Tuesday, February 21, 2012

Oh what a night!

That's the title of an old seventies song. "Oh what a night!" they sang, "Late December back in sixty-something". Yeah well my "oh what a night" was just last night. We spent seven hours in the ER for a stomach flu. Nasty business, the stomach flu. The ER isn't too backward either. It ain't nasty but it's no luxury hotel either!

The thing I realized or perhaps came to terms with, last night was this: when I write, I'm focused on the planning and execution of the financial branch of the caregiving equation for the simple reason that that can be controlled. What cannot be controlled, is when you're going to have to call 9-1-1, ride in the ambulance, and have your parent admitted to hospital. What cannot be controlled is what happens when the ECG comes back 'irregular' and instead of going home at 3:30 am, you have to wait another three hours for more tests to be run to ensure that the vomit and diarrhea aren't some weird symptom of some other, grander cardiac episode. (Bless God, they weren't.) Sometimes v&d are just v&d, if you know what I mean.

At the end of the day, I talk a lot about controlling the finances because that's all you can control. And I'm big into controlling what I can. Since it ain't much, I'm fixated on money like a panther is fixated on its prey.

I write at length, sometimes more coherently than others, about what it takes to keep the wolf from the door financially. What I cannot write about, because I don't entirely know how to do it myself, is how to keep yourself from shattering into tiny little pieces each time the fragile stability you've created (real or pretend) is threatened by an 11:15 pm 9-1-1 call.

Years ago, I told my family that we needed to build a resource base because navigating the rough roads of illness is tough enough without added burden of also being in dire financial straits. If' I've only ever said that implicitly before; if that's only ever been the unstated subtext to my writings before then here it is now, writ large and explicit: we make a plan and execute it because when our Mummy or Daddy is sick, we want to be able to do the best for them without fear of the consequences. We want to be able to preserve the dignity of the well and the ill simultaneously. That takes work. A lot of it. That work is more of the 'stewardship' I talked about (not especially articulately) the other day.

You are the steward of your parent's dignity and it will take more than a little effort to care for and protect it well. You will have to risk something if you are to gain something. For me last night, I had to risk holding my mother's hand. She was never a touchy, feely parent, so reaching out to her physically requires taking a leap. But she is my mother, and let's be honest, this journey through Alzheimer's Disease is a journey to the ultimate fork in the road where we will be separated first by silence and eventually by death.

So tonight, using less strident tones than I usually do, I'm asking you again, to be good stewards of your parents' resources; their opportunities; their futures. Sometimes the things over which stewardship needs to be exercised don't yet exist or are ethereal like your parents' dignities. You may be being called to be the steward to a future they can't see but you can. That was my call: to see it, to demonstrate it and in the absence of their belief or support, create it anyway, and then fight like h@!! to hold on to it!

Gandhi said, “Be the change that you wish to see in the world.” Well, we need to "Be the stewards we wish to see in our families". OK, that's not nearly as euphonious as Gandhi's quote, but I think you get my point.

Had to jump up and go see what Mummy was up to. That's the second spill of liquid on to the table and floor in under an hour. What's up with that?

Sunday, February 19, 2012

This one's for YOU (Part 2)

I know two retirees, both single women, who retired and then spent their entire retirement lump sums. Neither of them spent the money on anything that could generate a penny in income. One has since gone back to work, but is very fond of beautiful (expensive) clothes and drives only leased cars. Last I saw, she was driving a Lexus. The other had a similar story. Not quite as much conspicuous consumption, but she was worried about continuing to maintain her home and her own long term care needs.  Both I think, felt that it was too late to address their situations. They're both wrong.

Here's what I say: there is no such thing as 'too late'! It may be 'later than is ideal', but it's never 'too late'. If you're reading these posts regularly, you understand that that's what I'm trying to communicate. I don't share our chaos lightly. I do so in the desperate hope that someone, somewhere, is taking notes and trying to turn their family's ship before it runs aground.

So, with that preamble, here are the remaining three ideas from "This one's for YOU". As promised, this installment contains my thoughts on: generating lifetime income; paying off the mortgage and covering emergent medical expenses.

