From Research to Reality: A Roadmap to Financial Security in Later Life Marlene S. Stum University of Minnesota National

1. 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

2. 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

3. 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?

4. SYSTEM INFLUENCES Figure 1: A Systems Framework for Examining Later Life Financial Security Protective Factors Outside Family Within Family Individual Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001). MSS0209-l.ppt

5. 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

6. SYSTEM INFLUENCES Figure 1: A Systems Framework for Examining Later Life Financial Security Protective Factors • Gender • Marital status • Age Individual • Work patterns • Life expectancy • Health Status Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001). MSS0209-l.ppt

7. SYSTEM INFLUENCES Figure 1: A Systems Framework for Examining Later Life Financial Security Protective Factors Identifying and Communicating Conflict Management • Financial Literacy • Later life events • Needs • Attitudes • Financial goals • Aging parent issues Self-Efficacy/ Confidence Within Family Estate & Distribution Plan Multiple Income Sources • Risk Management Plan • Health & long term care Saving/Asset Management Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001). MSS0209-l.ppt

8. SYSTEM INFLUENCES Figure 1: A Systems Framework for Examining Later Life Financial Security Protective Factors Income Source Options (retirement/ work) Private Employer Public/Government Health and Long Term Care Risk Management Options Private Public/Government • Professionals • Available • Affordable • Knowledgeable • Social Norms • Personal responsibility Outside Family Predictable Macro-economic forces Information Sources Available Quality Private & Public Policies and Practices Inheritance/ Estates Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001). MSS0209-l.ppt

9. SYSTEM INFLUENCES Figure 1: A Systems Framework for Examining Later Life Financial Security Protective Factors Income Source Options (retirement/ work) Identifying and Communicating Health and Long Term Care Risk Management Options Outside Family Professionals Within Family Conflict Management Financial Literacy • Gender • Marital status • Age • Ethnicity Self-Efficacy/ Confidence P Individual • Life expectancy • Work patterns Estate & Distribution Plan • Health & independence Multiple Income Sources • Risk Management Plan • Health & long term care Information Sources Saving/Asset Management Social Norms Developed by Marlene S. Stum, University of Minnesota, and Suzann Knight, University of New Hampshire (2001). Macro-economic forces Private & Public Policies and Practices MSS0209-l.ppt

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

11. To Achieve Financing Security • Plan. . .for a long and vital life • Act. . .do it now! • Evaluate . . .as changes are needed

12. Take the Road to Financial Security in Later Life

13. 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)

14. 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

15. 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

16. 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

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

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

19. Why is achieving later life financial security an important destination? Next Exit . . . Financial Security

20. 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

21. CAUTION CAUTION • 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!

22. Start Here: Milepost #1 • For normal later life events

23. A Scenic Overlook into Your Later Life What do you see?

24. Normal Later Life Events • Longer life expectancies • Changing work and retirement patterns • Changing health and independence • Family transitions • Involvement with aging parents • Death

25. Year of Birth 1900 1960 2000 2050 Life Expectancy 49 years 70 years 77 years 89 years (projected) Americans are living longer than ever before:

26. Life expectancies at ages 65 and 85 are increasing • 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

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

28. Changing Work and Retirement Patterns • The meaning of retirement is changing Gradual Process Working Part or full-time

29. 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

30. Social Security remains a critical source of income in later life • Without Social Security nearly 1 in 2 over 65 would be in poverty

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

32. Individuals will have to effectively manage multiple income sources Social Security Earnings 401(K) Pension Investments

33. 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

34. 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!

35. 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

36. Six Living Generations! Sarah 115 yrs Kathryn 92 yrs Robert 70 yrs Sarah 46 yrs Sally 22 yrs Bradley 2 mos

37. 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

38. 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

39. Death • Planning ahead for your own death can reduce the financial and emotional challenges for your survivors

40. Milepost #1 • Talk with others about: • Beliefs and attitudes • Financial needs and concerns • Financial goals

41. Next Stop: Milepost #2 • Taking a combination of actions can help you achieve financial security

42. Take Action • Identify future income needs • Build multiple income sources • Savings/investments/retirement plans • Social Security • Pension plans • Build savings and assets

43. 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

44. Take Action • Talk with aging parents about their estate and long term care plans • Organize financial records

45. Milepost #3 • Regularly revisit plans and actions • Make adjustments

46. Regularly Evaluate • Legal documents • Wills • Power of attorney • Advance health care directives • Beneficiaries • Insurance coverage • Property ownership • Progress toward financial goals

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

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

49. 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

50. 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”