Episode 18: How to plan for caregiving

Oscarlyn Elder (00:05):

An important aspect of financial planning is making decisions about your care as you age. Discussions often center on financial topics including insurance and assisted or extended care, but there's way more to consider. Starting the conversation today with your family can help you live according to your values when you reach that stage of life. I'm Oscarlyn Elder, co-chief investment officer for Truist Wealth. And this is I've Been Meaning To Do That, a podcast from Truist Wealth, a purpose-driven financial services company. We appreciate you listening.

(00:41):

Caregiving can be a loaded topic for many families. Many people might be reluctant to discuss their wishes for a time when their autonomy may decline. Family members might also not want to consider a day when their parents or their loved ones need daily help. My guest today will offer important considerations for both sides of the caregiving experience. If you want to take notes on today's episode, we have a worksheet that you can download and print. You can find it by selecting this episode at Truist.com/DoThat. We'll have two additional documents that provide more background on the subject at the episode webpage as well.

(01:28):

And so with that, let me turn to my guest today, Adam Felts. Adam is a researcher with the MIT AgeLab. Welcome to the podcast, Adam.

Adam Felts (01:38):

Hey Oscarlyn, thanks so much for having me today. I look forward to chatting.

Oscarlyn Elder (01:42):

It's great to have you here. And Adam, before we jump into the topic at hand, will you tell us a little bit about your background and the type of work that the MIT AgeLab engages in?

Adam Felts (01:56):

Sure. My background personally is a little bit unusual for a social science researcher. I have a master's degree in theological studies from Boston University. And that has tended to make me more interested in more human questions, big human questions. So like, how people find or make meaning in their lives. And my background has also tended to make me more inclined toward qualitative research as opposed to quantitative research. So that means talking to people face-to-face and hearing their experiences and their stories in their own words.

(02:36):

And at the AgeLab, I guess I would say I have two main focuses of research. One is how people think about and plan for the future and how they imagine their future selves. And furthermore, how financial services companies can play a role in helping people plan for longer lifespans, for longevity. And the other thing I focus on is family caregiving. So, how family caregivers navigate the caregiving role, what challenges caregivers face, and how we might design solutions, products, services and so on that might make caregiving easier for people.

(03:14):

And then looking at the AgeLab itself, I think the AgeLab focuses, as you might expect, on questions related to aging and longevity. And the key demographic fact that drives what the AgeLab does is that people are living longer than ever before. The average lifespan of an affluent woman in the United States today is close to 90 years old.

Oscarlyn Elder (03:36):

Wow.

Adam Felts (03:37):

That's on average. Thinking about the upper bound of that, it means there are a lot of people who now can expect to live close to a hundred years old. And that matters not just for the later stages of our lives, the last phase of our lives when we actually are older. It has effects across the lifespan. And caregiving is one example of that. As people live longer, it's going to be more likely that their loved ones are going to have to provide care for them. And that's just one example. I think longevity has impacts in all other areas of life too. Thinking about our working lives, thinking about our family lives, thinking about our purpose in life. Those are just a few examples.

Oscarlyn Elder (04:18):

Adam, thank you for sharing your background and more about the MIT AgeLab. I want to point out to folks that you're not the first guest who's had a theological background. We had a guest from Duke University, Perry Long, who talked to us about budgeting, who also had a theological background. So I find the connection points and the academic connection points there really, really interesting. And I want to point our listeners to, I think the reality likely is that because you're focused on the qualitative research, you're likely a researcher who really cares about the why, not just the what. So often quantitative researchers are very focused on what, they're focused on the data. Qualitative researchers, to what you shared, really want to understand the why. They help us connect the data to the story so that we understand more of the why, which means this is going to be a really engaging conversation. And we're just so glad to have you here.

(05:16):

You mentioned the word purpose as you just finished your answer around the MIT AgeLab and your role there. I would like to take a moment—Truist is really a purpose-centered financial services company—and if you'll give us a moment, are you willing to share your personal or professional purpose or however you think about purpose?

Adam Felts (05:40):

Yeah, it's such a fun and maybe slightly intimidating question, but I can take a stab at it. I think I'll hedge by focusing on my professional life instead of my personal life.

Oscarlyn Elder (05:51):

OK.

Adam Felts (05:51):

That's easier. In my professional life, I think I would describe my purpose as trying to understand people better, really focusing on people as kind of the locus of investigation. So how people feel, what people think, and the accounts that people give of their lives and their experiences in their own words. And finally, doing justice to those experiences and how I report them in my research and in conversations like this one.