  1. Figure out how you're going to generate income for the rest of your life; income that is not related to or dependent on your pension. This income, ideally, will not require you to lift a finger. For some, it may come from investment property or investments. For others, it may come from a small business, 'a side hustle' as we like to say in Trinidad. What will it be for you? Creating a stream of passive income could be the very best thing you ever do. Perhaps in the beginning, this stream of income will require that you work very hard or require that you burn the candle at both ends. Recognize though that if done well, the exhaustion will have been worth it. There's nothing like checking your bank balance to see dividends paid in, or rents deposited to bring a smile to your face. Maybe it'll all make you rich, maybe it'll just allow you to stay afloat, either one will do.
  2. I've always thought that the best thing you could do for yourself was to ensure that your mortgage was paid in full at the time of your retirement. If you have a tentative plan to retire at 57.5 make sure that your mortgage is coterminous with your employment. That is to say, ensure that your mortgage bill will be paid in full at or before your last pay check. Not easy, but doable.....unless you're retiring tomorrow.
  3. And last but not least, if you have a family like mine, where it's one for all and all for one, you may want to consider creating a family account where everyone pitches in and saves money for emergent health care expenses. My family created one such (I wonder whose brilliant idea that was?) in 1998, which has paid for more than one emergency room visit with enough left over to help me pay for some bricks and mortar when I was building in 2009. Figure out who the signatories should be, the rules for withdrawal and repayment if any and get started. It's never too soon to start and it's certainly never too late.

    Why this is all necessary

    It may help to bear in mind that government retirement incomes are (in Trinidad and probably the rest of the Caribbean as well) on average only 67% of your last three years' wages. I don't imagine that the US is much different. Whatever that number might be, it represents an immediate pay cut of 33%. In one month, you would go from full pay to two-thirds pay. That alone should give you pause. Do you have a plan to close that one-third gap, or will you start immediately drawing down from savings? That gap will only widen as inflation takes its toll on your pennies, so you need a plan. You must either close the gap or live perpetually in a state of being just a little short.

    At the end of the day, this isn't about getting rich, though if you start early enough it's possible to get quite comfortable. I spoke with someone from the AARP headquarters here in DC and in our conversation he mentioned that the average retiree begins retirement (are you sitting down?) short $250,000 in savings. What I'm talking about, is filling that hole and trying to anticipate the other holes that may yet open up. Most folk have no idea what they might need to retire secure and comfortable. I know I don't. I'm guessing what I need is *a lot* and my current shortfall is *significant*, so I've got work to do. My work is in creating (done) and implementing (in progress) the plan to fill the hole.

    I say to you again, money (gratuity and other savings) is finite and always runs out, no matter your good intentions. Passive income, on the other hand, never runs out. You can rely on it being there. Take the time, while you're relatively young and you have time for mistakes and set backs, to create an income stream that will last. It's worth it to make the effort. Believe me. I know. It's taken me two years, and I'm 5 years later than I should have been, but I know that it can be done. As my situation attests, it's even possible to build something while juggling paying for care, but that's not a path that I recommend AT ALL. This is why I write, I'd like to save you this heartache. 

    So go out and do something: write a book; sell Avon, Mary Kay, Amway. Do something! Build a room and rent it out; buy a house and rent that out; bake cookies; sell jub jub and coconut drops, mauby and pickles (just don't buy a stupid time share!). I don't much care what you do, just that you do.  

    Lest any be confused, this is not about greed, it's about survival. Would that my family had understood that a decade ago.

    Stewardship : oikonomia

    A significant aspect of the caregiver's responsibility is financial management. In the instance though, where you're giving care you really can't just 'manage finances' or spend funds carefully until they are exhausted, but rather, financial management has to include some level of 'stewardship' or oikonomia. Lucky for Mummy, it looks to be my forté.

    I've spoken in generalities of the costs of care, but today, let's do a little math shall we?

    IF caregivers from a properly licensed and bonded agency cost $18.50 per hour, and a typical work day is 8 hours plus two hours travel time to and fro, we're looking at a 10 hour, $185 day. Basically, we're looking at a $925 care cost per week. Yes, that's nearly $1,000 each week. Don't worry, it gets better.....or is that worse? You decide.

