CategoryRetirement Planning Archives — C. Lynn Northrup, CPA, CPIM
Change starts with a sense of true urgency and in most cases needs to be created to make things happen. The enemy of urgency is complacency. Complacent people don’t look for new opportunities and they pay more attention to their internal feelings than external feelings. They tend to move slow when they need to move fast. What ever worked in the past is what guides them.
While anxiety and fear can drive behavior that might be mistaken for urgency, the resulting actions tend to be non-productive. This is called false urgency resulting from failure. The thought process from a sense of false urgency usually is not productive and proactive. It typically is mindless wheel spinning that creates no positive results.
A true sense of urgency is created and recreated by communicating the existence of great opportunities together with the existing hazards and roadblocks. People engaged in a true sense of urgency exhibit a strong need to move and win, now. The biggest challenge about creating a sense of urgency is taking the first step in initiating the action needed to succeed in a changing world. Real urgency isn’t a natural state of affairs because it needs to continually be created to get change initiatives moving and in the right direction. In a constantly changing world, the good news is that there are an over abundant number of opportunities that can be utilized to create true urgencies.
A true sense of urgency evolves from a set of feelings that creates a compulsive determination to move right now. True urgency is a process of winning the hearts and minds of the people needed to make change happen. Mindless emotion doesn’t get the job done. Winning change strategies utilize sound, ambitious, but logical goals using methods allowing people to experience the feelings that embrace the determination needed to make things happen.
The strategy for producing a true sense of urgency focuses on creating very alert, visibly oriented action, aimed at winning with daily progress toward achieving the vision and goals targeted at core emotional feelings. Here are the four tactics needed to make this strategy successful:
- Reconnect internal reality with external opportunities and obstacles using data, people, video, and other media.
- Avoid acting anxious or angry and always effectively demonstrate your own sense of urgency in meetings, one-on-one interactions and other communication with the people engaged in the change process.
- Take the opportunity to determine if crises can be used to your advantage and always proceed with caution.
- Remove the negative and urgency skeptics and keep the group complacent to avoid destructive negative urgency.
In addition to these four tactics is the necessity of keeping up the pressure to maintain a sense of continued urgency. The trap that can occur is achieving success and then losing your momentum of continuous improvement. Short-term success does not always translate to long-term results.
Here are some thoughts on maintaining urgency after making a successful change. Always be on the alert for potential declines in the sense of urgency. Realize that complacency can set in so be ready with backup solutions to maintain momentum. Take advantage of new developments to apply to change initiatives and improvements. Essentially, building a culture acting with a high sense of urgency will focus on the strategy for producing a true sense of urgency and application of the four tactics that are needed to make a positive change become a constant.
Changing demographics created by baby boomers represent big opportunities for CPAs. There are 10,000 boomers hitting retirement age each day and they need help in a lot of areas. While financial planning is usually the focus, there is an abundance of practice development opportunities.
Here are some shocking statistics. Over 13% of the population in the United States will be 65 by 2020 and more than 16% will be in excess of 65. By 2030, most baby boomers will have hit their 65th birthday. This means that more than one in five Americans will be 65 or older and about 10 million of them will be over age 85.
Money tops the list of problems since boomers haven’t saved enough to retire and survive through their later years. They also aren’t prepared to deal with declining health. Plus, they may have to contend with elder care either for parents or themselves. Combine these challenges with social security, Medicare, Medicaid, and estate planning there are lots of possibilities for added value business. There are a lot more people with questions, no answers, and the need for guidance.
CPAs can help retirees and elders on a wide range of areas. Typically, seniors turn to attorney’s for guidance which makes sense in many areas. However, CPAs educated on the needs of baby boomers and elders can become valuable and needed advisors to a huge segment of the population.
The first step for CPAs is getting up to speed on the issues. The next step is letting people know how you can help them. In addition to CPE programs there are a lot of resources to gain knowledge about elder issues. A good place to start is by gaining expertise on social security, Medicare, and Medicaid.
One of the opportunities for CPAs to help baby boomers is with basic budgeting and cash management. Boomers try to do their own planning and budgeting when objective input from a CPA would be a better option. Most boomers haven’t planned very well. Many will need to, or want to, pursue a business. Helping these boomers get started on the right foot can translate into added value revenue.
