Archive for the ‘Lifestyle Choices’ Category

Portugal – Europe’s California With Castles

My wife and I spent two weeks in Portugal on a self-guided road trip for which we had https://www.toursforyou.pt/ arrange our hotels and rental car, suggest sites we might visit and arrange select guided tours, wine tastings and a boat ride along the way.

I call Portugal, Europe’s California because it is west coat, has fine beaches, great wine and food, a diversity of landscapes north to south and very mellow people, most of whom speak English.   Portugal is a good deal smaller than California, only about the size of Indiana, and you can see a lot of it in a two week visit.

What, of course, differentiates Portugal from California is a rich history that goes back thousands of years with a native Celtic people who were in turn overrun by Phoenicians, Greeks, Carthaginians, Romans and Moors.  Portugal fought with Spain for many years to win and keep its independence and was, for a time, a major maritime power with colonies in South America, Africa, India and Asia.   It seems as if each major city and almost every small hill town has a castle or castle ruin.

We were able to fly direct from Philadelphia to Lisbon on American.  The flight is a bit shorter than most to Europe because, at Europe’s western edge, Portugal is closer to the U.S. than much of the continent.  In two weeks we saw a good deal of Portugal, with the notable exception of the southern coast and resort area of the Algarve.

Our itinerary began in Lisbon(3 nights), where we picked up a car and drove southeast through Evora to an excellent hotel near Monsaraz called Sao Lourenco do Barrocal located on a large wine estate and farm that has been in the same family for over 200 years (3 nights).   From Monsaraz we turned north traveling to Belmonte where we stayed at a posada hotel created from a former convent – Convento de Belmonte (2 nights).   We then continued north to the Douro Valley where we stayed at the Wine House Hotel on a high-quality, small-production wine estate – Quinta da Pacheca (2 nights).    From Quinta da Pacheca we drove west along the Douro River and over the mountains to Porto, where we stayed at Flores Village Hotel & Spa (2 nights) before driving south, stopping at Coimbra, and heading back to the Lisbon airport where we stayed one night at Hotel Tryp Aeroporto before catching our flight home.   All of our hotels were quite good, with Sao Lourenco do Barrocal and the Wine House Hotel standing out above the rest (See Trip Advisor reviews for more details).

Portugal’s two main cities, Lisbon and Porto are both located on major rivers (the Tejo or Tagus in Lisbon and the Douro in Porto) at the point were they enter the Atlantic Ocean.   Lisbon, the capital is a city of about 500,000 people in a metro area with about three million.

Lisbon from overlook

Lisbon is a city of hills with enough elevation changes that there are elevators and funiculars to get you from one neighborhood to another.

Barrio Alto

The center of Lisbon was destroyed by an earthquake and tidal wave in 1755 and was quickly rebuilt with new housing, shops and offices and wider boulevards.  While the City center (Baixa) is attractive, the older hillside neighborhoods of Alfama and Barrio Alto retain their smaller scale buildings with whitewashed walls, orange tile roofs and narrow winding streets.

Lisbon has a cathedral, numerous churches, some good museums (notably the Calouste Gulbenkian Museum) and a wide main boulevard with upscale shopping (Avenue Liberidade) but much of its charm is found in the neighborhoods, small shops, some very good restaurants and the surrounding communities of Sintra, Estoril and Cascais, the latter both fronting the Atlantic.

Among the things we most enjoyed in Lisbon were the fanciful Pena Palace in Sintra, the coastal cities and outstanding sea bass we ate near Cabo da Rosa, Europe’s westernmost point, our evening listening to Fado (Portuguese blues) and the Gulbenkian museum.    We had a car and driver to take us to Sintra and the coast and for a half day tour of Lisbon but could have used one more day in the city for sight seeing and shopping.

Pena Palace

We had our rental car, a Vovo V40 diesel hatchback delivered to our hotel to save us having to come back to pick up our luggage after getting the car.   Portugal drives on the right, using standard international road signs and Google Maps on our phone worked well.   I order a GPS with the rental car because I read cell phone coverage might not be good in rural Portugal but the Garmin GPS that came with the car was useless outside major cities and cell coverage was fine everywhere.  Stick with Google Maps and order enough on your international data plan to cover using your phone as a mapping tool.

Heading southwest from Lisbon we visited Evora, the largest city in the dry and hot Alentejo.   We found Evora to be a bit over-hyped and the large free parking lots that reportedly ring the old city to be very poorly marked.    We ended up driving into and parking in the old part of the City – just remember to pay the meter.    Evora does contain some well preserved Roman features include a temple, a bath being excavated under town hall and an ancient aqueduct.  The cathedral and its museum are also worth seeing.