(06:21):

I think something I would add is that I work at MIT, and sometimes you have this issue at MIT where you have researchers or technologists who have a solution, which often that solution is like a technology of some kind. They have a robot or AI or something and they're wielding this solution in search of a problem. They're like, "I have this cool technology, I'm going to find a way to use it for something." I try my best in my professional life to maybe push back a little on that kind of technologist's impulse and try to keep myself grounded in hearing people first and their problems first, and then try to think about what is there out there that could possibly help them, whether that's technology or something else.

Oscarlyn Elder (07:06):

So Adam, as you described your purpose, I got goosebumps. I love the focus on people, people first. That is incredibly powerful and really cuts through to what matters. And I know as you share your perspective today, it really is with a goal of helping people lead better lives, and helping people be more informed and have conversations and lead better lives. So really appreciative of your perspective and your purpose. And so let's turn for a moment and really talk about caregiving. And specifically, when it comes to caregiving, can you give us an overview of the considerations that you think those who are listening should plan for regarding caregiving?

Adam Felts (07:57):

Of course. I think the first thing that I'd want people to consider, at kind of the broadest level, is that caregiving today is really common. It's more common than it's ever been. The reason it's become more common is because people are living longer than ever before. And so to put a statistic onto that, right now, approximately one-fifth of American adults today are family caregivers. And that's at any one time. So thinking about throughout the lifespan, people are cycling into and out of family caregiving roles. I can't put an exact number to it, but the odds are pretty good that any given person is going to become a caregiver at some point in their life or that they're going to need care at some point in their life. So given that probability, I think it's important for people to think about care in advance and talk about care in advance with each other, with their family members.

(08:54):

I think planning for caregiving primarily, not exclusively, but primarily is an interpersonal task. It involves talking with our family members about what we want, what they want, and being clear about expectations. And so some fundamental questions would be things like, who in my family do I expect to take care of me if I need it? Do they know that I'm expecting this from them? Because sometimes somebody will have that expectation and their family member will have no idea. And I would say that that's no bueno. Another example would be where do I want to live? If I were to require care, are my values such that I'm adamant about remaining at home for as long as I can? What are my feelings about assisted living or senior housing?

(09:38):

And really broadly, and I think this is a really important question when thinking about this, is what are the things that I care about the most and that I would really want to preserve in the event that I start to lose some of my independence and need help to live my life? Given that kind of situation, what do I really want to hold onto and protect and preserve, given some other maybe really major changes that I might be facing?

Oscarlyn Elder (10:03):

So those are critical questions that in some way appear to be really communication starters. And I guess the answers to those questions should be reflective of an individual's values and their preferences. You've got to kind of understand what your values and your preferences and ultimately what your wishes are. And then the critical piece that I heard there was communication of those. And so these are obviously some really big conversations, important communications that need to take place, and they can be filled with emotion. What are some of the observations that you have about these discussions, these important communications?

Adam Felts (10:44):

I guess I could split up my answer into people who are not caregiving yet but might be in the future, and then people who are already caregiving and kind of take those cases one by one. So for people who aren't caregivers yet, I think within families it can be really hard to get that conversation started. People are reluctant to talk about a situation in which they or a family member are no longer fully independent. In other words, we could say when they no longer have complete autonomy.

(11:14):

And autonomy I would say is this really fundamental good that defines in many ways what it means to be an adult, defines adult life. Something that we kind of fight for when we're teenagers or when we're younger, we develop it and we attain it in adulthood. And then at old age, it's really common sometimes that we have to give our autonomy up. And with that too sometimes comes the perception of becoming a burden on other people who then become involved in caring for us. All of that can be really hard emotionally to deal with, and sometimes people will deflect in conversation in order to avoid talking about it.

(11:54):

So just to give one example, my dad likes to use humor to deflect. And when I've asked him how he wants to be cared for, he'll say, "Well, you could just lead me out into the woods and leave me there."

Oscarlyn Elder (12:06):

Which you're not going to do, obviously.

