advisor 12
The Search for Better Information 15
Chapter 2 Individual Aging: Democracy and Longevity 17
Individual Aging Across History 18
Longevity and Health 24
Chapter 3 Population Aging 35
Birth Rates and Population Aging 35
An Alternative Kind of Population Aging 36
Population Younging 38
Individual Aging Versus Population Aging? 39
The Context of the Modern Wealth Span:
Old Aging and Middle Aging in the United States 40
Relationships Among Age Groups 49
Chapter 4 Family Aging 55
The Dual Meaning of Middle in Middle Age 58
Family Aging and the Sandwich Generation 61
The One-Generation Caregiver Sandwich 62
A Poetic Conclusion 64
iii
iv Contents
Chapter 5 Wealth Span Changes I: The Changing Balance of the Wealth Span 65
The Unrealistic and the Realistic Nature of the Wealth Span
Model 67
The Wealth Span Model as an Advisory Tool 68
Historical Change in Balance 69
Chapter 6 Wealth Span Changes II: The Increased Complexity
of the Accumulation Stage 77
Complexity 1: The Trend Toward Multiple Sources
of Income 78
Complexity 2: From Defined Benefit to Defined
Contribution Pensions 82
Complexity 3: Increasing Family-Connected Complexity 86
Chapter 7 The Financial Psychology of Middle Age––
The Multiple Meanings of Middle 91
When Does Middle Age Start? 92
Middle Age as a Modern Invention 95
Financial Psychology and Midlife Crisis 99
Are You Middle-Aged? 101
Chapter 8 Health and the Wealth Span 105
Good Health and Longevity 105
Successful Aging Replaces Normal and Usual Aging 107
Squaring the Curve 111
Security, Health, and the Five Legs
of the Three-Legged Stool 114
Chapter 9 Health Insurance: Medicare and Medigap 117
Retirement, Aging, and Getting Health Insurance 117
Employment, Financial Literacy, and Health Insurance 119
Medicare 124
Medicare Part A—Hospital Insurance 125
Medicare Part B—Medical Insurance 129
Medigap Insurance 133
Basic Medicare Information Resources 139
Contents v
Chapter 10 Long-Term Care Services: Nursing Homes, Home Care,
and Assisted Living 141
Worries and Concerns: The Financial Psychology
of Long-Term Care 142
Consumer Preferences and the Continuum
of Long-Term Care 145
Nursing Homes 146
Home Care 154
Advising Clients About Home Care Choices 157
Assisted Living 158
Advising Clients About Assisted Living Choices 166
Chapter 11 Long-Term Care Finance: Medicaid, Long-Term Care Insurance,
and Reverse Mortgages 171
Public Worry and Misunderstanding
About Long-Term Care Finance 172
Medicaid 173
Long-Term Care Insurance 180
Reverse Mortgages: When Your Client Is
“Cash-Poor but Equity-Rich” 192
Chapter 12 The Wealth Span Advisor as a Gerontology Team Member 201
The Resources of the Older Americans Act’s National
Aging Network 202
Strategic Neighborhood Alliances: The ELF Model 208
The Wealth Span Advisor as Medical Consultant 215
How to Find a Geriatrician 219
Chapter 13 A Wealth Span Resource Guide 221
This Book Has No Appendices 221
Printed Materials 222
Internet Megasites in Aging and Finance 234
Index 239
Internet Resources
www.med.harvard.edu/programs/necs 33
www.livingto100.com 34
www.ssa.gov 121, 237
www.medicare.gov 174, 237
www.N4A.org 149, 207
www.nasua.org 150, 206
www.aoa.gov [megasite] 150, 207, 234
www.ahca.org 150
www.aahsa.org 150, 169
www.nursinghomeaction.org 150
www.medicare.gov/NHCompare 151
www.nahc.org/Consumer 157
www.alfa.org 168
www.ncal.org 168
www.ccal.org 168
www.aarp.org 168, 198, 236
www.kff.org 180
www.hcfa.gov/Medicaid/ltchomep.htm 180
www.elderweb.com [megasite] 180, 192, 236
www.unitedseniorshealth.org 191
www.hiaa.org 192
www.reverse.org 199, 232
www.hud.gov 199
www.fanniemae.org 199
www.reversemortgage.com 199
www.caremanager.org 210
www.abanet.org/elderly 212
www.nsclc.org 213
www.naela.org 213
www.benefitscheckup.org 213
www.ama-assn.org 219
www.americangeriatrics.org 219
www.healthfinder.gov [megasite] 220
www.nih.gov/health [megasite] 220
www.nlm.nih.gov/medlineplus [megasite] 220
www.aagpgpa.org 220
www.alz.org 220, 226
www.alzheimers.org/ADEAR 220, 227
www.usc.edu/dept/gero/research/4gen 223
www.ebri.org 223
www.cds.duke.edu 227
www.hrmoody.com 228
www.ncoa.org 213, 229
midmac.med.harvard.edu [no www] 231
geron.psu.edu [no www] 231
www.census.gov [megasite] 233
www.isfs.org 233
www.FAAR.org [megasite] 238
Acknowledgments
y work in financial gerontology reflects three decades of academic and
M
practitioner relationships in the social sciences, in gerontology, and in fi-
nancial services.
