By The Advocates
The McKinsey Health Institute (MHI), an offshoot of McKinsey & Company, recently produced a report featuring a multifaceted analysis of the perceptions and priorities of older folks in 21 countries, and we like their mission in doing this: to add life to years, not just years to life. Well said.
Adding life to years requires an understanding of the values and needs of the population in question. In other words, we need to find out what’s important to older adults. According to MHI’s 21,000+ respondents, the top five important factors are:
- A sense of purpose
- Manageable stress
Having long relationships with clients allows us a window into the evolution of their needs as they age, and we’re aware now, more than ever, that there can be significant variations in the needs of different cohorts of post-work people.
The newly retired, we’ll say five years or less into retirement, are largely enthused and active, still excited about what they can accomplish without the burden of the daily grind.
Middle retirees are those retired more than five years who maintain reasonable physical and cognitive abilities, but perhaps the shine of retirement is beginning to fade.
Late retirees are the real OGs, long retired and feeling the impact of age, which may prevent an active lifestyle or social engagement. It’s important that we (and you) consider all these phases of retirement when drafting a vision for your future and the goals that are needed to support it.
Consider bullet #3 above. My grandparents passed away long ago, but I remember the ferocity of their desire to maintain their independence. It was a 70/30 mix of not wanting to “be a burden” to their children in their old age and just not wanting to go to a nursing home, which may be linked to pride or to the possibility of receiving poor care from those on whom they would be dependent. My parents now share this fear.
What can financial planning do to help our elders stay independent longer? There are solutions and tools that can help, as MHI points out, like planning for external support services (outsourcing household functions like laundry, housekeeping) and home renovations (like ramps and chair lifts) that may delay the need for full time care in a home.
Of course, each of these items cost money, some are recurring budget items, and some are large one-time expenses, both of which should be considered in your financial plan.
But beyond that, how can we adapt our thinking as the children of aging parents to consider these five factors? In an easy-to-miss sidebar in MHI’s piece, they show the benefits of intergenerational living, par for the course only a few generations ago, and something we’ll dive into next week as we embark on a month’s exploration of legacy and estate topics, a subject we often don’t realize the value of until we approach that age ourselves.