    IF a month contains 4 weeks (which, it still does no matter how I've begged for a break), we're looking at a $3,700 per month care bill. Just to clarify, this is a patient still living at home. This is not a full service assisted living facility. Those can cost significantly more.  Consider also that if you haven't claimed your parent as your dependent, every dollar I'm referring to here is a post-tax dollar. Annualized, that's a hefty $44,000 out of your net salary

    To this we must next add the typical out of pocket costs such as: doctor's visit fees (either entire or co-payment), lab costs, dentist visits. Per an article I just read, a number in the vicinity of $5,000 is not unreasonable (see the article here). Please note that that number comes from an article written in 2009. It can serve only as a suggestion as to what any of us might face in the future. The  article's authors offer a slightly higher figure for older adults (75 - 84) and higher still for the 85+ age group. Whichever bracket your senior is in, the numbers add up. Quickly.

    SO, the GRAND total, and I do mean GRAND could be anything of the order of $50,000 per annum. So in a family like mine where we are blessed with longevity, a plan is critical. Five years of this is a cool quarter million. Ten years? Half million. I've got a relative who has been in need of care for a decade and a half. I guess now you understand fully why I strongly recommend both a long term care policy and a secondary stream of income! I say this all the time, and I've probably said it on this blog before, today's healthcare costs cannot be paid for out of today's earnings. 

    Every time I've come close to posting the actual numbers, I've told myself that it can't help; it won't help. People who don't want to know, will read these numbers and weep. Alternatively, they'll read these numbers and say, "Well, there's no way I can save that so I'd better not even bother to try." Or again, they'll say "To save that amount, I'll have to never eat again!" None of these responses is either true or helpful. 

    Start from a place of, "Well now I know" and move briskly from there to a place of, "Well, what do I do next?" and you will have taken the most important step to making a different future possible. My recommendation is not even that you try to out save the need, but rather that you try to out earn the need instead.

    So, getting back to the stewardship idea..............
    Once someone retires funds are limited. It is then that stewardship becomes crucial. Whomever is in charge of the funds cannot be like the servant in Matthew 25 (yes, I'm quoting the Bible), who, when given responsibility for 1 talent ($1000 in the Eugene Peterson version of the Bible "The Message") buried it lest he lose it. When the master returned some time later, the servant dug it up and handed it back. The master was not amused.*see the text below.

    There is always a risk of loss, but I can guarantee that if you don't try to grow the funds/talents there will be loss (our best friend inflation) and whatever you have will likely be insufficient unto your needs. If you start early enough you have time to make mistakes, lose ground, regain it and still end up ahead. Talk to some professionals, get some advice and 'go brave' as my Granny would say. Take a chance. Start small. I did. Ten plus years ago I had a taxi. While I worked at my desk, it worked on the road and it earned quite nicely thank you very much.

    Our situation..................................... 
    Mummy's long term care policy pays for 5 hours per day of care. Huge help! Me staying at home, saves us the remaining 5 hours of care costs but that costs me even more. So it is. It is an extraordinarily high price I pay but well, I put my 'expertise' to use here on the blog and elsewhere. 

    If you don't want to have to make these kinds of awful choices, pick up a pen and paper and start making a plan, today. If you have no idea where to start, talk to someone, even me. I'm not that far away. Truly. Send me an email and I'll be in touch. 

    What I would have paid if someone had told us this stuff.....oh yeah, I forgot. I did pay, it's called MBA tuition! Too bad no one listened huh?

    *From Eugene Peterson's 'The Message'
    14-18"It's also like a man going off on an extended trip. He called his servants together and delegated responsibilities. To one he gave five thousand dollars, to another two thousand, to a third one thousand, depending on their abilities. Then he left. Right off, the first servant went to work and doubled his master's investment. The second did the same. But the man with the single thousand dug a hole and carefully buried his master's money. 

    26-27"The master was furious. 'That's a terrible way to live! It's criminal to live cautiously like that! If you knew I was after the best, why did you do less than the least? The least you could have done would have been to invest the sum with the bankers, where at least I would have gotten a little interest.

