# Presentation: 945980

- From Research to Reality:
- A Roadmap to Financial Security in Later Life
- Marlene S. Stum
- University of Minnesota
- National Initiative Roll-out conference
- March 2002

- We’ve been working for you!
- Research Framework and Educational Strategies Work Group

- Marlene Stum, Chair
- University of Minnesota
- Janet Bechman
- Purdue University
- Suzann Enzian Knight
- University of New Hampshire
- Barbara Rowe
- Utah State University
- Sommer Clarke
- USDA-CSREES

- What are the key factors that affect a person’s financial security in later life?
- What puts people at risk of insecurity?
- What helps protect and strengthen financial security?
- Are the risk and protective factors working at the individual, family, or larger environment system levels?

## SYSTEM INFLUENCES

**Within**
**Family**

- MSS0209-l.ppt

**Outside**
**Family**

*Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001).*

**Individual**

- Figure 1:  A Systems Framework for Examining Later Life Financial Security Protective Factors

## Research Review

- Conducted literature review
- (1995-2002)
- Prepared annotated bibliography
- Aging parents and financial concerns
- Changes in life situations
- Demographic characteristics
- Health and long term care risk management
- Retirement planning
- Continue adding to the knowledge base
- Identify and address gaps in knowledge

## Age

- MSS0209-l.ppt

*Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001).*

**Age**

**Work patterns**

**Life expectancy**

**Marital status**

- Figure 1:  A Systems Framework for Examining Later Life Financial Security Protective Factors

**Health Status**

**Gender**

**Individual**

## Within Family

- MSS0209-l.ppt

*Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001).*

**Multiple Income Sources**

**Within Family**

**Saving/Asset Management**

**Risk Management Plan**
- Health & long term care

**Estate & Distribution Plan**

**Self-Efficacy/ Confidence**

**Financial Literacy**
- Later life events

**Conflict Management**

- Figure 1:  A Systems Framework for Examining Later Life Financial Security Protective Factors

- Needs
- Attitudes
- Financial goals
- Aging parent issues

## Outside Family

- MSS0209-l.ppt

*Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001).*

**Professionals**
- Available
- Affordable
- Knowledgeable

**Social Norms**
- Personal responsibility

**Private & Public Policies and Practices**
-   Inheritance/
-          Estates

**Outside Family**

- Figure 1:  A Systems Framework for Examining Later Life Financial Security Protective Factors

**Information**
** ****Sources**
-    Available
-     Quality

**Predictable Macro-economic**
**      ****forces**

## SYSTEM INFLUENCES

**Within**
**Family**

- MSS0209-l.ppt

**Outside**
**Family**

*Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001).*

**Professionals**

**Multiple Income Sources**

**Social Norms**

**Private & Public Policies and Practices**

**Individual**

**Gender**

**Age**
**Ethnicity**

**Work patterns**

**Health & independence**

**Life expectancy**

**Marital status**

**Saving/Asset Management**

**Risk Management Plan**
- Health & long term care

**Estate & Distribution Plan**

**Self-Efficacy/ Confidence**

**Financial Literacy**

**Conflict Management**

- Figure 1:  A Systems Framework for Examining Later Life Financial Security Protective Factors

- P

**Information**
** ****Sources**
**     **

**Macro-economic**
**      ****forces**

- Which of these protective factors can extension programming effectively address?
- What is it that individuals need to do to achieve a financially secure future?

## To Achieve Financing Security

- Plan. . .for a long and vital life
- Act. . .do it now!
- Evaluate . . .as changes are      needed

## Take the Road to Financial Security in Later Life

## Take the Road to Financial Security in Later Life

- Developed by National Initiative Management Team Members:
- Marlene S. Stum, University of Minnesota
- Suzann Enzian Knight, University of New Hampshire
- Janet Bechman, Purdue University
- With assistance from Sommer Clarke, U.S. Department of Agriculture, Cooperative State Research, Education, and Extension Service (CSREES)

## Objectives

- Clarify myths and realities about later life events and financial security
- Recognize common factors that increase an individual’s risk of facing later life financial insecurity
- Identify reasons why achieving later life financial security can be rewarding
- Understand the importance of planning ahead and what later life events are normal

## Objectives

- Identify specific action steps that can help protect later life financial security
- Recognize the importance of evaluating existing plans and actions
- Assess their personal progress in planning, acting, evaluating
- Discover research-based resources to help make more informed decisions

## Target Audience

- Baby Boomers
- Born between 1946 and 1964
- Ages ranging from 38 to 56
- Planning for changes in work/retirement
- Looking toward later life
- Dealing with aging parents

## 
One-third of your life may be ahead of you after 60!  
Will you be prepared?

- One-third of your life may be ahead of you after 60!
- Will you be prepared?