Roman Temple, Evora

From Evora we continued southwest past the walled town of Monsaraz to Sao Lourenco do Barrocal, an outstanding resort on a large wine estate and farm.   Monsaraz is a well preserved walled town and castle with some nice shops, including a very good pottery and painting gallery called Galerie Monsaraz operated by a husband/wife team of local artists.  We enjoyed our dinner at Restaurante Sabores de Monsaraz, which is a quirky locally owned restaurant where we had black pork with pearl onions and cod Bacalhau à “Sabores de Monsaraz” (see Trip Advisor for review).    While the staff struggles with English and it is a small, authentic Portuguese restaurant, Sabores de Monsaraz does have a slick website on which you can make reservations.

Ducal Palace, Vila Vicosa

We enjoyed the pool, cafe and restaurant at Sao Lourenco do Barrocal and took day trips to nearby sites such as Monsaraz, Villa Vicosa, where we highly recommend the Ducal Palace, and Sao Pedro do Corval where the locally made pottery is plentiful but pretty mundane.

From Sao Lourenco do Barrocal we traveled north to Belmonte, stopping along the way at Castelo de Vide.   Both Castelo de Vide and Belmonte were interesting to us because of their once significant Jewish populations and the history of these communities documented in museums.   The Portuguese Inquisition began in 1497, five years later than in Spain. No meaningful Jewish population remains in Castelo de Vide but it features a large former Jewish quarter and what is reported to be the oldest synagogue in Portugal, now housing a small but well done museum.   Belmonte also had a large Jewish population.  Its Jewish museum was being renovated when we visited in July, 2017 but had some exhibits set up in a nearby storefront.   What’s remarkable about Belmonte is its community of Marrano, or secret Jews, that survived from the Inquisition to today, only emerging from secrecy in 1989 and building a modern operating synagogue.   We liked our hotel in Belmonte (Convento de Belmonte) which is a wonderful renovation of an historic convent but the hotel seemed a bit understaffed (See Trip Advisor).

Heading north from Belmonte to the Douro Valley we stopped at the now abandoned walled town of Marialva, which we enjoyed but is only worth a visit if you are passing by.  As you head north toward to Douro, the land becomes more mountainous and greener and the Douro Valley itself is one of the most attractive landscapes you will see anywhere.

Douro River Valley

The Douro Valley is all about wine, is the only place you can make port wine according to the EU and is the oldest officially recognized wine region, predating those in France.   In the Douro we stayed at the Wine House Hotel on the Quinta de Pacheca wine estate and we highly recommend the hotel, its restaurant and the wine at Quinta de Pacheca.  We also enjoyed a boat ride on the Douro by FeelDouro Yaatch Charters and a tour and tasting at Quinta do Seixo, a large commercial wine estate operated by Sandeman.   We enjoyed the tour and the wine much more at Quinta da Pacheca.

We traveled from the Douro Valley to Porto by taking small winding roads along the river and over the mountains, a beautiful but somewhat harrowing ride, and the only place I thought Google Maps let us down since there were major highways options.    Porto is a wonderful old city of about 215,000 (less than half the population of Lisbon) but with a metro area population of 2.4 million, which is closer to Lisbon’s size.  Navigating Porto’s warren of narrow streets is a chore, so you want to get out of your car as quickly as you can.    We liked our hotel in Porto, Flores Village Hotel & Spa, in part because it was on a delightful pedestrian only street very near City center.   However, that meant after 10 am we had to leave our car in a nearby parking garage and transport our luggage to the hotel.

Porto from Vila Novo de Gaia

In Porto, we had a half day guided tour and also time on our own to explore the city and enjoy its character, shops and restaurants.   We had two excellent meals in Porto at DPO Porto by chef Rui Paula and Cantinho do Avillez by Michelin star chef Jose Avillez.    Porto, like Lisbon, is a very hilly city with some magnificent churches and vistas, particularly the view of Porto from Vila Novo de Gaia, across the Douro.

Before leaving Porto, we took a full day tour to the Minho or Costa Verde, which is the portion of the country north of Porto.   This is beautiful country and we particularly enjoyed the ancient city of Guimarães, where Portugal was founded, the magnificent shrine at Bom Jesus do Monte and the city of Braga.    If you get to Porto, take at least a day and explore theses areas (See photos).

Guimaraes

Bom Jesus de Monte

 

 

 

 

 

 

 

 

 

 

 

 

We return to Lisbon via Coimbra with its university dating from 1290 and a library that looks like it belongs in a Harry Potter novel.  The Hotel Tryp Aeroporto is just an airport hotel but did its job with quite good service and surprisingly good food, so I would use it if I needed a stay at the Lisbon airport.

University of Coimbra

We found Portugal to be an interesting, charming and thoroughly enjoyable vacation spot and would highly recommend it.

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Financial Planning For Retirement

As with most articles on my blog, this one started with a conversation with a friend.   The friend recently turned 60 and is starting to seriously think about retiring from a professional position.   He is thinking about a range of options: fully retiring at age 62, shifting to part-time with his firm and delaying retirement until 65 or 66, or continuing to work full-time until 65 or 66.   From a lifestyle perspective, my friend would like to retire sooner, rather than later, but wants to feel confident about having enough financial resources for he and his wife to live comfortably throughout their retirement.

