NATIONAL ALLIANCE FOR CAREGIVING

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National Alliance for Caregivingin collaboration with the

General Federation of Women's Clubs,Business and Professional Women/USA, and

the Employee Assistance Professionals Association

National Alliance for Caregiving4720 Montgomery Lane, Suite 642

Bethesda, MD 20814-3425www.caregiving.org

(c) 1999

Consultants

John Migliaccio, Ph.D. Maturity Mark Services

Neal E. Cutler, Ph.D. The Joseph E. Boettner/Davis W. Gregg Chair of Financial Gerontology

Widener University

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PART ONE — CAREGIVING FOR YOUR OLDER RELATIVE

Introduction ...................................................................................................................................

Caregiving's Challenge .................................................................................................................Health Issues ...................................................................................................................Medicaid vs. Medicare .................................................................................................Disease-Specific Information ........................................................................................Basic Care ........................................................................................................................Medication Management ...............................................................................................Legal Documents ..........................................................................................................Caregiver Stress ............................................................................................................ Balancing Work and Caregiving ................................................................................

Options for Senior Living .........................................................................................................Aging in Your Own Home ..........................................................................................Bringing Aging Services into the Home ...................................................................Adult Day Services ....................................................................................................... Assisted Living: The Rental vs. Condo Models ....................................................... Nursing Homes vs. Assisted Living and Other Housing/Care Options....................

Options for Long-Term Care Financing ................................................................................ Other Ways of Paying for Long-Term Care .............................................................

PART TWO — PLANNING FOR YOUR OWN LONG-TERM CARE

General Health and Financial Topics .................................................................................... Medicare vs. Social Security Eligibility..................................................................... Disability Insurance vs. Life Insurance .................................................................... Life Insurance: Term vs. Investment-based Insurance ..........................................

Basic Financial Planning for Later Life ................................................................................Financial Planning Stages to Know and Understand ............................................ Defined Benefit vs. Defined Contribution Pensions ............................................... Pension Rights of Spouses and Surviving Spouses .............................................Retirement, Early Retirement, and Health Insurance ............................................. Saving and Investing for Retirement ....................................................................... Long-Term Care Insurance: The Basics .................................................................... Harvesting Your Retirement Investments .................................................................

Choosing and Using Professional Financial Advisors..........................................................

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IInnttrroodduucctt iioonnThe United States is undergoing whatmany experts refer to as a longevityrevolution. Not only are people livinglonger now than in the year 1900, weare living longer in old age. For example, in 1940 there was about a 7%chance that a 65-year-old would live toage 90. By the year 2000, the estimatecould more than triple to 26%1.

But living longer does not always meanliving healthier. One of the increasingly important — but less recognized — consequences of thelongevity revolution is the change inthe need for long-term care. Many people reading and using this guide arefamily caregivers. Others anticipatebecoming caregivers of an older relativein the near future. Almost 80% of allthe care provided to older people is“informal," that is, provided by familymembers or other unpaid volunteercaregivers in the home rather than bycaregiving professionals or institutions2.Benefit programs for those over 65,such as Medicare, provide very little financial assistance for long-term care,especially in the home. This is part ofthe reason why family caregivers stepin when needed, often providing multiple care services for a much longerperiod than they anticipated.

There's another important aspect ofcaregiving: While you are providingcare for others, you should also bepreparing for your own future health,financial, and long-term care needs.We've all heard of the “sandwich

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generation." Whether or not you aretruly sandwiched between taking careof both young children and aging parents, or are only providing care foran older person, you still have the jointresponsibility for the elders — and foryourself. Over the past few years, theNational Alliance for Caregiving (the“Alliance”) has conducted severalnational studies of caregivers and caregiving. One of the major findingsis that caregivers desire information, education, and resources on the financial and health aspects of caregiving. Equally important, caregivers need and want informationto help them plan for their own futureneeds in the areas of finance and long-term care.

The aim of this resource guide for care-givers is to introduce you to a broadarray of subjects that can be helpful toyou as a caregiver. In preparation for this guide, the Allianceconducted a Baby Boomer women caregivers' survey and then held aseries of focus groups with members ofthe General Federation of Women'sClubs, the Business and ProfessionalWomen/USA, and the EmployeeAssistance Professionals Association —its partner organizations for thisproject. In response to the survey and the focus group requests, wedeveloped the guide in two parts. Thefirst part of the guide covers areaswhich can help you as caregiver of others, while Part Two concentrates onhelping you in planning for your own

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concerns their medical history, immediate medical problems, prescriptions and over-the-countermedications, and probable course of chronic illnesses.

The best place to start gathering information is with the care recipient'shealth care professionals — doctors, specialists, nurses, and pharmacists —who are currently providing health careservices. Very often, they have gathereda full medical history as part of theirtreatment of your loved one and can fillin any information gaps you may have,and vice versa. Once you obtain thebasic information (e.g., name, address,phone number), it's advisable to organize this information in one placethat is easily accessible to you andother caregivers. If you're not familiarwith these health providers, they areoften identified on insurance invoices,Medicare bills, and other documents.

Once you have identified the healthproviders treating your relative, contact them and let them know youare involved with their patient.Important questions to ask include:

- What are the specific conditions or diseases for which they are providingtreatment, including the current statusof treatment, and prognosis for recovery or improvement? How longhas the treatment been provided, andhow long is it expected to continue?

- What are the implications of the condition for the lifestyle of the carerecipient and the caregiver? Is it an

future needs. In this guide, we provideyou with a basic introduction to eachsubject, show its connection to othertopics and to caregiving tasks, andidentify key resources where you canturn for further study and information.Caregiving and planning for your ownneeds are difficult tasks. This guide canbe a valuable tool to assist you in bothareas.

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Caregiving for an older relative, spouse,or other loved one usually starts for ahealth-related reason, whether from acrisis or the worsening of a chroniccondition. Some of the most commonhealth problems for people over 65include arthritis, high blood pressure,heart disease, hearing impairments,cataracts, and mobility problems. Anyone of these health conditions can create difficulty for an older person performing everyday activities such aswalking, bathing, eating, dressing andother normal daily tasks which definetheir ability to live independently.When they require assistance with these“Activities of Daily Living" (ADLs), aspouse, relative, or friend usually stepsin to assist by providing care themselves, arranging for care, or both.

Every caregiver wants to be able to provide as much care as possible, andoften steps into an emergency situation.Regardless of the circumstances, onevital piece of information you need toknow is the health status of your lovedone. The important information

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acute condition (a serious short-termcondition) that will respond to immediate treatment, or is it a chroniccondition (one that recurs frequentlyover a long period of time) that willrequire ongoing long-term care?

- What are the medications being prescribed, including dosage and schedule?

- What are sources of information andassistance regarding the condition being treated?

Even with these resources, however, itis often up to the caregiver to take anadvocacy role for the care recipientwith medical professionals, hospitals, orservice providers. Physicians sometimesdo not notice changes in the patientbecause of their intermittent contactwith them. Or, they may miss distinguishing Alzheimer’s Disease fromother medically treatable forms ofdementia. Find out if there is a geriatrician or a Geriatric AssessmentClinic nearby offering specialized diagnoses and services. The best entryto such a clinic is through the older person’s general practitioner. If thepatient belongs to a HealthMaintenance Organization, there maybe geriatric specialists within the groupaffiliated with the HMO. Pursue yourquestions and concerns with everyagency or professional until you aresatisfied with the answers (if necessary,be prepared to advocate with the carerecipient's health care system for all theservices they offer).

Many problems of old age are not natural or inevitable consequences ofthe aging process, even if they are associated with advanced age, andmany of these problems can be dealtwith if discovered early. With this basicinformation you should be able todevelop a realistic assessment of thehealth issues facing the person you arecaring for, and have a better understanding of the caregiving responsibilities you are facing.

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Medicare is the national health insurance program for older (age 65+)Americans, paying for doctors' bills andassociated services, and hospital andhospitalization services. All older menand women who are part of the SocialSecurity system, no matter what theirincome or the size of their SocialSecurity retirement benefit, are eligiblefor Medicare.