    Thursday, February 16, 2012

    This one's for YOU (Part 1)

    It occurred to me the other day, that I've offered few real concrete 'things to do' type posts. Sure, I write in generalities about things you should be doing with and for your family (upper generation) but I haven't offered much when it comes to what you need to be doing for YOU. That is about to change. I've talked about creating stream of income a time or two I think, but today, I'm adding a few other thoughts. These are things that I'd either like to be able to do for myself or that I'm currently working on the best I can.

    Here's my list in no particular order. These are things you need to be doing for you, right now, today if you can. If it's already the end of the business day, permission granted to do them tomorrow. :-)

    There are six points in all. In this first installment I'm giving you just three: buy long term care insurance; consider disability waivers for your life insurance premiums and review your entire insurance portfolio. In the next installment, I'll tell you (again!) about generating lasting (non-work) income; paying off your mortgage and creating a family account for emergent medical needs.

    1. Get a long term care policy.  I can't say that enough! Get one. Get one NOW. Here's why. First of all, like other kinds of insurance, premiums go up as you age, so unless your name is Benjamin Button, you're as young as you're ever going to be. Now is the time. Second, hopefully you're in reasonably good health so you can qualify. Run, don't walk,  and get a policy. The only thing I would add is that you need to understand the policy's provisions. Review the terms and conditions carefully and make an informed choice but understand that if you eventually develop a chronic illness, this one choice will stand in the gap between your family and financial ruin. Take a look at this article on the failure of the Class Act (a provision of the Patient Protection and Affordable Care Act of 2010 aka Obamacare) which sought to make such coverage widely available. Buried in there is this gem, "[fewer] than 3 percent of Americans now buy private long-term care insurance" but it doesn't say what percentage are being wiped out by LTC costs. I don't know that anyone knows. So be among the 3%. Swim upstream, swim against the tide. Whatever, just buy a LTC plan. Avoidance and ignorance are dangerously expensive.

      I would especially consider the policy's lifetime benefit maximum (which will give you a sense of how much other (non-care related) money you will need to have) and whether the policy pays to family members who may have to provide care. Some policies don't pay family caregivers at all, others pay only a small amount. This may be an add-on benefit that you can buy, but as in all things, consider your family circumstances.

    2. Call your insurance agent and figure out whether your insurance policies have disability waiver of premium riders. If not, get them.

      This seems like a simple enough thing, however, as my cousin's post Ouch! Ouch! Ouch! attests, it can become burdensome to try to keep up payments when funds are required elsewhere.

    3. While you're on the phone with your agent, why not also review your life and other insurance (annuity) coverages? If you live in Trinidad or the Caribbean, consider buying some health insurance. It's not considered necessary and often we have it from our jobs, but if you change jobs, lose your job, or just decide to strike out solo, you've suddenly got nothing. Make sure that you have what you need and what your family needs for their long term protection.

      As for other insurance/protection, when last did you consider increasing your contribution to your annuity/401k? If you work in the US and your company matches contributions to a maximum of some percentage of your income (usually about 4%), are you contributing at the maximum? If not, why not? You're leaving money on the table and it might be time to pick it up. For my Trini friends, do you own an annuity? If not, why not? Don't put all your eggs in your company's basket. Don't be entirely dependent on your employer to provide your retirement. Perhaps it's time to kick things up a notch?

      Because this is a lot, I'm stopping here so that you can process and consider (and hopefully act). I'll post the remaining three thoughts in a day or two.

    Saturday, February 11, 2012

    Ouch! Ouch! Ouch!

    I must be lazy. How in the world do people keep up this pace?!

    I should be fair to myself - my life isn't average. Still, though, I know that I'm not - I can't be - the only one that has a challenging life. It's just that this morning, I feel particularly challenged.

    My mother had a seizure this morning - and that's always stressful. Add to that workmen in my house - spending my money!

    I try not to worry about money matters. I have a budget that I endeavour to stay within, I save money - I try to be diverse in my savings strategy, and I work to make sure that neither my mother's nor my insurance policies default. I even save specifically toward an annual get away - which of course means not just saving toward my expenses, but also saving for extra nursing care while I'm gone.

    Somehow though, my budget always gets messed up, and my savings gets depleted to almost starting-point by emergencies. Ridiculous thousand dollar emergencies! I know, you're thinking that I should be thankful - I have money to manage emergencies. Let me be very clear then... I work for a non-profit organisation. I have no benefits. Whatever life/health protection or services I need, emergencies included, I pay for out-of-pocket. If I loose my job in this economy, I loose near everything.