From my colleagues and students in political science and gerontology at the
University of Southern California I developed a critical appreciation for multi-
disciplinary teaching and research. Of special value is the unique influence of
Dr. James E. Birren, founding director of the Andrus Gerontology Center and
my mentor and friend during the turbulent early years of financial gerontol-
ogy.
My personal and intellectual debt to Dr. Davis W. Gregg and Joseph E.
Boettner is substantial. Dave’s ideas about the Wealth Span and Joe’s enthu-
siastic support were the seedlings from which this book has grown. I hope it
effectively communicates my affection and my respect for these two gentle-
men.
Joe wanted his long-planned chair at Widener University to serve as a me-
morial to Dave Gregg and to their joint vision of an academic bridge between
the worlds of financial services and gerontology. I acknowledge my deep grat-
itude to Dr. Robert J. Bruce, now president-emeritus of Widener, and to Dr.
Stephen C. Wilhite, dean of the School of Human Service Professions, for
their continuing support of this innovative enterprise.
Throughout the book are “data bits” from American Perceptions of Aging in
the 21st Century, a giant-sized public attitude survey conducted by The Na-
tional Council on the Aging. My thanks to Dr. James P. Firman, NCOA presi-
dent and CEO, Dr. Nancy A. Whitelaw, vice president for research and
demonstration, and Lynn Beattie, deputy director for R&D, for the opportu-
nity to direct this important piece of financial and social research.
Because “financial gerontology” is not yet a household phrase, special
thanks are due to my editors at John Wiley for encouraging this project: to
vii
viii Acknowledgments
Debra Englander, whose enthusiasm nurtured its conceptualization and devel-
opment, and to David Pugh, whose insights and patience brought it to comple-
tion.
Necessary and Sufficient Conditions. Contributions from colleagues are critical
contributions––they are necessary but they’re not sufficient. And so I turn to
family. To my boys, Kari and Jori, now adults, and to Elizabeth, moving there
all too rapidly––thanks for giving me so many reasons to see the value of
good works and investment in the future.
Donna Crane, my wife, provides unending intellectual encouragement. Our
enduring and endearing etymological debates, always accompanied by friend-
ship and love, made this project doable and completable.
This book is dedicated to my mother, Mary Smiley. Her direct and indirect
influences on the content and quality of this work are throughout. Due to the
Depression she became a skillful professional secretary rather than a college
student, and so not only did I learn to type fast almost before I could write, but
she instilled in me a love for words, spelling, grammar, and nuance. Watching
her cope as a young widow taught me about individual financial survival. She
is a success story of financial literacy, will, and take-charge financial planning.
My research grew from our debates about her retirement, and later bene-
fited from our discussions of health and long-term care. She typed my under-
graduate political science thesis (on purple ditto masters!) and last month
proofread some of these chapters (and found errors that MS-Word didn’t).
And so it is with respect and much love that I dedicate this book to her.
Neal Evan Cutler
Davis W. Gregg/Joseph E. Boettner Chair
in Financial Gerontology
Widener University
January 2002