Medicare does not pay for the typical long-term care support services most people need. By contrast,Medicaid is a joint state-federal healthinsurance program for low-income people of all ages. For older people whodo require chronic long-term nursinghome residence and who have depletedtheir financial resources, Medicaid maypay the nursing home bills. Generally,this payment comes only after it hasbeen certified that the older person doesnot have “sufficient" financial resources (usually less than $2,000). Because eachof the 50 States administers its ownMedicaid program, the rules and

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definitions of what are “sufficiently"low financial resources vary from stateto state — as do the level of servicesprovided and the amounts paid byMedicaid. Be sure to find out the eligibility rules in your older relative'sstate. Medicaid also has very strict“spend down" requirements, often specifying how and when assets can bedisposed of before Medicaid eligibilitybegins — in many cases, it can be aslong as 2-3 years.

FURTHER INFORMATION: - Basic elements of the Medicare program, its costs, lists of medical andhealth services that are covered andthose that are not, can be found in theupdated Medicare and You publication.This booklet describing basic Medicarerights and benefits is available inlibraries, Social Security offices, mosthospitals, and from the Medicare website: www.medicare.gov/pubs. The website offers an enormous amount ofgeneral and detailed information, aswell as links to dozens of other governmental and informational websites relevant to elder health, healthcosts, and Medicare.

- Comprehensive Medicaid informationand guidance is available onwww.hcfa.gov/medicaid. The site provides detailed information on eligibility, services available, and state-specific differences for childhealth, elders, and services in general.A separate collection of informationdirectly relevant to Medicaid supportfor long-term care services is alsoavailable:

www.hcfa.gov/medicaid/ltchomep.htm.

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When asked what the most valuablepiece of information they have obtainedis, many caregivers cite informationabout the care recipient's disease, suchas what to expect, the stages of the disease, and how to care for someonewith the disease. Of course, each caregiving situation is different, andyou must be sensitive to the care recipient's specific needs. Althoughcaregivers are as diverse a group asthose they care for, there are somecommon guidelines to follow in orderto promote well-being, such as dailyexercise, proper nutrition, and self-education (as these apply to individualsituations). The following resourcesmay help you learn about the assistanceavailable for specific diseases/conditions:

The National Health Information Center(NHIC) provides central health information referral services for consumers and professionals using adatabase of over 1,400 national associations, government agencies andother organizations. 800-336-4797

Healthfinder is an Internet site thatlinks consumers and professionals tohealth and human services information.This site includes 4,000 resources on1,000 topics which include aging, AIDS,cancer, heart disease, Medicare andMedicaid. www.healthfinder.gov.

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The Wellness Interactive Network is ahealth resource directory with healthcare topics such as disease managementand prevention, advice on nutrition andexercise, and a drug information database. www.stayhealthy.com.

The Alzheimer's Association is a voluntary organization that sponsorspublic education programs and offerssupportive services to patient and families who are coping withAlzheimer's disease. 800-272-3900919 N. Michigan Ave., Ste. 1100,Chicago, IL 60611. www.alz.org

The American Cancer Society has localunits which sponsor a wide range ofservices for cancer patients and theirfamilies, including self-help groups, transportation, programs and limitedfinancial aid. 800-227-2345 1599Clifton Rd., NE, Atlanta, GA 30329www.cancer.org.

The American Diabetes Associationworks to educate the public torecognize the warning signs of diabetesand to realize the importance of prompttreatment. The toll-free telephone service will provide information aboutdiagnosis and treatment of diabetes andabout resources available to people withthe disease. 800-342-2383 1660 DukeSt., Alexandria, VA 22314 www.diabetes.org.

The American Heart Association (AHA)distributes public education materialson the prevention and control of diseases of the heart and circulatorysystem. The AHA distributes a numberof pamphlets for older adults including:

“After A Heart Attack" and “How YouCan Help Your Doctor Treat Your HighBlood Pressure." 800-242-8721 (call fornearest mailing address) www.americanheart.org.

The Arthritis Foundation has chaptersnationwide that offer health educationprograms, self-help courses, exerciseprograms, support groups, publicforums, and more. Local chapters provide general information and referralservices. 800-283-7800 1330 W.Peachtree St., Atlanta, GA 30309www.arthritis.org.

The National Hospice Organizationoperates a toll-free hospice referral linefor terminally ill people. Individuals cancontact NHO to learn about hospice services in their area. Materials areavailable on request. 800-658-88981901 N. Moore St., Ste. 901, Arlington,VA 22209 www.nho.org.

The National Multiple Sclerosis Societyprovides a wide range of services in theareas of education, information andreferral, counseling, and public policy development and advocacy. 800-344-4867 733 3rd Ave., 6th Fl., NY, NY10017 www.dcwnmss.org.

The National Osteoporosis Foundationdistributes information about osteoporosis to people with the condition, their families, the generalpublic, and health professionals. NOFoffers continuing education programsand funds research. Newsletters areavailable. A list of materials is availableon request. 202-463-7002 1232 22ndSt, NW, Washington, DC 20037www.nof.org.

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Parkinson's Disease Foundation provides background literature, exercisematerials, a quarterly newsletter, personal responses to written inquiries,and a physician referral service. 800-457-6676 710 W. 168th St., NY, NY10032 www.pdf.org.

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Caregivers provide a wide range of careto their care recipients. After disease-specific information, the NationalAlliance for Caregiving (NAC) surveyand focus groups most requested information about basic care. Basic caremay include information on feeding,bathing, keeping care recipients comfortable or helping them movearound.

Although there is no single nationaltraining network, a variety of organizations and agencies provideeducation and training for caregivers.It may seem overwhelming for youeven to contemplate finding the timefor a training program, but some agencies offer respite (short-term relieffor the caregiver of a frail person) orother programs to help you get training.Below are resources that can help caregivers to find education and/ortraining that can meet their needs.Please be advised that this is not acomplete list. The Area Agency onAging (AAA) in your county should beable to provide further information, ifneeded.

FURTHER INFORMATION:AARP sponsors educational programs atsome local chapters. Local chapters arelisted in the telephone directory or canbe found by calling them directly.Publication lists are available uponrequest. 202-434-2277 601 E. St.,NW, Washington, DC 20049www.aarp.org.

The federal Administration on Aging(AOA) offers programs to older peopleand their families in order to help meettheir social and human service needs.The programs are offered through thenationwide network of Area Agencieson Aging (see below). Older people andtheir families can participate in a rangeof AOA supported services at the stateand local levels including education,transportation, senior centers, andhomemaker services. A list of publications is available upon request:AOA, Department of Health and HumanServices, 330 Independence Ave., SW,Washington, DC 20201 www.aoa.dhhs.gov.

The Eldercare Locator is a toll-freenumber, funded by the FederalGovernment, that provides the numbers to the nearest AAA or otheraging services organization in the zipcode where an older person lives. 800-677-1116. AAAs are aging offices inevery county or multicounty area whereolder persons, their families, caregiversor anyone concerned about the welfareof an older person can obtain information on basic care and othertopics as well as referral to services andbenefits in their community. AAAs arelisted in the telephone directory under

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the city or county government heading.

Children of Aging Parents (CAPS) provides information and emotionalsupport to caregivers of older people.CAPS serves as a national clearinghouse for information onresources and issues dealing with olderpeople, especially support groups.Caregivers nationwide can contact theinformation and referral service to learnabout local resources and programs.CAPS produces and distributes literaturefor caregivers. 800-227-7294 1609Woodbourne Rd., Ste. 302A, Levittown,PA 19057 www.careguide.net.

National Family Caregivers Associationoffers a website and newsletter andallows caregivers to share experiences.800-896-3650 10605 Concord St., Ste.501, Kensington, MD 20895 www. nfcares.org.

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Consumers have never had as muchaccess to medications, especially over-the-counter (OTC) medications, as theyhave today. For many reasons, there isa new “era of self-medication" withmany OTC medications now availablewhich were formerly only availablethrough prescription. This has helpedreduce health care costs, but has alsoled to problems due to self-medication.Older adults report two to three minorchronic health problems, very oftentreated with over-the-counter medications. While both prescriptionand non-prescription medications aregenerally safe and effective, when

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multiple medications are taken, as isoften the case for older people, there isan increased likelihood of side effects ordrug interactions that can cause additional health problems. In fact, thisis one of the leading concerns thatcaregivers should be aware of. Gettingmedication regimens under control isnot difficult, but usually requires some“detective" work by the caregiver, andconsultation with a doctor.