A simple budget spread sheet can be a useful tool for CPAs to assist boomers create an understanding of their situation and develop a plan for the future. Consider all possible income streams such as social security, pensions, plus any other sources of revenue. Expenditures should include housing, travel, medical, automobile, and all living expenses that boomers will incur. Most boomers think expenditures will be reduced in retirement. This often is not the case. A good analysis can become the basis for projecting into the future and providing boomers with guidance on possible options.
The budgeting exercise helps provide an independent sense of reality on retirement finances. Most boomers have lived week to week and haven’t saved for retirement. Now they will need advice on how to make it through their aging years. CPAs are a logical source to provide much needed advice on how these seniors can manage their future.
Having additional knowledge to help seniors gives CPAs an edge in developing an elder practice. Here are some thoughts on how to gain the needed knowledge and information. Take CPE on estate planning tools. This will give you a foundation on the basics of wills, trusts, and powers of attorney. You can use these tools to help these seniors manage their affairs. You need to have signed powers of attorney for business and medical reasons in case these people can’t manage their own affairs. If you are advising boomers on carrying for elder parents, having these documents in place is essential and critical.
Most boomers don’t think about elder care and what it entails. CPAs who understand the complexities of assisted living facilities and nursing homes can provide much needed support to seniors. Take the time to learn about assisted living facilities, nursing homes, and other senior housing possibilities. I learned about these issues because of the need to deal with aging parents and in-laws. Usually these areas aren’t addressed in depth until it becomes a necessity.
Many boomers who are suddenly faced with caring for aging parents have lots of questions and need assistance. CPAs can provide useful guidance by being knowledgeable on the various facets of senior housing and care. There are a variety of options for seniors, including ways to keep them in their home as long as possible. By understanding the array of possibilities will put you in position to offer solid guidance.
Most of the questions raised by boomers will be directed to assisted living facilities and nursing homes. I think the best way to gain knowledge about them is to visit and take a tour. These organizations will inform you on their billing structure and other financial information. During your tour make an effort to observe the quality of the staff, the rooms, and the food. Another consideration is the capability of the medical staff. Finally, take note of the variety of activities and transportation options available to residents.
When visiting nursing homes it is essential to realize that they provide skilled care which is a big difference from assisted living facilities. Also, determine if they accepts Medicaid since not all of them provide this option. This can become a big issue when elders run out of money and need to be moved. Most assisted living facilities have special areas to care for dementia and Alzheimer residents called memory care units allowing residents to stay until the end.
Gaining knowledge of senior housing facilities can also become a great networking and marketing opportunity as these organizations are happy to know of available resources for their residents. CPAs who understand elder care and associated issues represent a valuable and needed resource.
CPAs who understand the shifting demographics can position themselves to provide significant added value assistance to a segment of the population that needs all the help it can get. While it will take some time to gain the necessary knowledge and market it, I encourage CPAs to step up and fill the need. Seniors need your help.
Before you can develop a meaningful plan for elder care you need to carefully assess each situation. The assessment should begin with opening up the lines of communication with your elders. They may not want to talk about it, but it is essential. Without effective and honest communication there can be no assessment and no plan. Family dynamics are frequently difficult at best. The best approach is to listen carefully to your elder’s thoughts and ideas and with no preconceived notions or ideas. Start with a clean canvas and attempt to come up with viable and workable solutions that best fits their situation. In addition to your elders, the lines of communication need to include other family members because they need to be on board and in agreement with the planning process.
When dealing with older people try and maximize their ability to make choices for as long as possible. This gets to be a fine line and you’ll have to tread carefully. My experience is that you will clearly know when it is time to take over certain responsibilities. Before you can really start to develop an effective plan, you need to make an assessment of your elder’s situation which should include health, money, housing, transportation, and their social network. Your planning should be focused on minimizing crisis situations and reducing confusion. Good planning helps to avoid these situations.
Your initial assessment should include gathering essential information on the support network used by your elder. The list should include the names and phone numbers of the key services and support system that will be needed and utilized. Some things that should be considered include doctors, pharmacy and medications, insurance agent, bank information and contacts, repair services, friends and neighbors, and any one that will be interacting with your elder.
Each person’s situation is unique. I think the planning process needs to start with health and an elder’s ability to take care of their day to day living needs and hygiene in a safe manner. You will want to talk with your elder’s doctor, any therapists, and even their neighbors. This may seem like spying but getting objective input from people who have observed your elder is critical. Knowing and understanding a person’s ability to drive, cook, and maintain living quarters is a must in making an assessment and developing a meaningful plan for them.
