Post New

Nobody wants to admit to cognitive decline but way too many of us are going to have to deal with it at some point. The question is how? Those of you with kids can just count on one of them taking over the finances at that point (hopefully before the scammers get to it). As we are childless that won't work. We could identify a niece/nephew but I want here to explore whether there are other solutions. I don't need a financial advisor as "sell 1% of my brk each quarter" doesn't require much effort. But while most of our bills are on auto-pay there are still some financial tasks that need a personal touch (e.g. property tax, filing personal taxes, etc). Is there a service that will take on that sort of task? How much trust do we put into that person or service? There used to be a time when the family banker could be tasked with these things but I'm not sure that exists any more. What is an appropriate fee for such a service? Do they have complete POA over our finances? If not, how much do they have? One could imagine setting up a separate bank account and funding it at the beginning of each year with sufficient funds for all those expenses, but I need to be sufficiently compos mentis to actually do that each year. Finding someone you trust sufficiently is the solution but is there a job classification for "trusted personal assistant who won't steal you blind"? Do I set this up early enough that I can keep on eye on things and depend on it still going well 20 years from now when I really have lost it? My spouse is reasonably numerate which means that we both have to descend into innumeracy before it becomes a problem, but it may still happen. Anyone have a solution they like?

Rgds,
HH/Sean

I don't know about the financial supervision, but I can speak to the medical. 1poormom had dementia. It was progressing slowly enough that I didn't really notice. In hindsight, I should have. It had gotten pretty bad by the time I noticed "hey, there's a problem" (e.g. she thought her computer was malfunctioning when the "lines" screensaver started). However, the neurologist noticed it immediately. I'll spare you the story. The neurologist runs a series of tests for cognition, and the results are pretty unambiguous.

So I would recommend seeing a neurologist 1x per year (for each of you). You can't really rely on your own ability to see your dementia, and possibly not your spouse's. But the neurologist will see it.

I think 1poormom had moments when she realized she had a problem, but the rest of the time it was others, not her. "Stupid people!" She said that a lot, even though she was the one who couldn't remember things, was remembering things that never happened, etc. It's probably more merciful that you don't realize your have dementia.

So I would recommend seeing a neurologist 1x per year (for each of you).

I like the idea of setting a baseline now, when (afaik) I don't have any obvious issues.

Rgds,
HH/Sean

Anecodotally, I heard a story about a woman who tested herself regularly. She had to complete a small puzzle she set for herself. Her thought was that when she couldn't do it, she would take action (e.g. move to assisted living or MC). When she couldn't complete it, she also didn't know her plan to move to AL or MC. The problem with the baseline is that you are setting now, and have to remember what it is in the future. A dispassionate 3rd party (e.g. neurologist) can test you regularly, and assess where you are on any given visit.

I suppose you could agree with the doctor on a minimum score before you take some sort of action, and then the doctor can tell you when you've missed that score.

Or you can do as the Count (on TMF previously), and proactively move into a retirement community that offers IL, AL, and MC. He doesn't need it now, but when he does the staff will know and encourage him to the next stage. 1poormom's retirement facility told me when she needed to move to MC because she was needing more attention than they could provide in AL.

Or you can do as the Count (on TMF previously), and proactively move into a retirement community that offers IL, AL, and MC.

My parents did that when they were fully coherent; bought a two-room "condo" in Wesley Acres, a retirement community in Des Moines, IA. That place had a small clinic and a full-up Alzheimers facility on campus. My parents lived there for 20+ years, when Dad declined beyond the facility's ability to take care of him, they moved him into their Alzheimers facility. When Mom went into decline after Dad died, she went into the facility, also.

Eric Hines

My parents did that when they were fully coherent
As did my mom, who stayed relatively sharp until she had a stroke which moved her into AL. But even with all those preparations and "glide path" I still worry about who takes care of the financial part. Great to just depend on kids but if that isn't available what is the alternative?

Rgds,
HH/Sean

...I still worry about who takes care of the financial part.

A legitimate worry.

I suspect you'd have to have an accountant on retainer to do that. Not sure if a financial planner would be sufficient. And a lawyer might not want to handle disbursement of funds.

Otherwise, I believe you would become a ward of the state, and a guardian would be assigned to handle your affairs. That may vary by state, so you would want to contact your state government specifically to ask about how that would be handled.