Among the things to do are:

- Read all labels and directions for use,and all precautions and warnings forany medicine being used.

- Follow directions for use carefully,especially any special instructions onhow to take the medication, or aboutother medications or foods to avoid.

- Get a current list of all medicationsbeing used. Check medicine cabinets,bedrooms, and kitchen cabinets whereprescription and OTC medicines mightbe stored.

- Inform all health providers aboutmedications being used, and keep a listof current medications handy for office visits to physicians, pharmacists,dentists, clinics, etc.

- Check medicine cabinets twice a year.Discard any expired medications, thosenot in their original container, andthose no longer being used. One sureway to discard them is to flush themdown the toilet.

- The bathroom cabinet may not be thebest place for medications, which

and financial matters. Another type ofDPOA is the Durable Power of Attorneyfor Health Care, or “health care proxy"allowing the designated agent to makemedical decisions on behalf of the carerecipient.

Other important legal documentsinclude a valid will, an AdvanceDirective, and a Living Will. Advance directives specify treatments and medical procedures the care recipientprefers, while living wills specify medical care procedures in the event ofa terminal illness or condition. Thesedocuments should be in the possessionof the caregiver, with copies availablefor the physician, health institution, andfamily attorney.

Attorneys with specialized legal knowledge in the field of aging,advanced estate planning, and elder lawcan be located by contacting theNational Academy of Elder LawAttorneys in Tucson, AZ (602-881-4005), or your local or state bar association lawyer referral service.

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Family caregivers are subject to stressfrom a variety of sources — physical,emotional and financial. Although wehear a great deal about its negativeeffects, stress is a normal part of dailylife. In fact, some stress is necessary for motivating us to act. However, toomuch stress can be detrimental to effective problem solving and eventually to our health and well-being.This is especially true in a caregiving

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usually require a cool, dry location. Besure medicines needing refrigeration arestored properly.

- If you have questions, take the medicines to a doctor, pharmacist, orother health professional for information and assistance.

For further information about medication management you can contact:

American Society of ConsultantPharmacists. 703-739-1316 1321Duke St., Alexandria, VA 22314www.ascpfoundation.org.

Consumer Healthcare ProductsAssociation 202-429-9260 1150Connecticut Ave., NW, Ste., 1200Washington, DC 20036 www.chpa-info.org.

United Seniors Health Cooperative (202)479-6973 409 Third St, SW, Ste 200,Washington, DC 20024 www.ushc-online.org.

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Sometimes caregiving involves legalissues related to the older person's“incapacity" (inability to care for himor herself) or “incompetence" (inabilityto understand the consequences ofhis/her actions). Getting legal assistancefor completing some needed documentscan ease the caregiving burden. Thesedocuments include a Durable Power ofAttorney (DPOA) designating a personwho can make decisions and act onbehalf of the care recipient in property

- Community services for both older people and caregivers: contact areaagencies on aging, home health, orrespite service providers.

- Governmental and benefit programs:determine Medicare/Medicaid coverage,long-term care insurance benefits.

First, determine how quickly you mustact, what resources are available to you,and what information you need to dealwith the immediate situation. Gainingsome level of control over a crisis bystabilizing the caregiving situation andyour own feelings and taking someaction to resolve the crisis will all serveto reduce your stress.

Second, realize that you are not alone,and that there are resources to helpyou. It's quite normal to have conflicting feelings — guilt, denial, andeven anger. By sharing your feelings,thoughts and concerns with others youcan establish some areas of emotionalsupport for yourself.

Third, take care of yourself, both physically and emotionally. It is especially important to remember thatwe get no formal training or preparation for being an adult caregiverfor an older loved one, so don't be toohard on yourself — there is enoughstress on you already!

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The emotional and physical effects ofstress can creep up on everyone. Beaware of the signs and symptoms ofstress in yourself and with other caregivers so that you can seek some

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crisis. Under these circumstances, youmay feel helpless and not know whereto turn for help, or even what resourcesare available to assist you and yourloved one.

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How can you deal with the stress of acaregiving crisis? First, assess the situation realistically.

· Is the crisis immediate or an impending one in the near future?

· What are the circumstances contributing to your sense of crisis?

· What immediate support resources —family members, neighbors, friends whohave experienced similar situations orfeelings — are available to you?

One of the most effective responses tothe stress of a crisis is to act to regaincontrol of the situation.

Regaining control, reducing your stresslevel, and reacting effectively to a crisiscan be as simple as gathering the information necessary to make sounddecisions. This information includes:

- Health data: know medical history,prescriptions, medications; understandthe immediate and long-term medical problems of the person you're caringfor.

- Financial and legal information: know health and other insurance coverage; obtain power of attorney (ifappropriate) and/or advance medicaldirectives.

relief when you or they need it.

Typical warning signs of stress include:

- Reduced attention span and concentration

- Reduced effectiveness at work or at home.

- Unusual or frequent memory lapses.

- Clear thinking and information processing are affected.

- Constant irritability, or dulled emotions.

- Physical aches and pains, irregular heartbeat, sweating, skin rashes, and/or stomach problems.

- Avoiding regular activities.

- Sleeplessness.

If you regularly experience any ofthese, stress may be catching up withyou, and you should seek help, or besure to have some ways of coping withthe stress of caregiving. When caregivers experience stress veryintensely, or over long periods of time,they may suffer from “burnout."Burnout - neglecting your own needs tothe point where you become sofatigued, malnourished, or emotionally overburdened that you can no longercontinue caregiving — is harmful notonly to yourself, but to your loved onesas well.

There are a variety of ways to providesome quick relief for stress. Sometimesjust taking a deep breath or “countingto ten" will relieve the immediate stressyou are experiencing and allow you to continue responding to a stressful

situation more calmly and effectively.Mild exercise — a walk, swim, yogaexercises — can also quickly reduceyour stress level. Sometimes, a personal“affirmation" (a statement or personalreminder of a positive personal characteristic or coping capacity youhave), such as the famous AlcoholicsAnonymous reminder “One day at atime," is sufficient to reduce stress andremind yourself that you can make itthrough this day despite its difficultiesand challenges. Get someone to giveyou a break and take some time off forsomething you love to do — a movie; arelaxing long, hot bath; reading a book;having your hair done.

If you feel that constant stress hasbrought you to the point of burnout,professional help may be necessary, foryour sake as well as the sake of thoseyou love. If you suspect that caregivingis affecting your physical or mentalhealth, see your physician or otherhealth professional who can suggestways to help you cope with the stressyou're experiencing. Local caregiversupport groups can also be very helpful,as well as caregiver respite programswhich can relieve you of your caregiving activities for short periods oftime.

Whatever your method of choice forreducing stress, the most importantthing to remember is that taking care ofyourself is just as important as takingcare of those you love.

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What would you do if you were forcedto choose between your job and yourfamily? Every day caregivers are askedto do just that, often facing difficultchoices about whom or what to sacrifice for the sake of the other.Sixty-four percent of caregivers workfull or part-time. There is no magicformula for what is most important, orwhat will work for you in making thatdecision, but the advice from workingcaregivers is that it is almost impossibleto “have it all." The reality is that youmust be prepared to face the necessary tradeoffs of balancing sometimes competing demands on your physical,emotional, and sometimes financialresources.

Decide what’s most important to you — determine your life goals. Then look atwhat achieving those goals will require.The experts recommend that you beabsolutely honest with yourself aboutwhat it will take to accomplish yourgoals. Next, talk about this with yourspouse, family, and the person you'reproviding care for. Understanding thework demands you face is an importantpart for all of them. Next, discuss yoursituation with your boss (if you haveyour own company, that may meanyourself!) Letting your supervisor knowthat you have caregiving demands isthe first step in creating some workable strategies for compromise on everyone'spart. It's often easier if you can developsome creative alternatives that willallow you to make the best choices —for example, is there some way to work

effectively with a more flexible workschedule? Does the company provideany assistance or benefits for workingcaregivers? The Family and MedicalLeave Act provides for specific periodsof unpaid leave for caregiving for illparents or children and can be used forshort-term caregiving emergencies. Formost employed caregivers, however, the typical long-term nature of caregivingresponsibilities requires longer termsolutions. Also, check with your humanresources person or the employee assistance program to see what benefitsyour company offers.