Health Insurance

It may seem odd to start a discussion of financial planning for retirement with health insurance but Presidential executive actions to not enforce the requirement for mandatory insurance coverage and leave uncertain the fate of some insurance subsidies under the Affordable Care Act (ACA/ObamaCare) have already disrupted the individual insurance market.   Republican proposals to repeal and replace ObamaCare are creating further uncertainty in the insurance market for individuals and, if enacted, are expected to significantly increase the cost of coverage for older, pre-Medicare age, individuals.     One CNN report on the Senate bill as of June 27, 2017 shows the cost of ACA Silver Plan coverage increasing from $1,800 to $8,300 because the proposed Republican legislation allows insurers to adjust rates by age and reduces insurance coverage.   Until things are settled in Washington, it will be very difficult for any individual contemplating retirement before age 65 (when Medicare kicks in) to determine if individual health care insurance will be available and at what cost.

The best advice for now for someone considering retirement is to work full or part time until age 65 in order to retain employer-based health insurance coverage or confirm that you can purchase coverage through your employer using COBRA benefits and retire up to 18 months before turning age 65.   The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, with the individual paying the full cost of insurance.

Savings/Investments

When considering how much savings/investments you will need for retirement there are two issues to consider.

  1. Will your savings/investments generate enough income to allow you to live comfortably and
  2. Will the income from your savings/investment last long enough if you have a very long life?

Generating Enough Income

Popular guidelines for retirement income suggest that you should have sufficient income to replace about 70% to 85% of your pre-retirement annual after tax income to live comfortably in retirement but some more recent thinking suggests your income needs will not decrease that much in retirement as travel and entertainment, recreation expenses will offset reduced income use for business clothing, commuting costs, etc. (See Kiplinger Article).

Rather than focusing on your pre-retirement income, I believe most of those contemplating retirement prefer to focus on pre-retirement expenses to determine if they will be able to afford the lifestyle to which they are accustomed when they retire.   If you plan a major lifestyle change in conjunction with your retirement, like moving to a different community or buying a vacation home, you will need to adjust your expenses, and potentially your taxes, to account for these major lifestyle changes. Looking at actual spending, perhaps over a couple of years, with adjustments for any major lifestyle changes, should provide a solid basis for estimating your expenses in retirement.

The most widely used tool for determining the income that your savings/investments will generate is the 4% rule.   As explained in a CNN Money article (CNN Money Article), “The basic mechanics of the 4% rule are pretty simple. You start with an initial withdrawal of 4% of savings and then increase the dollar amount of that first withdrawal by inflation each year to maintain purchasing power.

So, for example, if you have a nest egg of $500,000 and inflation is running at 2% a year, you would withdraw $20,000 the first year of retirement, $20,400 the second year, $20,800 the third and so on. This regimen results from research done in the early 1990s by now retired financial planner William Bengen. After testing different withdrawal rates using historical rates of return for stocks and bonds, Bengen concluded that 4% was the highest withdrawal rate you could use if you want your savings to last 30 or more years.

Some experts have suggested, however, that a 4% withdrawal rate might be too ambitious given today’s low bond yields and lower projected returns for stocks.  For example, Wade Pfau, a professor of retirement income at The American College, says that retirees should probably limit themselves to an initial withdrawal rate of 3% or so if they want a high level of assurance (although not a guarantee) that their savings will support them for at least 30 years. For more on how much lifetime income one can expect to get through inflation-adjusted withdrawals, income annuities and other methods of creating income based on current market conditions, check out Pfau’s Retirement Income Dashboard (Pfau’s Retirement Dashboard).”

Many financial firms also offer retirement planning services, some of which use a range of alternative models to estimate retirement income needs. One I have used personally in the past is from TRowePrice at TRowePrice Retirement Planner.

I continue to find the 4% rule works well provided you maintain a portfolio that includes stocks as well as presently low yielding bonds and have adequate cash reserves to stay invested through market downturns.   But one common mistake many pre-retirees make is failing to adjust pre-tax retirement income when comparing it to post-tax retirement expenses.   While some retirement income is tax sheltered and some state’s do not tax certain retirement income, be sure to remember that most of your retirement income will be subject to Federal, state and local income tax, even Social Security, and typically taxes are a big enough expense that it will be worth consulting a financial planner or your tax accountant to make sure you get your post-retirement tax calculation right.

