Why Planning for Aging Has to Start Before There’s a Crisis

When I was a kid, we spent a lot of time with my mom’s parents. Picture “sweet, doting grandparents,” and you’re probably thinking about them. They were the best.

They would stay with us when they were in town. On one visit, they sat down for their morning coffee and a glass of water, and my grandma pulled a dropper out of her purse. She put a few drops of mystery liquid into her glass and my grandpa’s.

My mom asked, “…what is that?”

My grandma very proudly said, “Vitamin O!”

Mom responded, “…what is Vitamin O?”

Grandma said, “Oxygen!”

Well, shortly after this episode, someone in my family marched into the health food store where my grandparents purchased Vitamin O and had some harsh words for the manager selling snake oil to a retired couple just trying to stay their healthiest to care for their kids and grandkids.

In a shocking turn of events, the FTC charged the makers of Vitamin O with making false health claims in 1999.

Here’s the uncomfortable truth we should all be aware of: “Vitamin O” isn’t just a quaint anecdote from the 90s. This kind of thing happens all the time, and older adults are often the target. That makes aging not only a health or family issue, but a financial planning risk.

Aging Is a Financial Planning Risk

As a former Director of our Risk department and current co-Director of our Integrated Planning department, I often consult with our advisors and their clients about how to mitigate risk in the financial plan. I’m thinking about things like: what will break the plan? What introduces instability?

One of the biggest risks is aging. Though aging is a privilege, it comes with significant challenges. The physical, cognitive, and practical vulnerabilities only reveal themselves gradually over time. Many of our client conversations originate because our clients have aging parents and they’re either helping handle caregiving or witnessing subtle cognitive decline. Maybe they’ve had their own “Vitamin O” moment at the breakfast table.

Aging and cognitive decline symptoms look small at first (an odd purchase, a strange phone call, an unusual bill), but it can be an early sign that independence and vulnerability are starting to overlap.

The Risk Is Not Just Care — It’s Vulnerability

The “Vitamin O” saga isn’t an anomaly. Fraud targeting aging adults is common, persistent, and evolving.

I recently came across this article called “Caring for Mom is an Education in Scams and Fraud.” It’s hard to read without shedding a few tears, and it shows how difficult it can be to protect someone from every angle when they try to remain independent. Older adults are often targeted because they may be trusting and polite, reluctant to ask for help, experiencing the early stages of cognitive decline, or relying on savings that fund their daily living needs.

When confronted by potentially risky requests from strangers, many aging parents just think, “I don’t want to be a bother to anybody (least of all my kids).” And the schemes do not always look dramatic or obvious at first.

What Elder Fraud Can Look Like

Fraud against older adults can take many forms, and it does not always come from obvious criminals.

Here’s a quote from the “Caring for Mom” article:

“As hard as I tried to protect my mother from con artists, there is no way I could have predicted all the schemes, both clever and dumb, that industries and individuals constantly perpetrate on the elderly. Some will be strangers; others will be trusted confidantes and family members. Did I mention the beloved attorney who convinced my mother to sign away farm equipment worth nearly $200,000?”

Unfortunately, the list of types of fraud to watch for goes on and on. Here are some examples:

1. The grandparent scam
   1. Fake grandchildren calling to ask for help with car repairs, late rent, a medical emergency, or to post bond.
   2. This has happened in my own family and nearly led to a grandparent sending money to a scammer. They will not avoid pulling on a target’s heartstrings.
2. Professionals who cross the line
   1. In the article about “Caring for Mom…” the author mentions an accountant who cashed a $25,000 check to help “pay the bills” – a service the client’s daughter was already providing.
3. Care-related fraud (specifically in-home care)
   1. This blog references an LTC insurance claim showing 16 hours of home health care per day. When the claims department took a closer look, the receipts submitted were exact duplicates. The care provider was being paid for nonexistent caregiving hours.
   2. I had a conversation about this with someone who was suddenly thrust into caring for an aging family member in another state. Their family member received a bill for four hours of in-home care, but when they asked how long the care provider was actually there, the family member said, “Oh, maybe 15 minutes.”
   3. Overbilling isn’t just anecdotal. The Society of Actuaries confirms that overbilling for services was the second most common type of fraud in LTC claims, after claimants misrepresenting their medical situation to get benefits faster.
   4. This brochure lists more care-related fraud.

This list could go on and on, but here’s the message: if you’re not paying close attention, these things can fly under the radar for years and slowly eat away at the assets being used to provide care in the remaining years of a loved one’s life.

Long-Term Care Planning Is Really Choice Planning

This is where long-term care planning becomes practical. Planning early does not make aging simple, but it can preserve more choices around where care happens, who provides it, who provides oversight, and how much family members have to improvise in a crisis.