## Achieving financial security in later life rarely           happens without            some thought.  

## Why is achieving later life financial security an important destination?

- Next Exit . . .
- Financial Security

## Reasons for the Road Trip

- Financial security for yourself and important others
- Peace of mind
- More choice and control
- Having your wishes known
- Reduced burden for others
- Reduced potential for conflict
- Improved quality of life
- Increased independence and dignity

## Determine what financial security means to you and why it is important
Financial security will not mean the same thing to everyone
Do not expect “family” to be one voice!
Talk with others important in your life!

- Financial security will not mean the same thing to everyone
- Do not expect “family” to be one voice!
- Talk with others important in your life!

**CAUTION**

**CAUTION**

## Start Here:  Milepost #1

- For normal later life events

## A Scenic Overlook

- into
- Your Later Life
- What do you see?

## Normal Later Life Events

- Longer life expectancies
- Changing work and retirement patterns
- Changing health and independence
- Family transitions
- Involvement with aging parents
- Death

## Year of Birth
1900
1960
2000
2050

- 1900
- 1960
- 2000
- 2050

- _Life Expectancy_
- 49 years
- 70 years
- 77 years
- 89 years (projected)

- Americans are living longer than ever before:

## If you are 65 in the year 2000, 
Females can expect to live another 19 years to age 84
Males can expect to live another 16 years to age 81
If you are 85 in the year 2000, 
Females can expect to live another 7 years to age 92
Males can expect to live another 6 years to age 91

- Females can expect to live another 19 years to age 84
- Males can expect to live another 16 years to age 81
- If you are 85 in the year 2000,
- Females can expect to live another 7 years to age 92
- Males can expect to live another 6 years to age 91

- Life expectancies at ages 65 and 85 are increasing

## The chances of experiencing poverty and outliving ones’ resources increase with age
Especially among 85+ year olds, women, minorities, and individuals living alone.

- Especially among 85+ year olds, women, minorities, and individuals living alone.

## The meaning of retirement is changing

- Changing Work and Retirement Patterns

- Gradual
- Process

- Working Part
-  or full-time

## Individuals are increasingly responsible for having multiple income sources
Savings/investments/retirement plans (401(k’s), 403(b’s), IRA’s)
Pensions
Social Security
Earnings

- Savings/investments/retirement plans (401(k’s), 403(b’s), IRA’s)
- Pensions
- Social Security
- Earnings

## Social Security remains a critical source of income in later life

Without Social Security nearly 1 in 2 over 65 would be in poverty

- Without Social Security nearly 1 in 2 over 65 would be in poverty

## Employees are responsible for more retirement income risk and responsibility.
Choose to participate?
Amount contributed?
Where invested?
Roll-over decisions?
Borrow from balance?

- Choose to participate?
- Amount contributed?
- Where invested?
- Roll-over decisions?
- Borrow from balance?

## Individuals will have to effectively manage multiple income sources

- 401(K)

- Social Security

- Pension

- Earnings

- Investments

## Changing health and independence

- An overwhelming majority of individuals will face a healthy and active later life
- 75% report no problems remaining independent!
- Without protection against common expenses related to changes in health, no one should feel financially secure
- Out of pocket expenses can be devastating
- Health insurance beyond Medicare is critical
- Long-term care needs can be very costly

## The longer one lives, the greater the chance of experiencing health-related changes and the risk of costly long term care
The use of home health care and skilled nursing care increase dramatically with age, especially 85+
1% of persons 65-74 need skilled nursing care versus 18% for persons 85 and over
Medicare does not pay for long term care!

- The use of home health care and skilled nursing care increase dramatically with age, especially 85+
- 1% of persons 65-74 need skilled nursing care versus 18% for persons 85 and over
- Medicare does not pay for long term care!