Adam Felts (12:08):

I guess not. I think there are laws that prevent me from doing that. Or he'll say that he expects to drop dead immediately on the spot when he's 72. And so I don't have to worry about it. And again, that could happen, but I don't expect that to happen. And something that I find interesting is I often hear this from people, even folks my age, that they expect to drop dead relatively young. And as the kind of aging researcher in the room with that burden, I have to be the one who is like, "Just speaking statistically, the odds are pretty good that that's not going to happen and you're actually going to live a lot longer than you think you are." And ironically, this tends to be disappointing for my friends when I tell them that. They get disappointed about it, which I think to say the least is an interesting response and I think opens up a lot about how we think about old age and lifespan.

(13:01):

But putting that aside, I want to talk a little bit about people who are already in a caregiving situation, who in that case no longer have the luxury of deflecting because it's happening. I think something that I want to emphasize in this case again is the way in which caregiving is this profoundly interpersonal role. It's this really close relationship between two adults, one of whom has given up some of their autonomy to the other. And what that means is, and this is going back to this communication piece, there's this constant negotiation going on between these two parties, between the caregiver and carers at the end to kind of make it together through life.

(13:43):

An example that I like to give for this is my own grandparents. My grandmother takes care of my granddad, who's paralyzed on his left side from a stroke that he suffered about a decade ago. And they live at home still together independently, and every morning, at age 90—my grandmother is this tiny little woman, she's five foot one, probably, about 90 years old—and every morning she lifts my granddad, who is probably about 220 pounds, out of bed and into his wheelchair by herself, every single morning. And the only possible way that she could do that is that he helps her. So even though he's paralyzed on one side, he still has the use of the other side and he's able to use that remaining strength and capacity to help her lift him. And I describe this as a kind of dance between them that can only be accomplished, much like dance, by two people working together. And there's a profoundly emotional component to that dance because they're relying on each other to get through life in this really interdependent way.

(14:46):

So thinking about the emotional side of it, if my granddad is tired one morning and doesn't uphold his end of the bargain, my grandmother understandably gets upset and fusses at him, and then they start fussing at each other and it leads to conflict, to frustration. And I think consequently in our research, what we often hear overwhelmingly is that the most important attribute of the family caregiver, the most essential quality that the caregiver needs to have, is patience. Patience is the key virtue when it comes to caregiving, and that's because it involves this interplay between two people who each have their own preferences and their own values, and you're trying to work together to make it through life.

Oscarlyn Elder (15:26):

So Adam, I'd like to take a second. You've given us a lot to think about related to caregiving and care receiving and the complexity of the situation. I heard you say in the beginning, as we were talking about communication and conversations, you said that a lot of folks tend to anchor on the best case, I believe was kind of the way that you said it. So my takeaways here are, number one, it's really important that we all have an awareness that the best case is not the likely case. And we need to have a grounding in the likely case, which again doesn't necessarily mean the best case. So we need a dose of realism. We think about the potential for any of us to need care for ourselves, or for our loved ones to need care. So I took that away from what you said.

(16:16):

And then also here in what you are saying, the importance of communication. And so with that, are there any guidelines, any conversation starters, any ways to approach the topic? Either if you're the person who's planning for your own caregiving one day or you are the person... Once the expectation is put out there by a loved one that you will be the caregiver, what's a recipe perhaps for at least starting the conversations that need to be had?

Adam Felts (16:51):

Yeah, that's a great question and I think it's a complex one. I think it can really depend a lot on the individual case and the personalities of the folks who are in conversation with each other and what the relationship is like. But maybe going back to the point you made about being realistic, I guess I would say that being realistic doesn't necessarily have to mean being pessimistic or being negative.

Oscarlyn Elder (17:14):

That's right. OK.

Adam Felts (17:16):

So thinking about in the context of how to start these conversations, I think it's helpful to talk about what people want to have in later life or in situations like this, when one needs care. What are the things that you really want to make sure that you still have, that you really care about the most, that you really want to preserve? And hopefully that leads into a conversation about things that people value, that people love, that people care about, and hopefully to a conversation in which people imagine how those things can be retained even in a situation where that's not the best case scenario. You can still have a conversation that involves talking about good things and things that people care about, and the conversation, instead of being about decline and loss, which are still inevitably parts of this conversation, but they don't have to be the center of it. It can instead be a conversation about holding on to the things that people value.

Oscarlyn Elder (18:09):

I'm thinking about the framing of the conversation. I think what you're saying, and we've heard this before. Let me just say a common theme that seems to run through almost every episode is the importance of communication. Communication is the heart of relationships in so many ways. And so communication is essential, but the lens through which you see the conversation is really important. And so rather than thinking about it from the downside perspective, what I think I hear you say is that coming at it from a place of what to preserve, what's the priority, what's important to me—that coming at it from a different frame could be the key to having a really meaningful conversation that advances the dialogue with both the potential caregiver and the potential care needer, if you will.

