It’s conference and continuing education time again. This year the Association of Divorce Financial Planners (ADFP) had a joint conference with Center for Mediation & Training, which is located in New York City. The Keynote speaker was Jean Chatzky, a personal finance expert, best-selling author, and the financial editor for NBC’s Today Show. There were several other main speakers, including Robert Pokorski, MD. He is the Vice President & Medical Director for Prudential.
His talk was on protecting against non-financial retirement shocks. The five areas he covered were:
- Pre-retirement shocks (serious health problems, job loss, loneliness as you approach retirement, and frail parents or in-laws);
- Health care costs;
- Chronic illness care.
According to Dr. Pokorski’s presentation, titled “Protecting Against Non-Financial Retirement Shocks,” approximately 4 in 10 people retire earlier than planned because of:
- Poor health;
- Job loss; or
- The need to care for a spouse or other family member.
Another statistic was the estimated average, out-of-pocket medical costs for a couple retiring in 2014, which are even greater if chronic illness care is needed:
o Age 62 - Out-of-pocket costs: $271,000
o Age 65 - Out-of-pocket costs: $220,000
o Age 67 - Out-of-pocket costs: $200,000
Longevity was another point. The statistics given were in approximates:
- Healthy men and women, age 65, are expected to live to age 87 (men) and 89 (women).
- 40% of men and 50% of women will live to age 90.
- 1 in 7 men and 1 in 4 women will live to age 95.
- 3 in 100 men and 9 in 100 women will live to age 100.
Regarding widowhood, some of the statistics given were:
- 3 out of 5 sixty-five-year-old couples will reach age 80 together (59% will reach age 80 together and 41% will not reach age 80 together).
- 7 out of 10 sixty-five-year-old couples will be widowed for five years or more.
- More than 4 out of 10 will be widowed for ten years or more.
- Widowhood is more common for women.
Concerning chronic illness care:
- 7 out of 10 people age 65 and older will need chronic illness care.
- Conditions that require short-term chronic illness care:
- Heart failure
- Minor stroke
- Conditions that require long-term chronic illness care:
- Serious stroke
- Crippling arthritis
- Brain and spinal cord injuries
- Most chronic illness care is provided at home.
- 3 in 4 adults age 65 and older who need chronic illness care are:
- At home: 75%
- In assisted living and other supportive care settings: 15%
- In a nursing home: 10%
- Families will pay for most chronic illness care.
- The U.S. spends nearly $725 billion per year on chronic illness care.
- Most care is provided by family members.
The information that Dr. Pokorski provided was informative and topical, and I look forward to putting what I learned into practice. If you are confused about the many aspects of divorce, don’t hesitate to contact me at 1.888.U-2-AGREE.
Robert D. Bordett CFP, CDFA
Collaborative Practice and Mediation Services