It's the sole remaining reason I have a fee-only CFP.

I *think* our youngest is on a glide path to have the financial savvy, altruism, mastery of details to take over in a few more years, but not quite yet.

The CFP was valuable, I thought, in the peri-retirement decade - say, R-minus-five to R-plus-five years - but the value-added at this point when the biggest decisions have been made seems marginal at best.

But I was in medicine too long to assume either that dementia will signal its onset in time to do something effective, or that it needs to be dementia at all. A bad-luck metastatic solid tumor can (and does, routinely) randomly take any older adult in 6-24 months from the first symptom, and the proverbial bus or a sudden cardiac event takes no time at all.

Were I you, I guess I'd look into a fee-only CFP. At this point, I'm resigned to the philosophy that they proportionately cost about as much of my income as did my term life insurance premiums during my working years: something to be as sure as possible that Mrs sutton isn't suddenly adrift because I walked into a liquor store at just the wrong moment.

--sutton
who had to teach his mother how to use an ATM when his dad passed

'But I was in medicine too long to assume either that dementia will signal its onset in time to do something effective, or that it needs to be dementia at all. A bad-luck metastatic solid tumor can (and does, routinely) randomly take any older adult in 6-24 months from the first symptom, and the proverbial bus or a sudden cardiac event takes no time at all.'

Thanks sutton. Very Interesting topic which we all need to consider carefully. My father went from a healthy 76yo to passing in only 6 weeks in 2014 from a very aggressive lymphoma. My wife is a 5 year breast ca. survivor (dx at age 42). So I've considered the potential of these issues, yet I have not done too much other than the usual estate planning with life ins., wills, POAs, trusts and the occasional meeting with a free Fidelity CFP who does not manage our assets but only adds commentary and runs scenarios.

When Dad died, my 85yo mother met with the estate planning & wealth management team. They took responsibility of managing half of her assets with not insignificant fees, and the other half was spun off into a family trust (upon Dad's passing) which my brother and I manage.

I am upper 50's and recently entered the draw down phase, but we have not yet thought thru the what ifs of cognitive decline. Dementia is in our family history but usually well into the 9th decade of life, but you just never know. My wife has no real interest or skills wrt investing. I may start with an inquiry to my CFP and/or estate planning attorney for their thoughts as well.

Peace and good health to all!

It's the sole remaining reason I have a fee-only CFP.

This. I suspected there was a reasonable solution but wasn't sure. I know there are lots of performance-based CFPs but that clearly isn't what I want. Given the relative simplicity of our portfolio the fee shouldn't be too onerous.

Thanks for the response!

Rgds,
HH/Sean

My wife has no real interest or skills wrt investing. I may start with an inquiry to my CFP and/or estate planning attorney for their thoughts as well.

Write up instructions for her to move the money from individual stocks & bonds to Vanguard LifeStrategy Moderate Growth Fund (VSMGX). In taxable accounts, gradually to avoid large capital gains tax. In IRAs, just do it ASAP.
Also instructions for her to set up an Automatic Withdrawal Plan, and say what the automatic amount should be.

This isn't a specific recommendation, but perhaps worth considering among other choices for the portion of the problem which is portfolio and withdrawal management.
What can be done to make it so no financial decisions are needed?

When the person in question fails the cognitive test, liquidate the portfolio they intended to live from. Buy one or more annuities with the proceeds.
No further financial decisions to make, no financial planner needed, you just get money in your account every month till you die.

More often than not, cognitive decline becomes a serious problem at a somewhat advanced age.
Annuities are not good "investments" in terms of return on your money, but they do serve a purpose.
The key observation here is that they generally have quite high payouts when purchased at an advanced age, since at that point the insurer's calculation is primarily about life expectancy, not time value of money.

For those who want to leave an estate, just handle that part of the portfolio separately.
Perhaps a portfolio aimed at long run wealth preservation rather than income, like a bunch of long term holds that are never touched.


Another random thought: The charms of TIPS ladders are generally underappreciated.
A lot of people think of them they way they think of bonds, but they are as different from normal bonds as bonds are from equities.
There is perhaps a case to be made that they are a good fit for at least a portion of most retirement portfolios.
And of course, in this context, they represent a portfolio and income strategy with no further investment decisions or actions required.
They don't address longevity risk.

Jim

Post New

US Policy FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.