Adam Felts (19:03):

Yeah, that's right.

Oscarlyn Elder (19:04):

I want to touch on a second—you mentioned your grandparents and the relationship there, that interdependency and that patience is a vital quality. Do you have... And this may not be your area of expertise, so you can hold up your hand or you can say, "Stop, no." But have you seen in any of your research how caregivers really work on their patience muscle or things that they do to help extend their ability to be patient? I just imagine that there has to be a replenishment, there has to be some type of mechanism, that patience in and of itself is not endless, and it's just important that the caregiver also have a focus on caring for themselves.

Adam Felts (19:58):

Yeah, it's a great question. It's something that we think about a lot at the AgeLab based on this finding about patience where it's like, well, how do you help people bolster and replenish their patience? And I feel like there's not a clear answer to that really specific question, but I suspect that it does have to do with giving caregivers time to rest and take care of themselves. And what we hear in our research constantly with family caregivers is that they do not have enough time to take care of themselves and that they sacrifice their self-care in order to take care of their loved one. And that has an effect over time. It can lead to a situation that people call burnout, which, burnout can sometimes happen in an acute situation where it's like—sometimes at the beginning of a caregiving experience where the caregiver is like, "I have no idea how to manage any of this. My life is suddenly totally different than it was before." If in a case where it happens suddenly, that can be a burnout situation.

(20:56):

But the other maybe more chronic situation is this longer term chronic burnout where the caregiver just doesn't have time to take care of themselves, and it slowly wears on them and presumably wears on their patients. So I mean, one thing that I often highlight and that we hear from folks is the need for respite care for caregivers. For a caregiver who's not able to have regular professional care to support them, if they can't have that, at least a support in the form of every so often, maybe once or twice a month, having a day where someone can come in and take over for them and give them a day where they can just take care of themselves. A lot of caregivers don't have that, and when they talk to us, they're like, "If I could just have one day a month, it would change my life." That seems doable. For people who don't have that, I feel like they could, that we have the resources socially to give that to them.

Oscarlyn Elder (21:49):

And maybe in listening to this episode, if folks are engaging in the conversation, the expected care receiver and the expected caregiver, maybe if proactively within those conversations, knowing the importance of patience and the importance of the overall well-being of the caregiver—it sounds like that is something that upfront in the planning process should be proactively addressed, that that could be part of the strategy. Here's what the care receiver needs, is going to likely need. These are resources that will be important, but also from the caregiver's perspective, what are the likely needs going to be and can we be as proactive as possible to align the plan and the resources to make that happen?

Adam Felts (22:38):

Yeah, I think if folks are doing that, then they are advanced in their abilities.

Oscarlyn Elder (22:43):

Right. Right. It tends not to happen.

Adam Felts (22:45):

Yes.

Oscarlyn Elder (22:45):

I mean, I don't think it happens that way often, but I think if we could get there in a proactive manner, perhaps it would lead to better outcomes over the long term.

Adam Felts (22:59):

I completely agree, and I think there's a bigger kind of framework here where people just don't prioritize their self-care. They don't realize that self-care is not just for yourself, although it should be. It's also for your ability to take care of other people. So even if you say to yourself, "I'm not going to prioritize myself at all, I just want to care for this other person," you still have to take care of yourself or you won't be able to care for this other person. It's essential.

Oscarlyn Elder (23:23):

Adam, thank you so much for providing that perspective for us. What I heard there, hopefully folks are taking away the importance of planning for a base case, not a best case, the role of communication in planning and how it's essential, and then the importance of patience and self-care to the caregiver.

(23:53):

Now we're going to take a moment and we're going to consider the cost of caregiving for both you and your family. Caregiving involves some obvious costs as well as some costs that people may not always consider. Adam, can you introduce the major financial issues with caregiving?

Adam Felts (24:14):

Yeah, I think the cost of caregiving can come from many different directions, but I think the biggest ones tend to be professional care support in the cases that a caregiver is paying for it, or more to the point, assisted living or nursing care in the case that it becomes necessary. So just focusing on assisted living, assisted living is really, really expensive. In Massachusetts where I live, the average cost of assisted living is over $7,000 per month.

Oscarlyn Elder (24:44):

Wow.

