Will your retirement plan stand up to long-term care needs?

Do you have an estate plan in place?

These are topics that few of us want to discuss. However, they are extremely important to your family’s long-term stability. Today, we’ll discuss some important considerations for your long-term financial stability— and how you can take action today to start planning for those needs.

[Disclosure: This article is a very personal post, and it’s also part of the Life Uninterrupted campaign sponsored by USAA. The #LifeUninterrupted campaign can help future retirees learn how to transition into retirement without worrying about financial interruptions. You can receive a free, no-obligation retirement review today by calling USAA.]

[Nords note: the site owner receives a fee for posting; however, the opinions expressed in this post are my own. I do not earn a fee, a commission, or a percentage of sales.  As usual, all of my writing revenue is donated to military-friendly charities.]

Welcome to another episode in a series of posts about how the Nords family’s financial independence life is changing after more than 17 years. It’s all good.

Over the years I’ve felt frustrated about personal-finance bloggers (you know who you are) who don’t write (or podcast or YouTube) about the tough situations affecting their personal lives and their financial credibility.

Some of us write about our impacts from disease, disability, divorce, and death, but too many are tempted to omit the difficult discussions. Maybe those public figures feel that a few topics are… personal… and perhaps private.

Unfortunately, our (understandable) writer reticence also impacts our financial credibility. If we don’t address the questions then the skeptics will make up their own answers:

• “I can’t count on reaching FI by inheriting money.”
• “If they can’t explain their math, then how do they know they’re FI?”
• “You can’t get health insurance for that.”
• “Divorce is expensive. They’ll have to go back to work.”
• “I’d be FI too, if I could just buy cheap long-term care insurance.”

… and my personal favorite:
“Of course they’re FI! As long as their lifestyle convinces us to buy enough stuff from their website.”

More of us public figures could be more… public… with these personal issues. As painful as these life problems may be, they also offer a rare opportunity. Sharing the news about our experiences can help people who are also struggling with (and Googling about) similar issues.

Discussing it can be good keyboard therapy.

We could disarm the FI skeptics.

I’m finally able to share a very personal story after years of silence. It demonstrates why quality of life (and the choices offered by financial independence) should be so important to everyone.

I’ve hidden this information for over five years while I was a conservator under the benevolent scrutiny of the Denver probate court. I’ve beta-tested this revelation with family and close friends, along with a small forum of others who have the same situation.

This post will render me partially uninsurable, but I can afford it. The discussion needs to be public, and it’s worth the cost.

A Family History of Disability

2002: Dad & me, after Grandpa’s funeral.

We’re all familiar with the “failure probability” of the 4% Safe Withdrawal Rate, yet my genome might turn out to be a much bigger failure probability in my lifestyle.

Most of you know that my father died of Alzheimer’s Disease in late 2017. As Dad’s conservator, I’ve written extensively about the financial aspects of dementia and care facilities. I had to apply for that conservator’s appointment from the Denver probate court in early 2011, and I could have been fired dismissed at any time during the six years that I handled Dad’s finances.

Three 23andMe kits for our Ohana Nords.

In 2013, as Dad was approaching mid-stage Alzheimer’s, our family mapped our genomes with 23andMe. When the results posted on my 23andMe account, I had to click through about three different warnings. To my surprise, I learned that I was a carrier for cystic fibrosis.

In addition to my parents’ bullets in my genetic revolver, my paternal grandfather also lived with dementia until age 97. (We’re not sure it was Alzheimer’s, and he died of influenza.) My mother and her parents didn’t live long enough to show symptoms of the disease.

I’m still here. Keep reading. You want to know how to handle this.

I’m still unlikely to develop any sort of dementia. Not for another 15-30 years, anyway. (Tick. Tock. Tick. Tock.) As you might imagine, I’ve obsessed read a lot about this.

Remember that people still develop Alzheimer’s even without a clear genetic vulnerability or family history, and it’s just one of several different types of dementia. A few dementia symptoms respond to treatment, especially if the cause is related to blood pressure or medication side effects.

23andMe describes the situation in a number of different ways.

• A third of Americans over the age of 85 have dementia regardless of their genome.
• A family history means I’m roughly 30% more likely to develop Alzheimer’s during my life.
• 28% of people with a genetic APOE4 vulnerability develop Alzheimer’s by age 75.
• 51% of APOE4s show symptoms by age 85.

