The Four Transitions of Aging

February 1st, 2019

By  Steve Gresham

Anna (not her real name) was a wonderful neighbor—considerate, funny and energetic despite her age. Then she ran over a 42-year-old father of three as he jogged along the main road in our town. The cops at the scene were speechless when the demure grandmother turned into Mr. Hyde.

“My daughter will be happy now,” said Anna. “She’s been trying to take the car keys away from me for years!” There was no compassion for the victim, who nearly died. Gone was the kindness that defined most of Anna’s adult life. Just a couple of years earlier, she would not have recognized what she had become.

This was not Anna’s first accident. It was her third. She was soon a defendant in a civil action, lost her savings, lost her car, lost her driver’s license—and the respect of friends and family. And she never stopped complaining about losing the ability to drive. She lived her final days in an apartment off the back of her daughter’s home.

Aging can be a mean Rubik’s Cube, in which several different sides of your life are turning simultaneously. Good genes might give you longevity but increase the cost of living in retirement. Two spouses typically don’t age equally well. Family might be nearby to offer help, or not. Relatives can be a godsend or become unexpected dependents. And just when you think a situation is stable, aging plays mean tricks and upsets the most carefully laid plans. Anna at 86 was a lovable friend and neighbor. At 88, she was an incompetent driver afraid of losing her independence. Her family was initially “surprised,” but not really.

The greatest value provided to clients by financial advisors is “behavior modification.” We help people make better decisions by using data more than emotion and provide perspective from our experience. For investing, that often means injecting common sense—"stay the course, don’t panic.” But nowhere do we earn our fee more than when we are helping people with the four transitions of aging: where you live, your health care, how you make financial decisions and how you get around. This is the commonsense foundation of a real retirement plan.

Transition No. 1: Health Care

Your clients are also patients with specific opinions, preferences and fears about medical care. They all have their own vision of how they’d like to be treated, by whom and where. Where and how are you capturing these preferences? This isn’t about being the medical proxy—that’s farther down the road. The most common disconnect I’ve noted over the years is the range of opinion about what Mom “should” do instead of what Mom actually wants to do. And no one had discussed it, so now it’s a battle.

Transition No. 2: Financial Decisions

Cognitive skill with numbers peaks—on average—when somebody is 53 years of age. The average age of wealth management clients is 65. Most of the industry’s clients are on the downward slope of their ability to accurately analyze the data you give them and make good decisions. Adding to the challenge: 12% of people aged 65 and older currently suffer from some stage of Alzheimer’s disease and a greater number have other cognitive disorders. The Financial Industry Regulatory Authority says that advisors must make reasonable efforts to find a trusted contact and many states are weighing policies to protect seniors. But how do you or your clients know if they are beginning to lose their ability to make good decisions and if they are vulnerable to fraudsters? Remember: Clients are OK until they aren’t.

Transition No. 3: Living and Lifestyle

Many couples experience retirement in three stages—a peppy first stage enjoyed by both partners, a second stage when one of the two is ill or impaired, and a third lived by a surviving spouse. Very few folks stay in the same place through all three stages—and seldom at the level they had hoped to enjoy (there’s no going to the golf course). Don’t assume there is room at the inn. One of the great surprises to many adult children is the lack of openings in good assisted living centers. My mother-in-law needed hers before the building was finished. My father bought just in time to have a bed when his pancreatic cancer was diagnosed. So where will they live—and next, and next?

Transition No. 4: Transportation

The best for last. Even the most prepared professionals admit that the car is a bloody battleground when you’re doing age-related planning and one of the most difficult things to do is confiscate the car keys. When a person’s independence is slipping away, the car represents his or her freedom, the same way it does to a 16-year-old with a new license. This is a dangerous and increasingly tragic situation when an older person’s skills are deteriorating. That 4,000-plus pound machine can be a lethal weapon. Doctors are supposed to confiscate the licenses of anyone they deem unfit to drive. And most don’t. Some states have real screens for competency, but most don’t. Actually, that word, “incompetence,” says it all, right? Who wants to hear that? One of my dear friends passed away in December battling Parkinson’s and ovarian cancer. Her mantra: “I will drive till I die.” Hmmm.

I will dig into each of these four transitions in the next few columns. The challenge of each are rooted in a person’s “ability”—and your ability to plan for the loss of something a client is doing now. Older people fear their loss of independence far more than death. Being dependent on other people just to get through your day is demoralizing, then frightening. The psychological impact of aging is one of loss—you gradually lose the ability to do things you like to do as well as people you know. Unless you engage in new activities and find new friends, aging is a slowly declining one-way street. Preparation can make a world of difference.    

Steve Gresham chairs the advisory board for Cogniscient Inc., the parent of Whealthcare Planning. He is also former head of the private client group at Fidelity Investments and author of The New Advisor for Life.