Remember you are not alone in thischallenge, many caregivers face the difficult choices of family and career. Aperspective from others is available inseveral books: “Balancing Act: HowManagers Can Integrate SuccessfulCareers and Fulfilling Personal Lives,"by Joan Kofodimos (Jossey-Bass, 1993)800-956 7739; and “Body and Soul," byAnita Roddick (Crown Publ., 1991)800-726-0600.

Another good resource is the Familiesand Work Institute, 330 Seventh Ave.New York, NY 10001, 212-465-2044www.familiesandwork.org for a variety of reports, guides, etc. on balancing your life, career, and caregiving.

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AAggiinngg iinn YYoouurr OOwwnn HHoommeeThe alternatives for senior living are not limited to living at home or in anursing home. Rather they incorporate

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what is called “the continuum of care."This continuum encompasses totally independent living at home, through assisted living in a variety of retirement residential settings, to the most intensenursing-related care provided in nursing homes. Today, between in-home services and less intense carefacilities such as assisted living facilities, caregivers and care recipientshave a wider variety of appropriatechoices for care than ever before.

Research shows that staying at home isthe living arrangement clearly preferredby an increasing number of today'solder men and women. A recent surveyby AARP, for example, found that 85%of older respondents prefer to remain intheir own homes if they need care. Overthe past two decades the support foraging in place in one's own home haveimproved dramatically. Consider twosets of factors and consumer decisionsas you evaluate the desirability and feasibility of providing care for yourelder in her or his own home (or inyours). The first factors concern physical changes in the home itself —home modifications, assistive and supportive devices that can be purchased or rented, safety, and emergency response systems. The second set of factors and decisions to consider concerns services. “Homecare" is the general phrase describingbringing such help as nurses, companions, transportation providers,and home care and personal care aidesinto your elder's home. These are discussed in the following section.

* Assistive Devices for the home areprobably your first consideration.Mobility devices are the more obvious first kinds of assistance that a frailolder person needs. Everyone is familiarwith canes, walkers, and wheelchairs —although even these come with a variety of options and prices. Eachroom in your relative's apartment canbe re-fitted or re-furnished with products and devices to increase safety,convenience and independence — fromrubber-like non-slip doorknobs, toreachers to pick objects up from thefloor without having to bend down, topneumatic living room chairs that automatically rise to help an older person get out of the chair.

The federal government's NationalInstitute on Disability andRehabilitation Research has developedan enormous database of assistivedevices and rehabilitative products. The ABLEDATA Database includes listingsof over 17,000 products currently available from 3,000 differentmanufacturers and distributors. Call 1-800-227-0216 (8455 Colesville Rd.,Silver Spring, MD 20910 www.abledata.com) to get on theInstitute's mailing list and to get accessto the database. Each entry includes adescription of the product, its retailprice (and the date the price was identified), the manufacturer's name(and address and telephone number),availability (manufacturer only or alsolocal distributors), and any “special"comments such as “assembly required" or “Medicare reimbursable.”

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* Home Modification. Declines in physical strength, vision, and hearingas well as diseases such as arthritis can often be dealt with by modifications inthe home. Some are more easy toaccomplish than others; some are costly. All such changes should be discussed with the older person whowill use them and with others who mayin the future be involved personally orfinancially in caregiving. Check withan occupational therapist for help inidentifying which modifications areneeded.

ADL (Activities of Daily Living) studiesshow that bathing, toileting, and eatingare the activities that most clearly signal declines in an older person'scapacity to live independently.Traditional bath tubs can be replacedby tubs with lower sides or fitted withgrab bars. Doorknobs, faucets, and cabinet handles can be replaced withlarger lever-type handles, rather thanround knobs, for easier and safer use byelderly hands. Household lighting canbe made brighter (but not glaring)throughout the home, sometimes simplyby increasing light bulb wattage or byinstalling different kinds of lamps andlighting. Where mobility has declined,ramps and even elevators or banister-chair lifts could be installed, amongother things.

A comprehensive and readable sourceof very practical information on thisrange of home modifications is available in The Do-able Renewable Home by AARP. The book is availablefrom AARP or from the website of the

Andrus Gerontology Center of theUniversity of Southern California:www.usc.edu/dept/gero/hmap/library/drhome.

* A Personal Emergency ResponseSystem (PERS) is an electronic deviceconnected to the home telephone that automatically summons help in anemergency. A PERS consists of a smallradio transmitter usually worn as a necklace or bracelet so the user canpress it wherever he or she is (in bed,on the floor, in the bathroom) when heor she falls or has an emergency. Whenthe radio transmitter is activated, itsends a signal to a telephone responsecenter, even if the phone itself is off thehook. The response center can be alocal PERS system, the local hospital, or911.

Dealers ranging from small companiesto the regional phone companies offerboth the PERS equipment and theresponse center response services.Hospitals and local aging or social services agencies in your communitymay act as “middlemen" in linking youto preferred dealers. Monthly rentalincluding both the in-home equipmentand the response center service canrange from $15 to $50 per month. Thecost is generally not Medicare reimbursable, but some private insurance may pay for all or part of thesystem.

The best place to start your investigation is the comprehensivereport prepared by the Federal Trade Commission called simply “PersonalEmergency Response Systems.” Write to

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the FTC Office of Consumer andBusiness Education (Bureau ofConsumer Protection), 600 PennsylvaniaAve, NW, Washington, D.C. 20580; call them 202-326-3650, or read the report onwww.ftc.gov/bcp/conline/pubs/services/pers.htm.

In addition, AARP has prepared a consumer guide to PERS systems thatsummarizes the characteristics of twenty different systems. RequestProduct Report: PERS (Report#D12905).

* Home Safety. When you and yourelder have concluded that living athome is both desirable and feasible, it isessential that you do a comprehensivehome safety evaluation. Evaluate yourhome for slippery floors, glaring lighting, sharp table corners, unbalanced tables, or exposed electriccords. Aside from the home itself, theolder resident's health and mobility addanother layer of safety planning concerns. The spacing of furniture,doorways, and appliances need to beexamined, along with the safe locationand spacing of tables, chairs, cabinetsand appliances. Use the five basicActivities of Daily Living as anotherway of looking for “safety violations" —can your elder eat, bathe, go to thebathroom, get dressed, and move fromhis or her bed to a chair safely?

Some area agencies on aging, countyhealth programs, hospitals, HMOs, and senior centers provide outreach in-home safety evaluation services.They may be called Falls Prevention

programs or simply home safety programs. Books, pamphlets, and othereasy to use publications are available available from these community agencies or from AARP.

The Agenet website, www.agenet.com,offers a comprehensive home safetychecklist for use by caregivers and eld-ers to assess possible hazards within thehome. The 60 very specific questions focus your attention on specific parts of the home on a room byroom basis.

AARP's Connections for IndependentLiving is a continually updated localcommunity program that helps olderpeople remain independent through theassistance of AARP members as volunteers. Check the AARP website fordates and addresses where local homesafety workshops and informationexchanges are currently scheduled:www.aarp.org/programs/connect/home.html.

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Finding and arranging for home care,which typically focuses on Activities ofDaily Living rather than health andmedical services, and then monitoringthe care is an essential service for anelder remaining at home. Most communities have services available tohelp older people remain independentor cared for at home (in their ownhome or the home of a relative). TheNational Institute on Aging identifiesthe following services: homemaker/

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home health aide services, home-delivered meals, transportation andescort services, household workers, aFriendly Visitors Program, adult daycare programs, respite care for caregivers, and emergency medical systems. Some of these support services and others are funded by stateand county programs or offered bychurch or volunteer groups. Eligibilitycriteria and cost vary greatly by location, and you will want to functionas your older relative's advocate inidentifying and arranging services fromthe state or local agencies.

Home care is emerging as a specializedservice industry with much variation inthe scope of services, quality of serviceand cost. Home care workers includesvisiting nurses, physical therapists,occupational therapists, and homehealth aides, as well as non-medicalpersonnel who serve as companions,homemakers, personal care attendants,and escort/transportation providers.