Of course, these are the people left after the “survivor bias” of heart attacks and cancer. Even elders whose brains show tangles and plaques (during an autopsy) have remained symptom-free while alive. It’s a testament to the brain’s neuroplastic ability to route around damage.

In general, people are fine until age 65. (Seven more years for me!) After that, the odds rise unpredictably.

Human cognitive skills reach their peak before our 70s. Dementia symptoms typically appear in the mid-70s, just like my Dad (age 74). After that, the Alzheimer’s bell curve is about 20 years wide. My grandmother covered Grandpa’s dementia symptoms for several years before her death, and then he spent over 14 years in a care facility.

People who are highly educated or skilled have a measure of cognitive reserve which can hide dementia symptoms for many years. My grandfather, an electrical tech and side-hustle farmer, coped with dementia for at least four years before he finally had to enter a care facility. (He left a trail of financial wreckage that took another five years to repair.) My father, an electrical engineer, did the same for three years until his cognitive neglect almost killed him.

For purposes of this post, let’s consider me highly educated. You can form your own opinion about my cognitive reserve. (My self-assessment may be biased– or oblivious.) Read the related posts below and feel free to contact me with questions. If we’re at a meetup, I’m happy to chat. We need to start the conversations.

Last month I went to yet another memorial service, and I’ve already lost too many family, shipmates, and friends. Of the “big three” causes of elder death, I’m convinced that I prefer dementia over cancer or cardiac arrest. Ironically, dementia can eventually set you free from worry and self-criticism. As I watched my grandfather deal with dementia, I heard Dad’s epic stories of fixing what Grandpa had neglected. Those years were some of Grandpa’s happiest times, although Dad’s caregiver stress was sky-high. Then I watched Alzheimer’s chew on my father’s cognition for over nine years. Once again those were some of the happiest years of his life.

Our caregiver stress with Dad was also sky-high. I’m not passing that on to the next generation.

Do You Really Want to Know?

Yes, knowledge is powerful, and it can help you plan for your future. 23andMe offers an FDA-approved “health predisposition report” for Alzheimer’s.

That knowledge is one of the most controversial aspects of genetics. Current testing for late-onset Alzheimer’s can only show a risk factor without a definite “Yes” or “No”. Some medical scans can show plaques and tangles in the brain, but they don’t always lead to Alzheimer’s.

Your genome loads the gun for your life of Russian roulette. (Hopefully, that gun is a revolver, not a semi-automatic.) Lifestyle pulls the trigger.

You want to keep your fingers outside of the trigger guard.

What’s in your genetic revolver?

The want-to-know question never even occurred to me until I started clicking through the 23andMe disclosures. I’m a nuclear engineer: of course, I want to know my mortality risk factors so that I can mitigate them. As some motivational bloggers say, I want to “Take massive action” and “Crush it!”

Like the criminal told the police officer “Dirty Harry” Callahan: “I gots to know.”

I want to live my best life while I’m still self-aware.

You statisticians may have noticed that homozygous APOE4 people still have a meaningful probability of skipping Alzheimer’s. Ironically there’s at least one anti-Alzheimer’s gene which shuts down the Alzheimer’s genes. Genealogists know it exists, but geneticists haven’t located it yet.

Although people claim that they want to know, they misinterpret the results. Regardless of your APOE4 genes, something else on your genome could kill you first. While you may think your cognition is “safe”, you can still develop dementia without the APOE4 gene. This confusion is so widespread that even the Alzheimer’s Organization discourages genetic testing for Alzheimer’s.

What if “lifestyle” is simply where you were raised? About 4% of humans have Alzheimer’s disease at age 65, and the numbers grow rapidly after that age. First-degree relatives of a person with Alzheimer’s disease have a higher chance of developing Alzheimer’s. Yet 23andMe notes that this may be simply related to family members sharing a similar lifestyle and environment.

23andMe lists other factors correlated (positively or negatively) to Alzheimer’s:

• More women than men develop Alzheimer’s.
• African-Americans and Hispanics develop Alzheimer’s at higher rates than Europeans and Asians.
• Obesity, high cholesterol, and high blood pressure raise the risk of Alzheimer’s.
• Type 2 diabetes raises the risk of developing Alzheimer’s.
• Green leafy vegetables, fruits, whole grains, and healthy fats lower the risk.
• Fewer years of education correlates with a higher risk of developing Alzheimer’s.
• Exercise benefits the brain and lowers the risk of developing Alzheimer’s.

Lifestyle Motivation

“When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.”

— Samuel Johnson

“There is nothing better than getting shot at and missed. It’s really great.”