Adam Felts (24:45):

It's not always that expensive in every case, but in any case, a lot of people can't afford something like that. They can't even come close to affording something like that. And contrary to what a lot of people believe, according to our research, when we ask people, Medicare doesn't cover assisted living or nursing care, Medicare does not cover caregiving related costs. Medicaid will cover nursing home care, but Medicare doesn't. And that means that people with middle incomes, so people who don't make so much money that they can just pay for this stuff out of pocket, but who aren't low enough income to qualify for Medicaid, they end up falling into this middle income gap. Where that tends to lead, the answer for many families in that situation is that the person who needs care has to liquidate and spend down all of their assets so that they can get under the income threshold to qualify for Medicaid, and then Medicaid will fund their nursing care. I'm not an expert on that process.

Oscarlyn Elder (25:47):

Right. It's complex.

Adam Felts (25:47):

It's complex.

Oscarlyn Elder (25:49):

It's very complex, and we're going to make folks aware that there are resources that can help in that decisioning, but it's definitely its own area of expertise.

Adam Felts (25:59):

Yes, financial expert rather than aging researcher.

Oscarlyn Elder (26:03):

What we want to make sure folks know is that Medicare does not cover assisted living. It's really important that folks know that your research tells you that people have confusion around this.

Adam Felts (26:15):

Yes.

Oscarlyn Elder (26:15):

And so we want to clear up any confusion and make sure folks know that assisted living is not covered by Medicare. There is some support through Medicaid, but Medicaid, there are asset, income thresholds to be eligible for Medicaid. And so what you've seen in your research is an intentional spending down of assets. There's a lot of complexity around those rules, a lot of complexity. So we want to encourage people to learn more about that. However, the one obvious point that stands out to me is that if folks are spending down assets dramatically, and you specifically noted that this is a middle income gap issue, what you may see there then is that if you're having to spend down assets, the ability to transfer wealth to future generations is diminished. And so the power of multi-generational wealth accumulation really can be impacted in a negative way. So it's important that folks really think about the financial planning in addition to what we've talked about previously, but it's important that folks take time to consider the financial planning associated with assisted living care.

(27:29):

So you've talked about some of the direct expenses at a high level. There are other costs that can be significant costs associated with needing care, but that folks often overlook. Can you tell us about those?

Adam Felts (27:44):

Yeah, two costs that I like to highlight related to caregiving, and also longevity generally, are transportation and technology. Transportation is pretty sneakily one of the biggest costs that people face in their retirement years. And it's also one of the biggest factors for quality of life in old age, having the ability to go where you want to go when you want to. Really hard to overvalue that freedom, especially when somebody is no longer able to drive and they were relying on driving beforehand.

(28:19):

So in some cities, what can sometimes fulfill that role are paratransit services. So like in Boston, we have this shuttle service called The RIDE that picks up folks who are older or who have disabilities and gets them around the city, but you have to schedule trips with The RIDE days in advance. And understandably, sometimes people don't like that because they're not able to take spontaneous trips. So if you wake up one morning and you're like, "I really want to go to the ice cream shop," and The RIDE is the only thing available to you, you can't go, at least not using The RIDE. So looking beyond that, I think, you have on-demand transportation like cab services or ride app services. But if you're using those services frequently, the cost can really add up quickly.

(29:08):

And then putting maybe the financial cost itself aside, the direct costs, transportation as a caregiving task can be a massive strain on a caregiver's time if they become the transportation source. There's a scheduling and logistic component to providing transportation that can be more demanding than the actual money that goes into it and can sometimes be kind of the most challenging aspect of the caregiving role because it just takes so much time and involves so much scheduling.

Oscarlyn Elder (29:38):

So Adam, we want folks to understand then that there's always a lot of focus around the cost of assisted living, the cost of extended care. However, transportation is another direct cost that often folks overlook. And you're really pointing to some of the nuances around the different transportation options, the cost associated with them, really the cost-benefit. And so we've called that out. You also mentioned technology, so talk to me more about the technology angle and what's happening there.

Adam Felts (30:12):

So the era of longevity, if you want to call it that, is happening at the same time as an era of personal technology. And so as we're living longer, there's also increasingly technology that helps us to hopefully live better. Flip side of that though is technology costs money. And so increasingly there are all these new tools out there that are starting to feel less like luxuries and more like necessities that we may have to account for when we think about what we have to pay for in old age or as family caregivers supporting somebody who's older.