    I've only recently started making enough money to save, so there isn't that much put away yet. (Forget that 6 months of salary buffer those idiot economics gurus talk about needing) My mother's savings have diminished greatly - thankfully not from being squandered, but spent on essentials, like her care, or those pesky emergencies I mentioned. The one such emergency that I'm spending on now is the bathroom.

    I live in an old house. It was my grandparents' marriage home - built in the 1930s I believe, so it's old, and in disrepair. When the bathroom door collapsed off the termite and water rotted door frame last week, the plan that I had to renovate it got moved to the top of the priority list. Unfortunately, the cost was prohibitive. So I had to rearrange my budget, and scale back to repairing the bathroom now instead of saving toward renovating it later.

    My vacation plans took the hit. I'm not happy about it, but what can I do - not fix my old, rotting, falling-down-around-me house?

    It's just that I'd like a break. I'd like to be able to make a plan and have it go smoothly, without having to resort to contingencies B, C or D. It is emotionally and mentally taxing to have to be on your toes all the time. Think about it in literal terms - if you stand, walk and run on your toes all the time, eventually you'll get a cramp.

    I'm catching a mental cramp, dammit!

    Friday, February 10, 2012

    Time off for good behavior

    Today, this week, my exhaustion is complete. It's physical, it's mental, it's spiritual and I won't bother to mention that it is also financial. I've talked about that enough for you to get that without me even having to say it.

    This week has been particularly challenging. I suppose it was inevitable that at some point, my system would shout, "Enough!" but the trouble with caregiving, is that there are no breaks. Even when you can't do any more, you simply have to do more. That which needs to be done won't do itself apparently. I told my sister the other day that even criminals can get time off for good behavior. Caregivers, not so much. This makes me wonder if being a caregiver is even worse than being a criminal? That right there is a philosophical debate for which I haven't the energy. I don't have the energy for much of anything right now.

    The cause of my stress this week is pretty simple: I've been facing the real prospect of having to help my mother with more of her personal hygiene routines. That's about as delicately as I can put it. Let's just say that there is evidence that that time is coming. Whoo hoo!! Just the thought has run me into a brick wall of despair that I'm finding difficulty working around. (The best I've come up with is natural drugs: two workouts a day should generate enough serotonin to get me back on even keel. We shall see.) Even as I face that reality, I have to keep in mind that my life is a coin. On the one side stands Liesl the caregiver, who simply does what must be done, even to the point of assisting with personal hygiene and whatever else arises. On the other side, stands Liesl the job seeker, who must remain bright, articulate, engaged and engaging if she is to find work that will allow her to use her mind for something other than planning an outing to the doctor's office or figuring out how to make $1000 out of $5.

    I shouldn't be surprised that I'm at this point. It's been two years of unrelenting pressure. There was the reconstruction of the house (with all its glorious decisions and challenges); gaining access to Mummy's resources; finding resources!; getting a new Will and POA (US); the POA (Trinidad) and more recently, the Committee (Trinidad) and now I'm trying to  finalize Mummy's Executrix responsibilities for my grandfather's almost 30 year old estate because she didn't do it when she was competent. And this may yet be the most taxing and personally challenging task. Just writing the list is tiring me.

    I've juggled so many balls over the last couple of years that I've often said if I let one fall I'd end up with a concussion, there were so many of them in the air. Somehow though, I've managed to avoid the concussion(s), and many of those balls are, at long last, no longer in the air. The 'to do' list is now largely 'to done'. Bless the name of Jesus! (That's not proselytizing or anything, that's me saying "Thank you Jesus for sustaining me through it all".) So I'm nearing the end of this 'set up' phase of the financial aspects of caregiving and transitioning to the execution phase. Hallelujah, but who knew it would take two years? Raise yuh han' because I surely didn't.

    I can't wait for the day when all that's on my mind and in my hands is TODAY and things are settled and working smoothly in anticipation of tomorrow. Oh what bliss! Then there will finally be an opportunity for time off, good behavior or not. I might actually get to, I don't know, rest, maybe get in a hammock and swing? I can only pray.