Assuring Enough Income For A Long Retirement

A 65-year-old woman has a 68% chance of living to 80 and a 28% chance of living to 90. And a 65-year-old man has a 58% chance of living to 80 and a 17% chance of living to 90.2  (BLS Spending Patterns Of Older Americans).  And these are averages for the entire population. A physically fit, more affluent senior who enjoys better medical care and diet than average and is less likely than average to smoke can expect to live longer than the above statistics suggest.   As a result, a healthy, affluent baby boomers retiring today should assume 30 – 40 years of life in retirement – living to age 95 or 105 if retiring at age 65.

Assuming you are not spending beyond your means and have sufficient savings under the 4% rule to pay for your post-retirement expenses, there are two primary risk areas that might cause a retiree to outlive their savings:

  1. A large unexpected expense, most likely the cost of institutional care for yourself or your spouse for a prolonged period, or
  2. A significant market downturn from which your savings are unable to recover.

Long-term care insurance can protect you against much of the risk of prolonged institutional care but the ideal time to purchase such a policy was when you were in your 50s. It may be cost prohibitive to purchase such a policy at or near retirement age.   My wife and I have policies through Lincoln National Life Insurance Company that we purchased when I was 53 and my wife 52.   These used a lump-sum up-front payment to purchase as annuity that pays the premiums for a long-term care insurance policy while also offering a death benefit if the LTC insurance is not used. The mechanics of this are complicated but I like the idea that the payment amount was locked in at the beginning. If you do not have long term care insurance, you may want to build an additional cushion into your retirement savings to “self-insure” against this risk.   Setting aside $150,000 to $200,000 when you retire that will grow with inflation, which is enough to cover up to 24 months in an assisted living facility, should provide reasonable protection against you or a spouse requiring institutional care in the future (See The Cost of Care and other posts on this blog for more information on the cost of care, what Medicare, Medicaid and the VA will pay for and the cost of institutional vs. at-home care).

My preferred method for guarding against the adverse impact of a market downturn is to have a larger than recommended cash component to my savings/investments that will allow me to draw cash in lieu of stock principal for more that a year in the case of a significant market downturn and to use Social Security in lieu of a commercial annuity product to assure long-term income. Many financial planning websites will recommend an annuity to assure continuity of income into very old age.   While an annuity purchased from a financially sound and reputable company can assure long-term retirement income, the combination of high up-front fees and current low interest rates make commercial annuities less attractive to me, although I am using one in conjunction with my LTC insurance policy.

For a senior with a sufficient savings / investment portfolio to be able to afford retirement, I believe Social Security offers the most attractive option to create the type of guaranteed income that an annuity offers. Social Security pays an inflation-adjusted retirement benefit for as long as you live. A Social Security benefit for someone who contributed the maximum to the system retiring in 2017 at age 66 (Full Retirement Age) is $2,687 per month but will rise to $3,538 per month if you defer collecting Social Security benefits until age 70.  And this higher benefit will continue to grow with inflation over time. If you have sufficient savings to be able to defer collecting Social Security Benefits until age 70, I believe Social Security offers the most cost-effective way to create a guaranteed annuity-like investment stream for your very old age.

Asset Allocation

A CNN Money asset allocation model suggest a mix of 65% bonds, 20% large cap stocks, 5% small cap stocks and 10% foreign stocks for someone 3 -5 years from retirement with a medium risk tolerance and some flexibility about when income is received CNN Money Asset Allocation Wizard.  This is consistent with the financial maxim that the percentage of bonds in your portfolio should equal your age.

However, T Rowe Price’s asset allocation model recommends 50% – 65% stock, 25% – 35% bonds and 5% – 15% short term liquid assets for someone about to retire at age 65.   Within the stock portion of the portfolio, TRowe recommends 15% – 19% international/global stocks, 7% – 10% U.S. mid/small cap stocks and 28% to 36% U.S. large cap stocks.   Within the bond portfolio, TRowe recommends 5% – 7% international bonds, 2% to 4% high yield bonds and 18% to 24% investment grade bonds TRowePrice Asset Allocation Tool.

I believe thinking about and consciously deciding on an asset allocation for your retirement savings/investment portfolio is one of the most important things an investor should do with their portfolio on an annual basis.   Many financial publications and mutual fund companies offer asset allocation models and it may be helpful to consider several and understand what is driving them to help you make a good asset allocation decision for your own portfolio.

My own allocation is a bit closer to the TRowePrice model with 51% equities including a small amount of alternative investments, 32% bonds and 17% short-term cash-equivalent investments.   My bond allocation includes a significant amount of tax-exempt municipal bonds and, in my mind, the higher allocation to cash offsets the potential market risk of a larger allocation to equities while allowing me to benefit from dividend yields that are in many cases higher than bond yields and from potential stock price appreciation over time.   My stock portfolio includes a healthy dose of individual income producing stocks, exposure to Real Estate Investment Trusts (REITs) through an index fund and some individual stocks and a managed bond portfolio in which I own individual bonds rather than bond funds. I see a real advantage to owning individual bonds over a bond fund because, absent a default, you can hold individual bonds to maturity and protect your principal while the value of a bond fund can fluctuate with market conditions and the actions of other fund investors.