(30:44):

So a really simple example of this that I think we all take for granted is Wi-Fi, which at some time in the not-so-distant past did not exist. We didn't have to pay for it at all because it didn't exist. But now today for most people it's completely indispensable. And so all of us pay for Wi-Fi without a second thought, and it's just a minor, but still meaningful cost now that we all pay for. And as more tools become more available to us and maybe potentially have stronger use cases for helping us stay healthy in old age—so thinking about monitoring systems, thinking about wearables, ways that we can monitor our health and safety—these costs and these subscriptions can add up pretty fast. Probably not going to break the bank, but thinking about it as part of the totality of expenses can be significant.

(31:34):

I also want to give one other example, and this one's a little wild. There is a robot seal, a robotic baby harp seal designed by a robotics researcher in Japan, that you can buy, called Paro. Paro's main benefits are that Paro is fluffy, it responds to people's voices, it has eyelashes, and it's just generally cute and nice and everybody loves it. But Paro more specifically is designed to help soothe and accompany people who suffer from dementia. It's been clinically proven to help dementia patients and help to alleviate the situation that dementia patients deal with called sundowning, where they become agitated in the late afternoon and upset, and Paro helps with that. Right now, as far as I know, Paro is among social robots better at doing this than anything else that's out there. The problem is that Paro costs $5,000. One Paro costs $5,000.

Oscarlyn Elder (32:35):

So it's expensive. It's a pricey robot. Effective but pricey.

Adam Felts (32:40):

Yes. And I think the idea at first of spending $5,000 for a fluffy robot seal might sound absurd. Why would I spend that much money on something like that? But if you have a parent or a loved one who's suffering from dementia and you know that this technology is going to significantly improve how they feel on a daily basis, the seal starts seeming less absurd and more like something that you have to have that you're going to be willing to pay for. These are costs that are hard to predict, hard to budget, because it's hard to even know what's going to be available in the next 20 years, but they can be significant costs.

Oscarlyn Elder (33:16):

I think what you're pointing us towards here is that innovation is continually happening and the cutting edge innovations that improve quality of life, especially in a situation like this, can have large price tags associated with them. And so that may be a cost that's very difficult to predict, but it's helpful. We would encourage people to think about that, that there are unknowns. Things that we can't see exactly, but that we would expect will improve quality of life. And if at all possible you want to budget, have a line item or something in your financial plan that gives a nod towards the potential for that.

Adam Felts (33:57):

Yeah, we say that technology is a line item in retirement that most people aren't thinking about, but I think it's a real one. And we should take that to be a success story. Even though we're talking about it …

Oscarlyn Elder (34:07):

Absolutely.

Adam Felts (34:08):

... in terms of cost, it's good that there are these technologies out there that are hopefully going to make us healthier, improve our quality of life in old age.

Oscarlyn Elder (34:17):

I think about the impact of a social robot like Paro—if I'm saying it correctly—and if it's an extremely effective tool that, frankly, the benefit to the caregiver in that moment or in those moments every day—if the level of stress and care that's needed at that particular time is actually lighter because of the help from a robot. So to your point, we're focused on the dollars and it maybe sounded like a negative frame for me, but to your point, it's a positive frame. It's just, have an awareness, think about this line item in your financial planning.

Adam Felts (34:57):

Exactly.

Oscarlyn Elder (34:58):

All right, so we've talked now about some of the direct costs. Let's take a moment and talk about some of what you see from an opportunity or an indirect cost perspective when it comes to caregiving.

Adam Felts (35:11):

So I wish I had some up-to-date statistics on this. I'm working off of an estimate from back in 2011.

Oscarlyn Elder (35:18):

So we know it's a little bit dated.

Adam Felts (35:20):

It's dated.

Oscarlyn Elder (35:20):

It's a little bit dated, but gives us some direction.

Adam Felts (35:23):

Yeah, it'll give us an idea of how to think about this, I think. So according to this statistic that I have on hand, the opportunity costs of providing care to a family member in terms of lost wages from work is $300,000 over a lifetime on average. That's because people may leave the workforce, reduce their hours or turn down promotions in order to provide care. So that's a big one. Clearly, if you're not able to work because you're providing care, that's a major financial impact.

(35:54):

There's also another indirect cost of caregiving that's more of a psychological cost that can lead to financial implications. And that cost is that it's harder to think about one's future and to invest in one's future when the present is full of such a demanding responsibility as caregiving. So we often hear from caregivers that it doesn't feel possible for them to save for retirement, which materially speaking might sometimes just be true. They might just simply, might not have enough money, but in some other cases it might be more a feeling of being overwhelmed by present life rather than not actually having the means to save. And so people may need help to navigate that feeling of complexity and of being overwhelmed in order to plan better for their future selves.