In addition to the fundamental questions of quality, availability, andaffordability of the service, home carerequires the caregiver to be an advocatefor the older person's services:

* Who will find, screen, and recruit thehome care service providers?

* Who is responsible for paying thehome care bills? If it is to be the olderperson him/herself, will the medical problems that initiated the reason forthe care prevent effective supervision ofthe home care providers?

* Will there be just one provider or willit take several different services — e.g.,meals, housekeeping, transportation,everyday assistance inside the apartment, taking medications, physicaltherapy? Who will coordinate theseseveral services?

* If a home care worker is delayed ordoesn't show up, what is the back-upsystem? Who will monitor the daily activities of the home care workers, andwho is responsible for finding the substitutes?

If staying in his or her own home environment is your elder's decision,then home care may be available, alongwith assistance in arranging for it.Several national temporary employmentcompanies have divisions that specializein home care, and hospital dischargeplanners or geriatric care managers canalso be particularly helpful in makinghome-care arrangements. There arealso many community-based localproviders offering in-home services,such as “Meals on Wheels" which provides low-cost nutritious meals forthose who cannot get out to shop ordine. Try the Eldercare Locator (800-677-1116) or your local telephone book“Blue Pages" for the services.

FURTHER INFORMATION:Ada Romaine-Davis, Jennifer Boodas,and Ayelife Lenihan (editors),Encyclopedia of Home Care for theElderly. Greenwood Publishing Group(1995).

D. Helen Susik, Hiring HomeCaregivers—The Family Guide to

In-Home Eldercare. American SourceBooks, San Luis Obispo, CA (1995).

The National Association for Home Care(NAHC) is a trade association that represents 6,000 home care agencies, hospices, and home care aide organizations. NAHC provides consumers with information on how todefine their need for home care assistance, how to judge provider qualifications, how to locate home careagencies in the community, and how tofinance home care. NAHC, 228 SeventhStreet, SE, Washington, DC 20003, (202)547-7424. www.nahc.org andwww.homecareuniversity.org.

When home care needs extend beyondActivities of Daily Living to requireadditional medical and pharmaceuticalservices, a visiting nurse may be necessary. Visiting Nurse Associations(VNA), with 513 locations in 40 states,are community-based and community-supported nonprofit home health careproviders. In addition to general information about services, the VNAwebsite offers a map-based locator service: 11 Beacon Street, Suite 910,Boston, MA 02108. Tel: 617-523-4042.www.vnaa.org.

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A relatively new kind of care as anextension of home care, known asAdult Day Care (or Adult Day Services),is becoming common. In this kind ofcare, your elder attends a communityfacility during the day, where an arrayof social, recreational, and at some sites

health services are available. The olderperson who lives at home can also havethe experience of meals, recreation,some therapy and medical services inan organized and supervised environment. Simultaneously, the adultday center offers a reprieve to the caregiver. The time off offered by theadult day center may well spell the difference between continued at-homeresidence and a move to a nursinghome or other senior living accommodation.

Many adult day care centers include anurse or other health professional whowill perform various screening servicesas needed. Some adult day centers arespecially designed to work withAlzheimer's patients.

Consumers can locate adult day servicesin their community a number of ways, including:

- The federal government's Eldercare Locator (800-677-1116)

- The local Yellow Pages, under “adult day care," “aging services," “senior services," etc.

- Through the Information & Referral desk at your local Area Agency on Aging (call 800-677-1116) or look in the Blue Pages section of the phone book to find the local area agency. Local senior centers can also recommend adult daycenters.

- The National Adult Day Services Association (NADSA) is the national organization for the approximately 4,000 local adult day service centers

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bathing, eating, and transportation?

* Does a resident have to be ambulatory or are walkers and wheelchairs allowed?

* Are there additional costs if meals must be delivered to the apartment?

FURTHER INFORMATION:An excellent place to start your searchis with Assisted Living Housing for theElderly — Design Innovations from theUnited States and Europe (1994) byVictor Regnier.

The American Association for Homesand Services for the Aging (AAHSA) isthe association of non-profit senior housing facilities, including nursinghomes, CCRCS, and assisted living residences. AAHSA offers a directory ofits member facilities to help consumersfind appropriate residences, and distributes a series of booklets on howto evaluate and choose a nursing home,a CCRC, an assisted living place, orhome care provider. AASHA, 901 E St.NW, Suite 500, Washington, DC 20004-2011. 202-783-2242. www.aahsa.org.

The American Health Care Association(AHCA) is a membership association of12,000 senior housing facilities includingnursing homes, CCRCs, and assisted living facilities, most of which are inthe proprietary for-profit sector, butincludes some non-profits as well.AHCA provides substantial consumerinformation:. 1201 L Street, NW,Washington, DC 20005, 202-842-4444.www.ahca.org.

throughout the US; it also helps consumers locate appropriate services.NADSA/NCOA, 409 Third Street, SW,Washington, DC 20024. 800-424-9046.www.ncoa.org/nadsa.

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There are two basic models for AssistedLiving residence and assistive services:the Rental Model (which follows a hotelor apartment way of doing business)and the Condo Model. The rentalmodel operates on a month-to-monthbasis, often with a yearly lease. In thecondo model, you purchase the residence, usually by making a substantial down payment (as little as$50,000 or as much as $350,000) andthen have a monthly maintenance fee.There are also variations in the amountof assistance you get for the monthlyfee. Assisted living usually includesmeals in a dining room setting, house-keeping services, and a range of healthand personal assistance depending onthe older person's needs.

If you and your relative are consideringassisted living, consumer advocatessuggest the following considerations:

* For what time period does the facility guarantee care?

* Is it certified by the Continuing Care Accreditation Committee and a state or local agency?

* Is there special care for Alzheimer's patients?

* What specific services are supplied under the categories of grooming,

The Assisted Living Federation ofAmerica (ALFA), the professional association whose members are solelyassisted living facilities, provides information and criteria useful inchoosing the right facility. In addition,the organization's website offers a stateby state listing of facilities, searchableby county and city; each entry includesa street map of the facility's location.10300 Eaton Place, Suite 400, Fairfax,VA 22030. 703-691-8100.www.alfa.org.

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The confusion over the two kinds ofnursing home stays further complicatespublic understanding of Medicare versus Medicaid. Since Medicare paysonly for short-term post-hospitalizationrecuperation in skilled nursing facilities(nonetheless labeled as “Nursing Home"stays), the public continues to perceive

incorrectly that Medicare pays forchronic nursing home utilization. Manypeople also believe that Medicare paysfor long term chronic care services inthe home. It does not.

Over the past decade, with increasinglongevity and therefore an increasingneed for chronic longer-term care,Assisted Living has grown dramatically.As described in the previous section,this relatively new kind of senior housing is generally defined as independent living, but with variouskinds (and levels) of assistance, forolder persons who do not need the dailynursing care. But caution is needed.Assisted living can range from largecorporate chains to “mom and pop"businesses in which a few rooms in anold large house are made available on aroom-and-board basis with relativelylittle assistance.

Continuing Care RetirementCommunities (CCRCs) offer independentliving, assisted living (with some assistance in everyday activities), and anursing home all on the same campus,so that the older person can receivemore intensive care as he or sherequires it.

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When you are evaluating and selectinga senior housing facility with a relativeor friend, you should visit and compareseveral facilities, according to NationalCitizens' Coalition for Nursing HomeReform. Visit each one several times, atdifferent times of the day, and use all of

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202-332-2275 1424 16th St., Ste. 202,Washington, DC 20036 www.nccnhr.org.

The Nursing Home Information Serviceis an information and referral center forconsumers of long-term care and their families, friends, and advocates, including information on nursinghomes and alternative community andhealth services. Write to the NationalCouncil of Senior Citizens, NursingHome Information Service, NationalSenior Education and Research Center,Inc., 8403 Colesville Rd., Ste. 1200,Silver Spring, MD 20910 (301-578-8800) www.ncscinc.org.

AARP can provide general informationon long-term care for consumers. For alist of their publications, write to theAARP Health Advocacy Services, 601 ESt., NW., Washington, DC 20049 (202-434-2277). Their website, www.aarp.org,also provides useful introductions to theissue.