Good Advisors

As my bio under “The Blogger” heading above indicates, I worked for 15 years as a stock analyst with Legg Mason and Stifel Nicolaus and was recognized seven times as a Wall Street Journal All-Star analyst. While I have the skills to manage my own investments I work with a full service investment advisor at Stifel, Nicolaus & Company to manage my portfolio and in recent months have shifted from a commission based to fee based compensation structure as Stifel, like many other firms, has implemented the fiduciary rule.

The focus of many investors today is on minimizing investment fees and purchasing low cost index funds or exchange traded funds (ETFs) over using full service advisors and owning actively managed funds or individual stocks. Understanding and minimizing the fees on your investment portfolio is important and there is a lot of investment analysis that passive investments have outperformed most active managers and individual stock pickers.   However, I continue to see value in a full service advisor and a degree of active management, particularly if you have a larger amount of investments.

The key advantages I see to a full service advisor/active management include:

  • Keeping all or almost all your investments in a single place.   This makes it much easier to understand and monitor your asset allocation and will be extremely helpful to your spouse and other surviving relatives if you die or are incapacitated. Some low-cost brokers and funds companies offer a broad enough array of investment options and can provide some advisory services over the phone or in person in the event of a death or impairment but not the same personalized attention as an experienced broker or fee advisor in my view.
  • Index funds may do less well in a more volatile market.   We are approaching 10 years of unprecedented low interest rates and market stimulus from central banks throughout the world.   In this low-volatility, interest/stimulus driven, broad-based post-downturn stock market rally passive investments have outperformed.  But with index funds and the entire market more highly valued and influenced by a relatively small number of mega-market-cap stocks, like Apple and Amazon, will index funds continue to outperform when and if the market and investors are tested by a significant correction and increased volatility?   I can’t predict the future, but believe there is a case to be made that the underlying assumptions that have allowed passive investments to outperform may change and again create an opportunity for value-based investing and active management.
  • You may need an active manager to buy individual bonds.   As noted above, because owning individual bonds provides greater principal protection than a bond fund, I prefer to own individual bonds.   The only practical way to do this may be to work with an active bond manager because buying bonds as individual, particularly tax-exempt issues, can be difficult. In addition, I want to hold individual bonds through a single account with my other investments for administrative convenience and to keep down overall fees.
  • A good advisor can save you from yourself.   Much has been written in recent years on the psychology of investing. One of the most difficult things for even experienced investors to do is to keep one’s nerve when the market is selling off and potentially even buy on dips.   An experienced and trusted advisor can help you keep your nerve in a market downturn and help protect you against following the herd. A good advisor can also protect you against being lazy in a good market by periodically adjusting your asset allocation and culling your portfolio in a tax-efficient manner.

I hope these ideas for evaluating and managing your financial resources for retirement are helpful and will be happy to respond to questions and comments.

I formerly worked at Legg Mason Wood Walker, Inc. and at Stifel Nicolaus & Company, Inc. and previously had some of my investment portfolio with T Rowe Price Investment Services, Inc.  I do not currently receive and do not expect to receive in the future remuneration from any of these companies.

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On the page “What Is Retirement” (see link above on the banner of this blog) I propose a new definition for retirement as “The period of one’s life when one shifts from working primarily for the means of earning income to working primarily for the satisfaction of producing a purpose or result while devoting additional time to recreation, education and leisure activities.” to replace the current Oxford English Dictionary definition of ”The period of one’s life after leaving one’s job and ceasing to work.”

Today’s New York Times has an article entitled “Working Longer May Benefit Your Health https://www.nytimes.com/2017/03/03/business/retirement/working-longer-may-benefit-your-health.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=0

While ultimately concluding that the scientific evidence is inconclusive about whether working longer benefits your health, The New York Times article says the answer tends toward yes and asserts this is true not just for more highly educated, healthier adults in more fulfilling jobs but for many types of jobs that keep the mind active and provide networks for social interactions.

The headline of The New York Times article seems to imply a choice between working full-time and full-time retirement but most of those cited in the article as working past retirement age have shifted from full-time to some type of part-time employment or consulting.    My experience, and that of many well-educated friends, shows them most satisfied in a partial retirement lifestyle where part-time work, consulting or a challenging volunteer position offers the mental stimulation and social networking opportunities that The New York Times article asserts benefit seniors’ health.    I believe seniors, their employers and society in general all benefit from meaningful part-time, consulting and volunteer experiences and that we will see more and more baby-boomer seniors in these partially-retired positions going forward.