The next step after gathering this first set of information is to evaluate housing. Look at the exterior and interior lighting, the existence of stairs and determine if they are safe. Also, check the location of the home relative to shopping or medical services. Is the house in poor repair, cluttered or untidy? Does the home have wheelchair accessibility? Your goal is to evaluate whether or not your elder is truly capable of living in the home that is safe and in maintaining their own individual safety.
This is an excerpt from my book, Navigating Retirement and the Challenges of Aging which covers a complete range of issues facing our aging population. The key is effective planning for elder care and the retirement phase of life.
There are five key things that seniors need to know as they prepare for their retirement and the later phases of their life. The problem is they may think about these issues but fail to get the help they need as they approach their 65th birthday. My e-book Navigating Retirement and the Challenges of Aging provides these answers:
- What am I going to do and where?
- Social Security?
- Health Care?
- Caring for Elders?
These critical issues need to be addressed well before reaching the age of 65 and should become part of a regular planning effort. Dealing with these issues head on is essential because delaying just makes things more difficult.
Everyone needs to understand where the money will come from and think about what could happen if it isn’t enough. Itemize your assets and liabilities then determine the cash inflows and the cash outflow. It is pretty tough to plan until you get these answers. If you don’t like the answers, you need to come up with a plan on how to make things work.
What and Where
The next question deals with what are you going to do after you stop working. Depending on your retirement vision (or reality), you need to decide where you will live. These are big questions and will require change and adjustments.
So you will be eligible for social security. When do you start drawing it and are there ways you can maximize your benefit? Navigating Retirement has an entire chapter devoted to the best strategies for getting the most out of your social security.
Maintaining good health as you age is critical and having good health insurance is essential. Medicare kicks in at age 65 and but it doesn’t cover everything. It is essential to register for coverage with Social Security three month before you turn 65. Failure to do so could result in penalties. Navigating Retirement explains what you need to do, when, and health care coverage options. The book also explains typical health issues that seniors encounter.
Caring for Elders
What if suddenly you need to help care for one of your parents, your spouse, or another loved one? This is an area where seniors are not well prepared. However, caring for a loved one can suddenly become a reality. Again, Navigating Retirement provides you with the essential information to address these questions. More and more seniors are coping with the challenge of caring for a loved especially as Alzheimer’s and dementia strike our loved ones.
These are only five of many issues and questions that senior are facing. They need answers and my goal with Navigating Retirement and the Challenges of Aging was to provide them with simple and straight forward guidance.
Aging and retirement is supposed to be the time to relax and enjoy after the result of years of hard work. Don’t we wish it were that easy? Even if you are one of the lucky ones who planned and saved in addition to having a plush retirement pension, don’t think you’re out of the woods. The best way to deal with these challenges is to create a vision for your retirement.
This process isn’t easy, but it will pay off. Here is what I want you to do. Commit your retirement decision process to writing since it will make you think more clearly and improve your chances for success. Develop a vision of what you want or plan to do in your retirement years.
Here is a checklist of seven things to consider. Begin thinking about each of these questions and it will help you create your unique retirement vision. Start your thinking process and begin the process of creating your vision.
- What are your hobbies and what will be your fun activities in retirement?
- Will you need to continue working or make a career change?
- Where would you like to live (geographically)?
- What are your housing requirements?
- What is your state of health and are there any issues?
- Have you planned your retirement finances?
- Have you considered the need to provide eldercare giving?
First, write down answers or thoughts for each of these questions. It will start you to think about things that had not previously entered your mind. Your thoughts will shift and change. These changes are normal. I have provided a decision guide in the appendix, which will help you through the process of developing a good retirement vision.
Having fun in retirement and hobbies should be the easiest part of the vision process. Everyone has dreams about what to do in their leisure time. In some cases, the things you would like to do will take precedent over the things you have been doing. It may be golf, gardening, or travel. Maybe it will be a combination of a number of things. Things you wanted to do but you have put off because of work.
Some people have dreamed about pursuing a hobby when they get to retirement. The difficulty is that dreams and reality don’t always mix. What they imagined things to be turn out to be different. After a person has worked for a long time at his profession, it is tough to turn off the switch. They find that they have a tough time leaving the work routine. This is something to consider in your planning process.
For baby boomers getting ready to retire or change their life, this is an essential step. Going through the process of thinking about the future will pay big dividends. I think these seven steps will help clarify your thinking and planning.