— James N. Mattis

We all know we’re supposed to eat more fiber and leafy-green vegetables. More healthy fats. Avoid refined carbohydrates.

We all know we’re supposed to get off the keyboard couch. Exercise. Lift weights. Get more sleep. Meditate. Journal your goals.

Click the image for more info.

Is this knowledge really enough to persuade us to live our best lives?

As the TV psychologist says, “How’s that workin’ for ya?”

It’s the ultimate cognitive dissonance. We all know what we’re supposed to do, and we all judge others for not doing it… while we’re not doing it either.

That’s how I lived until I clicked on my 23andMe APOE results. Unlike my first 53 years of my life, I suddenly had a very specific reason to change my behavior.

I didn’t stop the riskier behaviors because they might be bad for me. (If that logic worked, I would’ve stopped decades ago.) Instead, I changed my behavior (one habit at a time) because I now have a very clear picture of the person I want to be. I’m not rigid and perfectionist, and I still eat a cookie once in a while… as long as it’s not a habit. I know that my good habits keep me on track the other 99% of the time.

Good lifestyle habits help mitigate risk factors. Good habits also help keep you on track when you’re losing your cognition.

Good habits do not come from good intentions– they come from the hard work of daily small behavior changes.  This applies to financial independence as well as your health.

Here’s another example of my lifestyle motivation.

My parents were social drinkers. Before Dad developed Alzheimer’s, he’d have a drink before dinner… and top it up with dinner… and maybe top it up after dinner. He had it under control.

I (secretly) joined that drinking club at age 13. I majored in it at college and during active duty. (You’ve heard the term “drinks like a sailor”? ) I eventually got it under control. By age 35 40 45 I’d drunk more than my lifetime quota of alcohol– and most of your lifetime quota too.

When Dad developed Alzheimer’s, his drinking habit was already firmly established. He just couldn’t remember how to stop.

He’d have a drink before dinner… and a drink before dinner… and a drink before dinner… and a drink before dinner. He’d pass out after a pint of bourbon and dinner never happened. The next day maybe he’d eventually eat lunch (once his stomach settled down). Maybe he’d do chores or hike his favorite national park. (Or maybe not.) Later on, he’d have a drink before dinner…

The alcohol eventually burned an ulcer through his duodenum. When a neighbor drove Dad to the emergency room at midnight, he was inebriated and incoherent and suffering incredible pain. When Dad lost consciousness and the CAT scan finally saw the problem, there was no dinner in Dad’s stomach… but his peritoneal cavity was flooded with Wild Turkey.

Dad was, to put it politely, a malnourished bag of bones suffering from withdrawal. He went from the ICU to the care facility and he never had the chance to drink alcohol again.

I’d known for decades that I should probably drink less, and by my late 40s, a couple of beers had adverse effects on my reflexes and my sleep. Still (for whatever reasons) I never quite got around to changing my behavior. My habits were firmly established.

Eh, coffee for me please.

Yet when I got “the call” from Dad’s hospital (at 3 AM), I knew I was finally done with alcohol. My good intentions gained a much stronger motivation to build my new sobriety habit. It took a few years to stop being triggered by beer commercials or the smell of spicy food, and now I have better associations.

I’ve become someone who doesn’t want to pay any potential price for drinking alcohol, especially if it becomes a habit.

Police officers at sobriety checkpoints love hearing that my last drink was 27 February 2011.

As one APOE4 person says:

“My quality of life has improved and money has become less important to me. I am actually glad to discover that I have the APOE4 gene because I avoided becoming complacent in my retirement.”

Caregiver Motivation

I thought I understood ”caregiver stress.”  I had no idea.

I served for 20 years in U.S. Navy submarines. I thought I knew stress, but with Dad, we leveled up for over six years of chronic (and acute) caregiver stress.

It started with finding a care facility in the 96 hours before he was discharged from the ICU. (I lived in the hospital for three days, napping in the “visitor” lounge.) It continued when the long-term care insurer denied the claim. (We appealed and won.) It elevated many times during the next nine months of legal petitions to be appointed his conservator. Our caregiver years were relatively trouble-free (compared to most families) yet the stress never went away.

In early 2019, 16 months after Dad’s death, I still felt flashback echoes of that caregiver stress. It was the first time since 2011 that I didn’t have to prepare his income-tax returns or submit a conservator’s report to the probate court.

When you have Alzheimer’s, you can still feel physical and emotional pain. You just can’t remember it, and that’s why my father and grandfather were so happy in their dementia.