AAHSA, in conjunction with AARP, hasinformation about continuing careretirement communities. Write to theAARP/Housing Activities (at the addressabove).

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For older people who have not purchased long-term care insurance andwho are between the extremes of self-insuring wealth and Medicaid eligibility, an alternative source offinancing long-term care may be theequity in the older person's home.Home equity is the single largest sourceof wealth of older people in the United

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your common senses, including sightand smell, to judge factors on whetherresidents are properly dressed, the foodis appetizing, and the staff responds topatients' calls for assistance.

To summarize:* Residential care facilities provide

room and board and may offer social, recreational, and spiritual programs.

* Continuing care retirement communities (CCRC) start with independent living and progress to more intensive care services, including room and board, personal and health care, and social activities.

* Assisted living facilities include retirement homes and board and care homes. Services differ from location to location but usually include meals, recreation, security, and assistance with Activities of Daily Living as noted earlier, and medication management.

* Skilled nursing facilities offer services for those who need 24-hour medical care and supervision. Emphasis is on medical care with rehabilitative therapy to maintain or improve abilities.

Call the Eldercare Locator (800-677-1116) for local resources in each ofthese areas.

The National Citizens' Coalition forNursing Home Reform helps local organizations work for nursing homereform and improvements in long-termcare. To learn more about the Coalitionand for a list of consumer publications:

States today. A Reverse Mortgage, aloan given by a bank or other lendinginstitution using the paid-up value ofthe home as collateral, might be used topay for medical and home care bills.

FURTHER INFORMATION: Reverse mortgages are offered by some(but not all) retail banks, S&Ls, andother banking organizations. First checkwith your local bank to see if they offerreverse mortgages, and with what termsand rules.

Look for Your New Retirement NestEgg: A Consumer Guide to the NewReverse Mortgages (1996) by theNational Center for Home EquityConversion. This book describes in greatdetail the variations in reverse mortgage plans sanctioned by recentfederal law, how to calculate your costs

and returns, and a detailed appendix onwhere to find lenders in your state thatoffer reverse mortgages. 7373 147thStreet West, Apple Valley, MN 55124,612-953-4474. www.reverse.org.

AARP administers its AARP HomeEquity Information Center as a focalpoint for consumer-directed information on reverse mortgages. TheCenter provides a range of books, pamphlets, and videotapes on such subjects as federally-insured mortgages,cost and eligibility issues, differentways of receiving the cash from homeequity, and how to select a reversemortgage counselor and lender. Contactthe Home Equity Information Center atthe AARP Foundation, 601 E Street NW,Washington, DC 20049. The websiteaddress, part of the AARP's Webplace,is www.aarp.org/hecc.

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As you plan for the future payment ofhealth costs, be sure you know wherethe necessary health insurance willcome from — and how it will be paidfor. This is especially true if you areconsidering early retirement and, likemost people, the necessary health insurance is connected to employment.

HCFA (the U.S. Health Care FinancingAdministration), the department thatadministers Medicare, provides threesources of up-to-date information notonly on Medicare itself, but guides onpurchasing private supplemental healthinsurance: 1-800-MEDICARE. The 1999Guide to Health Insurance for Peoplewith Medicare. www.medicare.gov.

If you want or need to purchase healthinsurance on your own, consider thefollowing:

Ask your former employer about yourrights under the ComprehensiveOmnibus Budget Reconciliation Act(COBRA) legislation, which often allowsformer employees to purchase the samehealth insurance plan that they hadwhen they were working (the number ofmonths varies depending on the familyand employment circumstances.)

Group health insurance is almostalways less expensive than individualinsurance, so check with all the groups,teams, social clubs, professional, fraternal, and hobby organizations youor your family members belong to,because many offer group health insurance as a benefit of membership.

PPaarrtt TTwwoo——PPllaannnniinngg ffoorrYYoouurrOOwwnnLLoonngg--TTeerrmm CCaarreeYou’ve learned a great deal about caregiving in Part One. This second partof the guide was developed to helpcaregivers and prospective caregiversstart planning for their own long-termcare. It includes descriptions of someof the important issues and lists ofresources for more information.

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While most people know that Medicareis the national health insurance forpeople over 65 in the United States,many Americans do not realize thatMedicare eligibility does not begin untilage 65, even if you choose early SocialSecurity retirement at age 62 or 63. Arecent national survey found thatalmost half of American adults falselybelieve that you qualify for Medicarewhenever you start to receive SocialSecurity.

Similarly, less than two-thirds ofAmericans correctly know that even ifyou have a private pension from anemployer, your employer is not requiredto provide paid or subsidized retireehealth insurance. In planning for yourself, be sure to check with theappropriate employer personnel officeor the employee assistance program,read the fine print in retirement benefitsand health insurance brochures, and askif any retiree health insurance that isoffered can change or is likely tochange in cost and coverage in the nextfew years.

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Also, keep in mind that Medicare andSocial Security have waiting periodsinvolved in qualifying for benefits, soapply for these benefits several monthsbefore you plan to retire.

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Most employees have some kind of disability insurance through theiremployment primarily to replace part oftheir income if they are no longer ableto work. For middle-agers, disabilityincome insurance is at least as important as life insurance because amiddle-ager is more likely to becomedisabled than die. Be sure to understandwhat kind and amount of disabilityinsurance you have, how it works, andhow much it would cost to purchasemore.

In addition to its basic purpose in providing retirement income, SocialSecurity is also a basic disabilityincome insurance policy whose benefitsare available to workers at any age, notjust 62 or 65, depending on the natureof the disability. However, SocialSecurity disability benefits are not easyto qualify for since disability meansyou are so severely impaired, physicallyor mentally, that you cannot performany substitute gainful work. The impairment must be expected to last atleast 12 months or to result in earlydeath. To learn more about SocialSecurity Disability Insurance, obtain a copy of the most current Social Security

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Handbook from the: Social SecurityAdministration, Office of PublicInquiries 6401 Security Blvd., Baltimore,MD 21235(800-772-1213). Also look attheir website at www.ssa.gov.Remember that disability benefits mayhave a long waiting period, so applyearly.

Check with your employer to learnwhat kind of disability income insurance you have through your job;in many states this is required insurance. You should get answers tothese questions as part of your generalretirement planning, — before the benefit might be needed.

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Most families need some life insurance.You should consider the kind andamount in terms of the basic purposelife insurance is intended to serve. Inmost cases, life insurance is intended to provide cash to replace the income afamily loses due to the death of the person earning the income. In the caseof the death of a non-working spouse,the cost of providing child care mayalso need to be covered. Consequently,in most younger households, both husband and wife should consider having life insurance.

When you shop for insurance, there arefour key ideas to keep in mind —

(1) Seriously consider whether you really need life insurance, and if so,how much.

(2) Consider which type of insurance is

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The title of this section is financialplanning and not “retirement planning,” for two reasons. First, the line betweenwork and retirement is not as clear-cutas it used to be: an increasing numberof “young-old" Americans now choosepartial, phased, or delayed retirement.Second, there are several different agesat which you can begin to get variouspension and retirement benefits, andyou don't have to stop working to getthe money. Therefore, your decisionabout whether to work or retire shouldbe made in the context of the largerissue of your financial planning foryour later years.

* Social Security. The “traditional"retirement age is 65; this is generallythe age at which you get “full benefits".You can retire and get Social Securityat any time between 62 and 65, butyour monthly benefit will be reducedbased on the number of months prior toage 65, and this will be a lifelongreduction. You also have to make a formal application for Social Security payments at least 60 days before youneed to take them. Documents such asproof of birth, citizenship, or marriageare needed.

* Qualified Retirement Plans. In some(such as IRAs or 401[k] plans) you can

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right for you: term life insurance, wholelife, or universal life insurance.

3) Understand the options, costs, and benefits that are part of the term lifeinsurance “product."

(4) Shop around, look at price, considercompany quality as well as product features.

Consumer Reports, July 1998 (availableat most libraries), offers an excellentoverview of the differences betweenterm life insurance and whole or universal life insurance. The article alsoprovides a calculator process by whichyou can estimate your own need for lifeinsurance. This decision should be madein the context of your overall financialplanning; consult with financial professionals, if desired.