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A Wall Street Journal article on Tuesday, July 26, 2016 entitled “Can This Brain Exercise Put Off Dementia?” hitp://on.wsj.com/2arSPfA reported on the results of a new study, called “ACTIVE” for Advanced Cognitive Training in Vital Elderly, that were presented the previous Sunday at the Alzheimer’s Association International Conference in Toronto, the world’s largest gathering of Alzheimer’s researchers.    The article immediately attracted attention within a group of my close Baby Boomer friends who have known each other since elementary school.  The New Yorker also published an article on the same study on July 24, 2016 http://www.newyorker.com/tech/elements/could-brain-training-prevent-dementia.

According the Journal “The study results showed that speed training—computer exercises that get users to visually process information more quickly—beat out memory and reasoning exercises, two other popular brain-training techniques sometimes suggested for improving cognitive function and reducing dementia. Researchers found that a total of 11 to 14 hours of speed training has the potential to cut by as much as 48% the risk of developing dementia 10 years later.”

As reported by the WSJ, the ACTIVE study, which was funded by the National Institute on Aging and the National Institute of Nursing Research, included 2,832 healthy subjects, ages 65 to 94, at six study sites around the U.S. Participants were randomized to get one of the three cognitive-training programs or be in a control group.  Since 1998 the study has received a total of $33.8M in funding and is still in touch with all but 4o of the original participants.

Prior to release of the ACTIVE results there was no evidence that computerized brain training had any effect on cognitive ability or dementia prevention.   The New Yorker cites a consensus statement by more than 70 academics in 2014 that “playing brain games has been shown to improve little more than the ability to play brain games.”  And in January of this year the Federal Trade Commission fined Luminosity, the largest and best known provider of brain games, two million dollars for making unsubstantiated claims of cognitive improvement for its games.   Thus, the large and well-funded ACTIVE study is likely to provide a big credibility boost for the use of computer mind stimulation games to combat cognitive decline and dementia.

The speed training component of the ACTIVE study used a computer game in which, for the briefest instant, two images appear, one in the middle and one on the periphery of the screen (see below).   The computer then prompts you to identify whether the central image is a little car or little truck along with which edge the second image appeared.   The more accurate you get, the more quickly the images appear and the more complex the background becomes.

Double Decision Image

Double Decision is a more user friendly version of the speed training game used in the ACTIVE research that was acquired by Posit Science, of San Francisco, in 2007 and is now part of the company’s BrainHQ online service, a cognitive-training program. A monthly subscription, which includes access to Double Decision, is $14 a month, or $96 a year. Posit Science says the company intends to file a medical-device application to the Food and Drug Administration based on the recent clinical trial findings.

After reading the WSJ article my friends and I were immediately tempted to purchase Double Decision through the Brain IQ service, as would any Boomers concerned about their future cognitive abilities.   However, our group of friends includes Mitchell Clionsky, Ph.D. who is a clinical neuropsychologist and has worked extensively on dementia testing and evaluation.   Dr. Clionsky, or Mitch as we know him, pointed out that, unfortunately, these kinds of stories hit the news with some regularity, always look really great, but sometimes aren’t.

Mitch points out that the ACTIVE research was presented at AAIC as a talk. It has never been subjected to peer review or published in a journal, which the WSJ and The New Yorker also mention. In other words, lotsa sizzle, maybe not so much steak. It also defies reason that 10 sessions of training would impact cognitive functioning 10 years later.  Finally, the 48% difference in the frequency of dementia in the ACTIVE study is the calculation of decline from a conversion rate after 1o years of 14% for healthy adults with an average initial age of 73 to a conversion rate of 8% for the subgroup undergoing computerized speed brain training for 10 hours and receiving just four more hours of training. In a large group this is statistically significant. However, it may be less meaningful when applied to individuals.

Mitch is hoping that there is something to the ACTIVE research and looks forward to a replicated study, with a more varied dosing schedule of exposure to training, and better measures of cognitive functioning 1, 2, 3, 5, and 10 years later. In the meantime, he thinks it the impact of using computerized speed training exercises on dementia are way overblown.

Mitch believes it would be better for us Boomers to take home the message: Don’t retire entirely or, if you do, stay mentally and physically active (by writing a blog, playing golf and exercising for example). Get yourself a cool gaming station and play some intense shoot em up games or other video games that require lots of visual processing and reaction time. That way, at least you will be having fun. Control your diet, keep your BMI at about 25, don’t drink too many margaritas at one sitting, take a 30 minute walk every day.

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On Monday June 6, 2016, The “Ask Encore” column by Glenn Ruffenach in the Wall Street Journal responded to a question from a reader about “what features, at a minimum, should be added to our current home or incorporated in a new home so that we can stay in our home as we get older.”   The columnist’s response identified three resources to make a home accessible and adaptable for seniors.   These included:

These all appear to be useful resources and the Wall Street Journal column cites the Harvard Study as saying five features, in particular, that make for safe and acceptable homes are: no-step entries; single-floor living; switches and outlets reachable at any height; extra-wide hallways and doors and lever-style door and faucet handles.   The Harvard Study indicates that 90% of existing homes have one of these features but that only 57% have more than one.