Oscarlyn Elder (36:47):

Well that's really powerful, Adam. And leads me, now that we've covered really the direct and indirect costs that we see, we're going to discuss why we think you should consider having extensive conversations about caregiving with your financial professional. And just going off of what you just said there, I think that's a place that we see opportunity for a financial professional to help someone.

(37:22):

Adam, a lot of clients might have conversations with their advisors about costs related to caregiving and health care, such as long-term care or memory care or other types of insurances, even. But are financial professionals really ready to have these deeper conversations about these issues? What do you see—again, one of your areas of expertise, sir—working with financial professionals? I'm interested in what you're seeing.

Adam Felts (37:49):

A major part of the AgeLab's thought leadership, what we put out there into the world to try to influence folks, involves us saying that financial professionals should be able to talk about topics like family caregiving because they have profound financial and planning implications. And caregiving is just one. Kind of the overall thrust of what we talk about is, longevity should be on the agenda of the financial advisor, because the financial advisor has become this retirement planning expert. Or what that kind of becomes, then, is an expert on helping people imagine and plan for this new future that's affected by longevity, of which caregiving is a really big part.

(38:32):

And caregiving financially might even be the most significant aspect of longevity. I would say as of today, the industry is working on it. They're in the process I think, of developing this capacity to talk about these topics. A lot of companies have been putting effort into training and educating their advisors on caregiving to enhance their ability to talk about it. And I would say a lot of advisors now have had this capacity and are willing to talk about it, and some don't. Some are less willing, some see themselves purely as handlers of investments, this presence that can rationally handle your money and make you more money. But a lot of advisors are beginning to see their roles as more holistic in character.

Oscarlyn Elder (39:18):

I know we believe at Truist Wealth that it's really important that advisors be able to listen to clients, but also to engage in those really meaningful conversations. And we think of it from a perspective of the advisor holds the ability to hold a mirror up for a client. So hopefully to see things that maybe the client isn't seeing themselves or doesn't want to address directly, which often caregiving is just a topic that people view through an unpleasant lens at times. We're trying to give a different frame and hopefully help people facilitate those conversations earlier, frankly, so that outcomes can be better. But that mirror perspective so that if there's a cognitive bias, we're hopefully helping a client to overcome that. And then also the window perspective, which is hopefully an advisor can bring a client to a new window, a new frame of reference, and use that as a jumping-off point for a conversation.

(40:15):

So I do really appreciate, again, us focusing on the importance of these conversations. And I want to point out that your financial firm, if you have an investment account, they may be asking you for a trusted contact. And so you may say, well, what's a trusted contact? A trusted contact is a person who you can authorize your financial firm to contact in some limited circumstances. And this has been encouraged. It's connected to specific financial regulations that have been adopted by FINRA. And FINRA suggests that really everyone who has an investment account should have a trusted, or they suggest that you have a trusted contact.

(41:01):

And your trusted contact would help you in these ways. Your investment professional may need to get in touch with you, but perhaps they can't get in touch with you because you're traveling or there's a natural disaster, there's a concern about fraud, or maybe you're having a health issue. Your trusted contact is someone that you have the power to name that under limited circumstances, your investment professional can reach out to, to get help regarding how to get in touch with you or perhaps your power of attorney or your legal guardian, your trustee. A trusted contact cannot make trades on your account. They cannot make decisions about your account. And being a trusted contact does not make them a power of attorney or legal guardian or a trustee or executor.

(41:53):

A trusted contact is really someone who can help your financial firm help you if needed. And so we just, I want to point that out, want to encourage people to find out more. If you want to find out more about the trusted contact, there are great sources of information about it. FINRA has the FINRA Securities Helpline for Seniors, and that number is 844-574-3577. And then at finra.org, there is a wonderful sub-site that gets into senior investor protection updates. And I would just recommend, folks, if you Google that, FINRA Unscripted, FINRA Senior Investor Protection update, you're going to find a wealth of information, because ultimately we all want to make sure that we're protected, and a trusted contact can be part of that protection plan, if you will.