Note: the following are examples ofinsurance information services, not recommendations:

www.termcomparison.comOr: 1-888-825-8762

www.quotesmith.comOr: 1-800-556-9393

www.insweb.com/ins101

www.quicken.com/insurance includesan elaborate life insurance section,including definitions, discussion of howlife insurance fits into financial planning, and access to costs andquotes.

begin to withdraw funds at age 59 1/2,even if you don’t stop working. Butnote that (a) you are not required towithdraw funds at this age, and (b) ifyou withdraw funds earlier than age59 1/2, you will incur a 10% tax penaltyin addition to any income taxes youmay owe. Also, if you are still workingat age 59 1/2, withdrawals will dependon plan provisions. You must begintaking a “minimum withdrawal” fromIRA accounts no later than April 1stfollowing the calendar year in whichyou reach 70 1/2, even if you continueto work. If withdrawals are not startedby 70 1/2 you will incur a penalty.

FURTHER INFORMATION:Call the Social Security Administrationat 1-800-772-1213 to find out moreabout the age and eligibility rules forearly and “normal” (currently age 65)retirement procedures. Its website,www.ssa.gov, provides an automatedlocal office locator. When you type inyour zip code, the website returns theaddress, the hours the office is open, astreet map of the location, and writtendriving instructions.

To find out what your Social Securityretirement benefit will be when youhope to retire, request your PersonalEarnings and Benefits EstimateStatement — your “PEBES" — fromSocial Security; ask for a PEBES requestform (#SSA-7004) by calling your localSSA office, or from the SSA website.Obtain a copy of either or both of thefollowing free SSA booklets— Whenplanning for your future retirement:Social Security Retirement Benefits

(#05-10035, February 1999). To betterunderstand the benefits and proceduresonce you have started receiving SocialSecurity benefits: What You Need toKnow When You Get Retirement orSurvivors Benefits (#05-10077, January1999).

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There are two basic types of pension plans: Defined Benefit plans andDefined Contribution plans.

A defined benefit pension is the “traditional" employer-provided orunion-provided pension: what isdefined is the dollar amount of the benefit you get when you retire (basedon such things as years of employmentand amount of regular income). Thefinancial risk is shouldered by the pension plan which is obligated tomake sure that the cash is available topay the promised benefit.

In the defined contribution pension, theonly amount defined in advance is theamount contributed into the pension,either by you or your employer (or acombination of both). There is no guarantee of how much cash theseKeogh, IRA, or 401(k) accounts will beworth years later when you retire. Andwhile employers typically offer investment advice and a variety ofinvestment options, the financial risk ison your shoulders, because only theamount of the contribution is guaranteed. If your pension is a defined

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contribution plan, then there is less regulation to protect you, and you haveto know more about your own financialand investment responsibilities.

FURTHER INFORMATION:Your local library should have the following useful books that discusspensions:

James E. Birren (editor), Encyclopediaof Gerontology: Age, Aging, and the Aged. Academic Press (1996).

George L. Maddox (editor),Encyclopedia of Aging: AComprehensive Resource inGerontology and Geriatrics (2nd Ed.).Springer Publishing Co. (1996).

Lois A. Vitt and Jurg K. Siegenthaler(editors), Encyclopedia of FinancialGerontology. Greenwood Publishing(1996).

If you have questions about your pension rights, or want to report a pension rights violation, contact theU.S. Department of Labor's Pension andWelfare Benefits Administration(PWBA), 200 Constitution Ave., NWWashington, DC 20210. Their generalpublications request number is 800-998-7542, and their TechnicalAssistance and Inquiries number is 202-219-8776. In addition to its nationaloffices in Washington, DC, the PWBAhas 15 Regional and District Officesaround the country. Call the main 800number to find your closest regionaloffice or visit their website atwww.dol.gov/dol/pwba/public/contacts.

The most immediate and relevantsource of pension and pension rightsinformation is your employer. Make anappointment with the Personnel,Benefits, Human Resources departmentor employee assistance program. Findout how your employer's pension system works not only in terms of contributing and investing money, butthe rules and regulations about receiving the funds in the form of apension.

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The 1974 ERISA pension law requires that husband and wife at least discusswhat the employee will do when he (orshe) elects to receive his (or her) pension. For example, a retired husband can choose to receive a reducedamount, say 80% of his pension forthe rest of his life instead of 100%, sothat his widow will receive a specifiedamount until she dies. Each has to signan ERISA form saying that they havediscussed the options.

The strategy and calculations are basedon such things as his and her healthstatus, how much income they estimatethey will need and the full profile ofwhere that income will come from.

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retirement, don't forget about the availability and the cost of healthinsurance. Many working-age individuals get their health insurancethrough their workplace. So, as you getcloser to retirement, be sure that youknow where your health insurance willcome from. Remember that a person isnot eligible for Medicare until age 65 —which is separate from other SocialSecurity retirement ages and benefits.

FURTHER INFORMATION:To better understand the protectionswhich ERISA gives to women and surviving spouses, contact theDepartment of Labor to request a copyof their “Know and Do" booklet. ThePension and Welfare BenefitsAdministration (PWBA) of theDepartment of Labor, mentioned earlier,is the contact place for this publication: 200 Constitution Ave., NW Washington,DC 20210. 800-998-7542.

The non-governmental Pension RightsCenter in Washington, DC, operates aLegal Outreach Program to protect thepension rights of workers, retirees, andtheir families. 1140 19th St., NW, Ste.602, Washington, DC 20036 (202) 296-3776.

The Older Women's League is especiallyconcerned with the pension rights ofspouses and widows: 666 EleventhStreet, NW, Suite 700, Washington, DC20001. OWL has local and state chapters throughout the country; tolocate a chapter near you call: 1-800-825-3695.

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The National Center on Women andAging at Brandeis University serves asa clearinghouse of current informationon financial issues for women andaging more generally. National Centeron Women and Aging, Heller School,MS035, Brandeis University, Waltham,MA 02454-9110. 800-929-1995www.brandeis.edu/heller/national/ind.html.

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Defined contribution pension plans andself-directed Individual RetirementAccounts put more financial andinvestment responsibility on the shoulders of working men and womenthan used to be the case. Because of thedramatic increase in the kinds andsources of investment and savings adviceto help you, start with the followingbasic principles as an introductory setof suggestions and cautions.

If you're fairly new to pensions andinvestments, a good place to start iswith the series of books available inmany bookstores these days, the“Dummies" Books. Personal Finance forDummies, for example, makes theimportant point that personal finance isNOT simply a question of investments,but involves a broader range ofinformation including saving, budgeting,mortgages, insurance, and records-keeping. After this introductory volume,you may want to read Investing forDummies and Mutual Funds forDummies.

Some tips for saving and “investing" inretirement:

_ If you have a defined contributionpension such as a 401 (k) plan, and ifyour employer matches all or part ofyour contribution, then be sure youcontribute the maximum amountallowed. - Pension rules and eligibility havechanged dramatically over the past fewyears. Even if you and/or your spousehave a pension plan at work, you mayalso be eligible to open a traditionalIRA (although you may not be able todeduct your contributions) or a RothIRA.

FOR MORE INFORMATIONThe Internet offers a virtual cornucopiaof educational material, financial opinions and, planning tools. Your firstvisits should be to one or more of theseveral mass media “household names”that have created excellent (and free)financial websites (e.g., www.cnbc.com,www.asec.org, www.cnnfn.com, andwww.washingtonpost.com). Manyfinancial services and mutual fundcompanies also offer valuable financialplanning and educational websites.Also, you may want to check general“financial data” websites (e.g.,www.quicken.com and www.bloomberg.com)that provide historical as well as currenthistorical mutual fund and stock priceinformation and graphs, company andfund profiles, investment strategies,daily financial news, and even free personal portfolio management tools.

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The finance section of USA Today’swebsite, www.usatoday.com, includesno fewer than 100 different financial calculators pertaining to budgeting,insurance, mortgages, stocks and mutual funds purchasing — and retirement planning. A similar selectionis available from Kiplinger's personal finance magazine at www.kiplingers.com.