Research (AARP United States of Aging Survey, 2012) indicates that 90% of seniors would prefer to stay in their own home vs. moving to a seniors housing community and I have no doubt that for some seniors making adaptations to an existing home or buying a new home with adaptable feature may allow them to defer a move to seniors housing for some period of time.  However, because of most seniors’ strong bias toward staying in an existing home, I see far too many seniors resisting a move to seniors housing even when this would be more beneficial for their health, their finances and their families.

I believe it is important for a senior and her or his family to also consider other issues when considering whether to modify an existing home vs. moving to a seniors housing community. Chief among these are (1) the location of one’s existing home, (2) the age and medical conditions of the residents, (3) access to companions and support services, and (4) the cost of maintaining a home.  The key points I want to make are:

  • seniors and their families need to think through how making accessibility improvements to a home will meet a senior’s physical and mental health needs over time, not just at a single point in time, and
  • staying vs. moving should be considered in light of the full occupancy and care costs for each alternative.

Location

Location is important for the resident, her or his family and other formal or informal caregivers. Too often, seniors of advancing age become increasingly isolated in their homes because they are not located where public transportation, taxi or Uber-like services are readily available. If this is the case, as a senior’s ability to drive diminishes, which it invariably does, a senior’s ability to visit friends, see medical professionals, attend social, educational and civic events will be restricted with negative implications for their physical and mental health. If they are living alone, studies have show poor diet and social isolation can take a heavy toll. Technology may be able to reduce these isolating effects in the future but is not yet able to overcome all the location issues noted here.

Location is also important for family members and other formal and informal caregivers. If you live hundreds of miles from your children or if your home is not readily accessible in good and bad weather to formal and informal caregivers, a home modified to be accessible for a senior may still prove unable to meet a senior’s needs over time as their physical or mental health deteriorates and caregivers are needed.

Age and Medical Condition

The age and medical condition of residents is also important to consider when thinking about whether to modify one’s home or move to a retirement community. Physical limitations, such as needing a walker, shower grab bars, lever door handles can help extend the ability of an existing home to accommodate a senior. But, if a senior is 85 or older or has medical conditions that will escalate over time, the benefit of these types of improvements may be short lived and fully modifying a home for a wheelchair equipped senior – completely flat floors, wider doorways, larger baths with turning radius for a wheelchair can get very expensive. In addition, if a senior has early signs of dementia, this condition too is likely to deteriorate over time and may require a more secure setting with full time care at some point, which an individual’s home cannot provide.

Access to Companions and Support Services

The cost to bring qualified caregivers and other support services into one home can quickly exceed the cost of a seniors housing community if care is required on a 24/7 basis. It can also be difficult for a senior or their family to manage care and home maintenance services and to monitor the quality of care delivered in a senior’s home, particularly if the family does not live nearby.   The availability of qualified caregivers varies with geography, with access to public transportation and with population density tending to improve the availability of care.

Cost of Maintaining A Home

When comparing the costs of staying in one’s home vs. moving to a senior housing community, seniors and their families too often view the cost of staying in one’s home as only including the cost of making accessibility modifications and do not fully consider the cost of part-time or full-item care, the cost of taxes and maintenance, or the income that can be generated from investing proceeds from the sale of a home. This sticker shock of a $2,500 to $6,000 per month fee for seniors housing may seem a lot less daunting when one makes a accurate assessment of the costs of staying at home.   It is also important to understand that the average length of stay for an 85 + senior in assisted living is about two years, so $150,000 in home sales proceeds is usually sufficient to fund an average stay.

There is some additional discussion of housing options and issues to consider when moving to seniors housing on this blog www.robustretirement.com.  The American Seniors Housing Association also has a new website Where You Live Matters with a lot of information for seniors considering whether to stay in their existing homes or move to a retirement community, including cost calculators.    Specific posts on this website that may be of interest include:

 

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UnSenior “Seniors Housing”

Earlier this month I toured The Stories at Congressional Plaza, a new type of “seniors housing” project designed to appeal to seniors as well as those of other ages looking for a high-tech, high-service environment in an urban mixed use setting.  The Stories opened in February 2016 and is a joint effort of Federal Realty Investment Trust and Ryan Frederick’s Smart Living 360.

Federal Realty is a publicly traded REIT (NYSE: FRT) that specializes in the ownership, operation, and redevelopment of high quality retail real estate in the country’s best markets and is increasingly developing mixed-use projects in connection with its retail holdings.   Ryan Frederick has long been known as one of the leading thinkers on the future of seniors housing through his Point Forward Solutions consulting company.   Ryan has now created a new company, Smart Living 360, to work with a retail/mixed use developer, rather than a seniors housing company or health care REIT, to bring us his vision of the future of “seniors housing” in a property designed to appeal to seniors but open to those of all ages.