## Family Transitions

- Individuals will be a part of more complex and changing families
- Family roles and relationships will last longer
- There will be increasing numbers of living generations, with fewer family members in each generation

## Six Living Generations!

- Sarah
- 115 yrs

- Kathryn
- 92 yrs

- Robert
- 70 yrs

- Sally
- 22 yrs

- Bradley
- 2 mos

- Sarah
- 46 yrs

## Living with a spouse plays a key role in remaining independent and financially secure
If you are married, plan for widowhood, especially if you reach 85
Nearly 3/4 of women who were married will experience widowhood when they are 85 and older
Women on average live 17 years after the death of their husbands

- If you are married, plan for widowhood, especially if you reach 85
- Nearly 3/4 of women who were married will experience widowhood when they are 85 and older
- Women on average live 17 years after the death of their husbands

## Involvement with aging parents

- A majority of elders living in the community rely on unpaid help from family caregivers.
- Plan for the costs involved in caring for aging parents/in-laws

## Death

- Planning ahead for your own death can reduce the financial and emotional challenges for your survivors

## Milepost #1

- Talk with others about:
- Beliefs and attitudes
- Financial needs and concerns
- Financial goals

## Next Stop:  Milepost #2

- Taking a combination of actions can help you achieve financial security

## Identify future income needs
Build multiple income sources
Savings/investments/retirement plans
Social Security
Pension plans
Build savings and assets

- Build multiple income sources
- Savings/investments/retirement plans
- Social Security
- Pension plans
- Build savings and assets

- Take Action

## Evaluate health insurance options after retirement
Identify and communicate strategies to manage the risk of long term care
Create and communicate an up-to-date estate plan

- Identify and communicate strategies to manage the risk of long term care
- Create and communicate an up-to-date estate plan

- Take Action

## Talk with aging parents about their estate and long term care plans

Organize financial records

- Organize financial records

- Take Action

## Milepost #3

- Regularly revisit plans and actions
- Make adjustments

## Legal documents
Wills
Power of attorney
Advance health care directives
Beneficiaries
Insurance coverage
Property ownership
Progress toward financial goals

- Wills
- Power of attorney
- Advance health care directives
- Beneficiaries
- Insurance coverage
- Property ownership
- Progress toward financial goals

- Regularly Evaluate

- Where are you on the
- road to financial security
- in later life?

## Navigating Help is Available
www.reeusda.gov/financialsecurity
Click on “consumer” bar
Unbiased information
No gimmicks
No sales pitches

- www.reeusda.gov/financialsecurity
- Click on “consumer” bar
- Unbiased information
- No gimmicks
- No sales pitches

## Take the Road to Financial Security in Later Life includes:

- Facilitator’s guide
- Critical concepts/suggested activities
- PowerPoint presentation
- Participant handouts
- Take the Road brochure
- Are you prepared worksheet
- What’s Beyond 60 fact sheet
- Roadmap checklist
- Evaluation tools

## Take the Road to Financial Security in Later Life

- Materials available by April 25th at:
- www.reeusda.gov/financialsecurity
- Click on “Educators” bar
- Go to Initiative Program Toolkit
- Then click on“Roadmap to Financial Security”

## Take the Road to Financial Security in Later Life

- “Take the Road to Financial Security in Later Life” color brochure
- Up to 1000 copies per state can be ordered
- Order in increments of 100
- Discuss what you need with your state teams
- Quantities are limited--order only what you will use
- Place your state order at the registration desk
- USDA will print and ship during April/May
- Available in PDF format on initiative website in April
- Add state/logo identity --labels/stamps

## Suggested Uses

- As an introduction to more in-depth programs
- Investing for Your Future
- America Saves
- Legal Check-up
- Critical Conversations About Long Term Care
- Planning for a Secure Retirement
- Who Gets Grandma’s Yellow Pie Plate?
- For specific target audiences
- Women
- Baby boomers
- Farm/small business families
- Late savers

## Take the Road to Financial Security in Later Life

- Enjoy your professional road trip from research to reality.
- There are important mileposts and opportunities ahead!
- www.reeusda.gov/financialsecurity