But caregivers can’t avoid the constant physical and emotional pain. Caregiving for a loved one with dementia is brutal. Dad had an old will and an old medical directive and ample assets, but even with those resources, our care was still an ultramarathon of stress and emotional pain. If an elder has no assets or will or medical directive or estate plan or powers of attorney, then it’s almost impossible to be their caregiver.

The Nordman caregiver stress stops with me. I’m not dumping this on another generation.

Insurance?!?

Welp, this post renders me ineligible for some types of insurance.

No worries: I either don’t need the coverage or we’ve self-insured for it. Bookmark this post, because someday you might want to review these tips too.

Technically, the Genetic Information Nondiscrimination Act protects American citizens. Health insurers are not allowed to use genetic information to decide about our eligibility or our coverage.

However, (as that link mentions), the act does not apply to the U.S. military or the VA. It does not apply to disability insurance, long-term care insurance, or even life insurance.

Your health affects your premiums.

Insurers may learn about your genome anyway. Oncologists will routinely screen the genomes of cancer patients to identify the optimal chemotherapy. (Genetic screening also flags the cancer drugs which will kill you with an allergic reaction.) Your APOE4 information may end up in your health record without your consent or even awareness.

When I retired from active duty, we canceled my life insurance. (My spouse and I already had enough assets.) I don’t carry disability insurance. (I don’t need the income.) I won’t inflict long-term care insurance on my caregivers. (We have enough assets, and they don’t need the stress.) We carry Tricare health insurance, but we don’t even bother with dental insurance. We’re also comfortable with concierge medicine.

When my father died, I inherited his assets (and some insurance). It amounted to nearly 15% of our net worth, but the money doesn’t change my life. It won’t make my spouse and me any more financially independent than we already are, but it should cover a few more years of our long-term care.

More importantly, our daughter has immediate access to those inherited funds through Fidelity’s durable power of attorney. Caregivers suffer enough stress without having more financial stress.

By the way, we’re not going to make control-freak jokes about “Long-term care insurance by Glock”. (Submariners have a notorious reputation for that.) My father and grandfather enjoyed some of the happiest years of their lives with dementia, even though it wasn’t the life they would have chosen. I’m certainly interested in palliative care, yet I think that I’ll always be curious about the next sunrise… even if I can’t remember them. I’ve enjoyed over 6000 days of financial independence to develop that habit.

Disability Planning and Estate Planning

Click on the image for more info.

When my father developed Alzheimer’s, he only had a minimal estate plan in place: a will and a medical directive. There was no plan for his disability… not even after his own father dumped that problem on him 20 years earlier. My father had six solid years of cognition after his father died, and yet he somehow never got around to putting the plans in place.

When I started handling Dad’s finances, my knowledge of disability planning for my spouse and me was even worse: only our “In Case of Emergency” file of logins & passwords. We had an estate plan, but it was legally useless for our disability.

Managing Dad’s assets for over six years gave my spouse and me plenty of opportunities to reflect on our plan. Despite our conclusions, it’s still taken months to put it into place.

When dementia appears, it’s too late to do the disability or estate planning. (Besides, once dementia starts, the word “No” is the easiest sentence in their vocabulary.) Lawyers and notaries won’t endorse a new general power of attorney, and existing general POAs become invalid with mental incompetence.

If you (or a loved one) end up in dementia or in a coma, then you can’t count on a general power of attorney. You might be able to rely on a durable POA (depending on the financial institution) and you should be able to depend on a revocable living trust.

You can always hire a lawyer and petition your local probate court for appointments as guardian and conservator. In our case that cost over $10K and several months of paperwork. It included an interview with a professional conservator (“Why should the court let you be your father’s conservator instead of hiring someone like me?”) and a criminal background check.

The real caregiver stress started with the conservator’s appointment. Many financial institutions either ignored the appointment or misunderstood it. (Pro tip: transfer the funds out of those corporations as soon as you can.) The probate court required annual reports and updates for every major change.

Again, this time the Ohana Nords caregiver stress stops with me. My spouse and I have spent hours researching and updating our disability plan. We’ve been married for over 32 years (and we’ve known each other for nearly 40) but the discussions have still been a little intense and revealed some emotional surprises.

It’s not just confronting your own vulnerability and mortality. No matter how ready you are, the legal hoops are darn hard to jump through. Even when you want to do the right thing (and when you trust your caregiver) it’s still too hard to create the paperwork. It’s prudent legal practice to protect well-meaning people from their own mistakes, but it’s just too hard.