These conversations naturally lead to long-term care insurance planning. While many clients can self-fund their long-term care from their portfolios, it’s important to remember that those assets are not just exposed to market risk. They can become vulnerable to poor oversight, fraudulent billing, or bad actors. Long-term care planning, then, focuses on risk mitigation instead of financial plan survivability.

At a minimum, we want our clients to understand what is available in the LTC insurance market, what tradeoffs exist, and whether coverage could preserve the options they value later. And it’s not just a vehicle that helps pay for long-term care expenses. An LTC policy introduces another layer of review around claims and billing, which may help identify issues that family members would otherwise have to catch on their own.

However, the sometimes harsh reality is that if we wait too long to think about long-term care insurance, it can become expensive or unattainable depending on a client’s current medical status.

LTC Tree captures this well:

“The single most common regret we hear from clients is “I wish I’d looked into this five years ago.” There are two reasons for that: premiums rise steadily with age, and the chance of being declined for health reasons climbs just as steadily. Waiting usually means paying more — or losing the option entirely.”

Services that an LTC plan might help you pay for:

1. Help with personal care (bathing, dressing)
2. Modifications to your home (ramps, bars, etc.)
3. Other home care (lawn care, housekeeping, meal support, pet care)

The earlier these conversations happen, the more likely the plan can reflect a person’s actual wishes. At its best, long-term care planning is not just about buying a policy. It is about preserving choices before a crisis forces the issue.

LTC Success Stories

At The Bahnsen Group, we are having more and more long-term care conversations every year. The best outcome usually starts with clients asking questions before an urgent need arises. Here are a few highlights from some recent engagements:

• Last year, I worked with clients who moved overseas for their retirement. They are enjoying life abroad, but they weren’t sure how to plan for future care needs since they were uncertain they’d be back in the United States when a need arises. We helped them secure coverage that will pay benefits whether care is received in the United States or abroad, while they were still young and healthy enough to lock in attractive options.
• I also worked with a client who had enough portfolio assets to self-fund care, but still wanted a dedicated pool of benefits with contractual guarantees. We helped her allocate $240,000 of premium into a policy that will provide access to more than $1,000,000 of long-term care benefits in her 80s.
• In another case, I reviewed an individual’s existing long-term care policy. After several conversations about how the policy worked and what they were experiencing day to day, I suspected they might qualify for benefits. This person lived alone and did not have family nearby to help, and I wanted to make sure they took advantage of the policy they’d been paying into for years. They filed a claim, and soon began receiving benefits to help pay for a home health aide.

The conversations give me conviction that the conversation about long-term care planning works best when they start before the need is obvious.

The Conversation to Have Before Anyone Needs Help

Long-term care insurance is one of the solutions we implement for clients, but the conversation with your loved ones must be broader than just insurance. Undoubtedly, these are the things no one wants to think about, the easiest to punt into the future, but they are the things you should most want to plan for. You do not know when the need for care will arise.

Here’s what you can start thinking about (inspired by all of the above and this brochure):

1. If diagnosed with a life-limiting illness, what matters most: pursuing a longer life, or pursuing a good quality of life?
2. Are there kinds of treatment you do or do not want (resuscitation attempts, ventilation, feeding tube)?
3. Where do you want to receive care if you are no longer able to take care of yourself?
4. Do you expect to stay at home? Do you have family members that would care for you? Have you talked to them about that? Would you prefer to move into an assisted living facility?
5. How important is it for you to be around people/friends your own age?
6. Who are the trusted advisors in your life? Do they know what your plans for aging are? Have they been introduced to the family members/friends/etc. that will help care for you as you age?

A Simple Starting Checklist

Beyond just asking questions, we should also take inventory. If you are caring for an aging loved one, or beginning to think seriously about your own later years, these are some of the best next steps you can take:

1. Make sure you/your loved ones have estate planning documents in place (a will, Power of Attorney, Health Care Directive), that they are up to date and match their wishes, and that they are stored properly.
2. Get a handle on their finances / make sure your finances are in order
   1. Where are the bank accounts? Investment accounts? Who manages those? How often do they/you go to see investment managers/accountants/attorneys/etc.?
3. Make sure they/you have copies of their insurance policies stored properly
4. If long-term care insurance isn’t in the picture yet, have a conversation about it.

Talk to Your Parents, Your Kids, and Your Advisor

I hope the message is clear: it’s never too early to have a conversation about old-age planning with your aging parents or adult children. And it’s also never too early to talk about it with your advisor. Make sure the professionals you trust know what your plans are for the future.

“Vitamin O” is a memorable family story that was relatively harmless as a standalone episode. But the best outcome is to make sure the next warning sign doesn’t become the moment everyone realizes a plan was never put in place. Open the lines of communication while there is still time to protect the independence and choices of you or your loved ones.

Sarah Leitzke
Director, Risk Management

Trevor Cummings
PWA Group Director, Partner

Blaine Carver
Private Wealth Advisor

Brett Bonecutter
Private Wealth Advisor