LLoonngg--TTeerrmm CCaarreeIInnssuurraannccee :: TThhee BBaassiiccssAlthough long-term care insurance hasbeen around for about twenty-fiveyears or so, the nature of the policies,the kinds of features they include, andtheir costs have changed and evolveddramatically. It is appropriate to consider this form of financial protection, but there are many questions and issues that you shouldexplore. Keep in mind that this is along-term investment. That is, you arepurchasing something now that maynot pay a benefit for 20 or even 30 years. Or, like fire insurance on yourhome, maybe it won't pay off at all ifyou die without needing long-termcare.

Here are some basic questions to askabout any long-term care (LTC) insurance policy you are considering:

- What kinds of long-term care servicesare covered by the policy? It shouldcover home care as well as nursinghome care.

- How does the policy typically pay abenefit? Does it provide a specific, fixed

services (e.g., medicines or physicaltherapy)?

- What about inflation? Does the policyinclude, or offer, protection against therising costs of nursing home care? Howmuch does the “inflation protectionrider" to the policy cost? Is the inflationprotection automatically renewed eachyear?

- Are there rebates and returns? Whathappens if you decide not to continuewith the policy? Is there a short period(e.g., 30 days) during which you canchange your mind and cancel the contract? What happens if you decideyou don’t want the policy after severalyears; is there any rebate? Is there anycash value build-up in the policy thatyou can borrow or receive? Can the policy be converted to other kinds oflong-term care insurance or other kindsof health insurance?

Ultimately, the important thing to remember is: generally, the youngeryou are at the time of purchase, thelower the premium. Willingness to takerisk is a large part of the personal andfamily decision on long-term careinsurance. Are you willing to risk thatyou will not have substantial long-termcare expenses in the next ten years?And are you willing to risk the possibility of not being able to qualifyfor long-term care insurance ten yearsfrom now?

FOR MORE INFORMATION—Information can be found in theOctober 1997 Consumer Reports SpecialReport on long-term care insurance,

number of dollars per day, e.g., $125per day, or does it provide a percentageof the actual cost charged by the nursing home (or other long-term careservice)?

- Whether dollars per day or percentage,is there a difference in the nursinghome benefit compared to the homecare benefit? You will have maximumflexibility if the policy pays, for example, $150/day for nursing homecare or $150/day for home care services.

- What are the “triggers" for receiving the long-term care benefits from thepolicy? Will a signed statement fromyour doctor be sufficient or does itrequire certification from the insurancecompany's medical staff? Will two non-medical Activities of Daily Livingneeds be sufficient to trigger paymentof benefits? Is the number or combination of ADLs such that triggering is more than likely?

- What are the deductibles, co-payments,and waiting periods in the policy? MostLTC policies have a 30-day to 90-daywaiting period. Like the $500 deductiblein automobile collision insurance, ifyou are willing to pay for the firstmonth or two of care, the policy premiums will be lower.

- How will the long-term care insurance“connect" or “integrate" with Medicareand other health insurance you mayhave? Are there elements of the nursinghome care or home care costs that willbe paid by other insurance? Conversely,does the long-term care policy assumethat other sources will pay for certain

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“How Will You Pay for Your Old Age?"(available in most libraries.) The comprehensive 13-page article describesthe basic elements of an LTC insurancepolicy, demonstrates how you can judgethe merits of a policy, discusses the“strategy" of private insurance versusMedicaid spend-down requirements,indicates how you should prepare totalk to an insurance agent, and providescompany-specific descriptions andquality ratings.

One of the most comprehensive sourcesfor consumer-accurate and consumer-friendly information on long-term careinsurance is the non-profit UnitedSeniors Health Cooperative, 409 ThirdSt., SW, 2nd Fl., Washington, DC20024; (202) 479-6692. USHC has produced Long-term Care Planning: ADollar and Sense Guide (about $18).www.ushc-online.org.

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“Harvesting" here simply refers toactions you can take or should avoidtaking typically before retirement, whenyou are in your forties, fifties, and sixties, in order to get the most out ofyour retirement-oriented investments.

There are several federal tax rulesregarding when you may withdrawmoney from your retirement accountsand when you must withdraw fundsfrom those accounts. For example, youmay begin to withdraw money fromyour IRA at age 591/2 but you don'thave to (taking money out of a

retirement account before 591/2 will costa 10% penalty in addition to anyincome taxes you owe). But becausethese funds were tax deferred for retirement income purposes, you mayhave to start withdrawing minimumamounts at least by age 701/2 even ifyou don't really need the money, andeven if you are still working.

Having a strategy for making thesewithdrawals also involves understanding the required amounts ofthe “minimum distributions," how tocalculate your longevity at the time youbegin the withdrawals, whom you havenamed as a beneficiary and how oldthat person is, and personal choicesconcerning how quickly or slowly youwant to withdraw the money from theaccounts.

Information on topics related to “harvesting" regularly appear in the following places:

Most local newspapers include a weeklycolumn on personal finance. Watch forarticles on retirement planning thatspecifically discuss ways to withdrawmoney from retirement accounts.

The second section of the Wall StreetJournal regularly includes personalfinance articles under the titles “YourMoney Matters,” and “Getting Started.”

The www.usatoday.com website mentioned earlier includes both currentand past articles on a broad range ofretirement and investment subjectsrelevant to the idea and strategy of

“harvesting."

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Here are a few basic principles:

(1) Trust: the most fundamental issue isthat you trust the advisor. How he orshe creates that trust is a complex issue.One thing you can do is to be informedand be prepared. The more you learn inadvance, the better you will be able toask questions, and then evaluate andtrust the answers and the advisor.

(2) Know what you are buying: If thefinancial planner offers “free advice" ona continuing basis, be skeptical. That is,if the planner's income is based on thecommissions he is making on theadvice that is “freely" given, then theadvice is not so free after all. Typically,choose a “fee-only” advisor rather thana “commission-based” advisor.

(3) Interview several advisors; ask yourfriends; check with local registries for complaints. Ask if he or she makescommissions on the investments, funds,stocks, policies recommended and ifyou are free to buy things not on the advisor's "preferred lists"?

You may want to look for CFP (CertifiedFinancial Planner) or ChFC (CharteredFinancial Consultant) designationswhen considering a financial planner.

1 National Center for Health Statistics, 1992.

2 Family Caregiving in the U.S., A National Survey. National Alliance for Caregiving and AARP. June 1997.

AARP (www.aarp.org) and the NationalCouncil on the Aging (www.ncoa.org)have websites that include informationon retirement planning and regulations.

The International Society on RetirementPlanning (www.isrp.org) offers information and books on generalfinancial life planning.

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A professional financial planner canassist you with asset management andfinancial planning. For example, afinancial planner can help you preparea financial plan that anticipates futureexpenses such as long-term care. Withyour planner, you can determine if youshould consider long-term care insurance. Such a professional can alsoconsider tax issues and help guide youin the best ways to pass on your assetsthrough estate and trust planning.

People who call themselves “financialplanners" really offer different kinds ofservices, from basic investment advice,to how to structure investments forretirement, to tax planning and estateplanning advice. There are also severaldifferent professional associations offinancial planners, and several different“designations" or certificates — thatmay either help or confuse you.

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American Society on AgingBell Atlantic

Department of Veteran AffairsGlaxo Wellcome

MetLife Mature Market GroupNational Association of Area Agencies on Aging

Pfizer Inc.AARP

The ALS AssociationAmerican Academy of Home Care PhysiciansAmerican Association of Geriatric Psychiatry

American Geriatrics SocietyAssisted Living Federation of America

Children of Aging Parents Gray Panthers

National Association of Professional Geriatric Care ManagersNational Association of Social Workers

National Council on AgingSociety for Healthcare Consumer Advocacy

Society for Social Work Leadership in HealthcareUnited Seniors Health Cooperative

Well Spouse Foundation

This guide is intended to raise important issues and provide the reader with some background information on the topics it covers. It must not be construed as

providing legal, financial, medical or other advice.

This publication is supported by a grant from The Equitable Foundation, the philanthropic arm of The Equitable Life Assurance Society of the U.S. Equitable helps people plan for the future, enhance the quality of their lives and manage

their responsibilities toward those who depend on them.

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