I used to think that people couldn’t confront their disability planning. Now I know that many of us make an attempt and then simply give up in the face of legal bureaucracy.

The good news is that we finally worked through all the difficult conversations. Our daughter agrees with her part in the plan, and we’re drawing up the paperwork. We’re using an interesting combination of a revocable living trust, a pile of durable powers of attorney, and a couple of joint checking accounts. I’ll write another post about that when it’s in place.

Your Call To Action

3500 words. Got it. Now what?

I’m trying to boost a long-overdue intergenerational discussion. Hardly any of us mention our aging elders and their dementia challenges– yet when one of us shares a story, everyone in the room has a story too. Feel free to add yours to the comments below or in one of our Facebook groups.

Help other generations join the conversation. Even Gen Z is dealing with grandparents or parents who are living with dementia. I’m happy to talk through your questions and your problems.

In my next 25 years, long-term care expenses are going to level off or drop. Medications and care techniques are improving every year. There’s even the promise of caregiver robots. (Don’t laugh– I’m an angel investor, I’ve done the due diligence, and I’ve made meaningful investments in medtech.) We can track the care options.

Whether or not you decide to research your genome, learn how to live your healthiest lifestyle. If something bad happens, you want to know that you tried to mitigate it.

Carpe every diem. Regardless of your genes or your lifestyle, nobody knows how much time we have left. Would you prefer to live in the moment without worrying about the future? Would you stay in a terrible career out of a scarcity mentality and from fear of the unknown? Are your relationships sucking away your life energy?

Or would you rather save for financial independence and plan for your future with people who share your goals?

The next time we’re hanging out together, you can bring along this Alzheimer’s scorecard and see how we’re doing. One popular dementia check is drawing an analog clock face and showing the hour & minute hands at various times. (“Grandpa, what’s a clock face?”) Another spot check is spelling a two-syllable word backward– in your head or out loud to your skeptical potential caregiver.

Feel free to bring along your favorite adult beverage, and I’ll stick with my cup of coffee, thanks.

USAA’s “Life Uninterrupted” Campaign – Get a Free Retirement Review

My next post about our Nords family FI life will have a lot more info about our disability and estate planning, but you can explore your options now.

My father had 20 fantastic years of financial independence, and he lived his best life for all of them… until he couldn’t. He still had enough assets to have great care for the rest of his life and even left a legacy for his heirs.

I’m following Dad’s FI example, although my spouse and I aren’t so concerned about leaving a legacy. We’re putting the plans in place for our daughter and son-in-law to step in (if necessary) while we work on our own best lives. My spouse and I can easily expect another 30 years, and I’m highly motivated to stay cognizant for all of them.

What will your #LifeUninterrupted look like? Have you planned for doing the things that make you happy without worrying about finances? There are lots of advice and planning tools, and a fee-only advisor can help you pick your path.

You can start with USAA’s free retirement review. Simply visit the USAA website and set up a free, no-obligation retirement plan review. You don’t even have to be a USAA member to participate.

The USAA financial advisor can help you review your retirement plan and potentially help you identify coverage gaps or areas you may need to address, such as long-term care insurance, an estate plan, life insurance, increasing your retirement savings, paying off debt, etc. Your review will be tailored to your specific situation, goals, and needs. Click this link for a free retirement review from USAA.

Or I’m happy to answer questions and help you find whatever type of advisor you want.

My final advice—manage your own assets as simply as possible—especially if you want to make it easier for your heirs (or successor trustees) to manage them for you.

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Related articles:
Good News! How Our Nords Family Financial Independence Life Will Change In 2019
Our Retirement – The Spending Smile Of Financial Independence
In Memoriam: My Father
Alzheimer’s Care Financial Update (April 2016)
Why I Won’t Buy Long-Term Care Insurance (December 2014)
The Pitfalls of Your Parents’ Finances (May 2014)
How I Cost My Dad Over $2000 In Medicare Benefits (January 2014)
Geriatric financial management update (September 2012)
Forensic geriatric finances (June 2012)
Geriatric financial lessons learned (January 2012, becoming a conservator)
Geriatric financial management update (November 2011, claiming long-term care insurance)
More on caring for an elder’s finances (September 2011)
Financial lessons learned from caring for an elderly parent (August 2011)
Book report: “The 36-Hour Day”
Book review: “When The Time Comes”
23andMe genetic testing
10 Early Signs and Symptoms of Alzheimer’s