(42:54):

And it kind of leads me also to think, Adam, in your role, do you see trends in how seniors... The word "fraud" is coming to mind. Part of the point of the trusted contact is that if there is a concern about fraud, that the investment professional has someone that they can reach out to, again in limited circumstances. In your research, have you come across any trends regarding seniors and fraud specifically?

Adam Felts (43:22):

Yeah, there are a few things that come to mind for me that have been floating around in my world lately. Maybe not necessarily related to this trusted contact designation, but maybe in some cases it is.

(43:34):

I recently was at a symposium event on cognitive decline and brain health and financial fraud and financial well-being. And one of the facts that came up through one of the researchers who was at this event was that changes in financial behavior and financial competency start to come up five years before, in some cases, a dementia diagnosis—five years. Whether that's mispayments, more impulsive financial decision-making, or a higher susceptibility to being defrauded or financially exploited. And that means that financial advisors are kind of on the front lines of needing to be aware potentially of changes in the behavior of their clients who are older, and trying to identify cases where maybe their financial capacity as decision-makers is starting to change. I think that's a real challenge for the industry because it opens up a lot of gray area in terms of making judgments about the capacity of clients.

(44:37):

I think there are many cases where it's too difficult for a financial advisor to do because there's a subjectivity to it and not a lot of legal clarity about what it means to be, in these kinds of cases, like fully capable of making decisions. But I think it's a significant challenge, and it connects with the risk of financial fraud and exploitation, I think, which tends to be something that's primarily something that older adults deal with. They tend to be targeted more for financial fraud by strangers. There are aspects of older adult psychology that make them, in some cases, more susceptible to being victims of financial fraud and exploitation. I think this is something that's increasingly coming out in the world of financial professionals to help educate and devise ways to protect older clients from experiencing these kinds of events, because it can be really devastating.

(45:34):

And the flip side of cognitive decline in financial well-being is that experiencing a negative wealth shock, like being financially exploited, is correlated with developing cognitive decline. And so it goes both ways. And so that's kind of this higher-level risk of experiencing one of these major negative events, is it's going to impact our health too.

Oscarlyn Elder (45:58):

And we don't want those negative events. So going back to what I mentioned just a couple minutes ago, we really encourage folks to learn more about the trusted contact. The Financial Industry Regulatory Authority—or FINRA is the shorthand that we use as advisors—FINRA has a really powerful website that has lots of good information at it, that's finra.org, and you can click into ultimately "senior investor protection update." There's also a helpline for seniors at 844-574-3577. And of course, we encourage the conversation with your advisor as well because ultimately we want to make sure all of our clients are taken care of. We want the best outcomes possible for our clients.

(46:50):

Adam, thank you so much for providing such a comprehensive framework for caregiving. We hope that our listeners are going to use this information to start the conversation with the people who are closest to them and also with their advisor. And the word "people" comes to mind. This is kind of full circle because when you articulated your purpose earlier, the keyword in your purpose was "people." And I believe that by your being willing to come on to the podcast and share your expertise, you are going to make a difference in the lives of a number of people. So thank you so much for that.

(47:28):

Before we go, we have a tradition on this podcast of our guests really sharing something that they have been meaning to do and that they're willing to share, and they're also willing to publicly commit that they're going to be doing in the future. So do you have an "I've been meaning to do that" item for us?

Adam Felts (47:47):

Yeah, I'll keep it within the theme of the interview today. Hopefully some folks can relate to this one. I've really got to call my mom more than I do. Got to give my mom a call. And hopefully if she listens to this podcast, she'll hear that and then she'll hold me to account, like, "Why haven't you called me? You said you were going to do it on the podcast that I listened to. Still not getting calls from you, Adam." So that's the one for me. It's got to call my mom.

Oscarlyn Elder (48:15):

All right, so you're going to communicate more frequently with your mom and we're going to check in with you about how that's going in the future. That's a wonderful to-do item. So thank you for sharing.

Adam Felts (48:28):

You're welcome.

Oscarlyn Elder (48:29):

Adam, thank you again for joining me today.

Adam Felts (48:31):

Yeah, thanks so much for having me. This conversation has been great.

Oscarlyn Elder (48:37):

And for you listening, thank you for joining me today. If you liked this episode, please be sure to subscribe, rate and review the podcast, and tell friends and family about it. If you have a question for me or a suggestion for this podcast, email me at DoThat@truist.com. I'll be back soon for another episode of I've Been Meaning To Do That, the podcast that gets you moving toward fulfilling your purpose and achieving your financial goals. Talk to you soon.