The Stories is a new 48 units apartment building located at 1628 E. Jefferson Street in Rockville, Maryland.   It is part of Federal Realty’s Congressional Plaza redevelopment that includes a high-end shopping center, Federal’s corporate headquarters and an existing 150+/- unit apartment building with structured parking (The Crest), now about 10 years old.   The Stories was developed on a site long designated for residential use as phase 2 of the Crest. According to Ryan, Federal became interested in consciously designing The Stories to appeal to the seniors market because they wanted a way to differentiate the projection from other high-end rental projects in the same area of the Rockville Pike, northwest of Washington and Bethesda.

The Stories is designed to appeal to the baby boomer market, now passing age 67, and other seniors with a “younger” outlook, unlikely to consider independent or assisted living or even a continuing care retirement community (CCRC).   This market is large and rapidly growing and not well served by well served by conventional seniors housing. While those 75 and up are considered part of the senior housing markets in many market studies, the average entrance age for most dedicated senior housing communities is now closer to 85 than 75 (See Slow 80+ Pop Growth, Elevated Construction Spark Concern For Seniors Housing on this blog – http://03c242c.netsolhost.com/WordPress/?p=209.

Ryan and Smart Living 360’s vision for The Stories is derived from a view of what “younger” seniors want in a living environment to enhance their wellbeing and tries to anticipate the growing role of technology for enhancing seniors’ lifestyle and delivering the services they want and need.   It is also purposefully designed to be flexible so it can adapt to the needs of its target market as they are discovered over time.

To understand what Federal and Smart Living 360 have created at The Stories, you need to think outside the traditional seniors housing box regarding design, services and technology.

Physically, The Stories is a attractive 5-story modern apartment community located in high-income, high-wealth, high-education zip code with a unit mix favoring larger 2 and 3 bedroom units (75% 2 bdrms) over one level of structured parking.   With rents from $2,500 to $4,000, The Stories is priced at about half the cost per square foot of traditional IL properties in its market.  But unlike conventional IL properties, The Stories does not bundle food service and activity programs into its rent.   It is part of a mixed-use project including retail, office and other residential uses in a nice residential area a block off a heavily travel arterial street, the Rockville Pike, MD 355.   The property faces other residential uses and fronts on a relatively quiet suburban street.

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Units within The Stories look like high-end non-age-targeted residential rental units with small balconies that are designed with largely invisible accommodations for an aging senior market – wider doorways and master baths able to accommodate a wheel chair with higher toilets, easy entry showers, modest grab bars in the bath with studs behind the wall to allow more to be installed, roll out lower shelves in cabinets, electrical outlets further up on the wall, etc.   These are accessible units that intentionally look like conventional units.

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Common areas include a large fitness room with some specialized equipment for seniors that could also be used by personal trainers or rehab therapists, a central lounge with a refrigerator and cooking equipment and a self-serve coffee bar.  
There is a small conference room that is designed so that it can also be used for a visit by a health professional or for telemedicine care.   The entire building is pre-wired for high speed Verizon Fios internet with pre-installed routers; and service providers are available to install Sonos wireless speaker systems and other electronic amenities in the units.   The electronics designed into the building are intended to accommodate increased use of patient self-monitoring and wellness devices that Ryan believes will become increasingly prevalent, sophisticated and integrated over time.

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The building offers a secure electronic entry system, with an enhanced concierge called a Lifestyle Ambassador (services described below) manning the front desk during the day. The building is monitored in the evening by management personnel from the larger Crest Apartment building that is located at the other end of the block, across a parking lot from The Stories.   The number and length of coverage by on-site personnel is partly limited by the buildings relatively small size, only 48 units.

What really sets The Stories apart as a community that will appeal to seniors is its use of a Lifestyle Ambassador, in this case a hotel industry trained and certified concierge cross-trained in seniors housing design and services.   The role of the Lifestyle Ambassador is threefold – 1. Help residents connect with one another and with the outside community, 2. Provide access to any needed services, and 3. Simplify resident’s lives by taking care of pets and plants while residents are traveling and providing other services.   Smart Living 360 makes use of many off-the-shelf on-demand services, has prearranged for a wide range of additional services to be available to residents of The Stories and will provide referrals to providers, including:

  • Transportation
  • Pharmacy
  • Physicians
  • Food Delivery
  • Financial Advisors
  • Case Managers
  • Home Healthcare
  • Personal Trainers
  • Tech Services

The goal at The Stories is to offer attractive housing, location and services to enhance the well being of baby boomers and other “younger”, generally healthy seniors without the stigma of a traditional seniors housing community with a large percentage of very old, frail people; and to do it in a flexible way that allows it residents to order in any services they may need and to adapt to rapidly evolving technology for medical monitoring and wellness.

Smart Living 360 hopes to monitor residents of The Stories over time to see if the building’s design and the flexible services it offers will enhance residents’ well being compared to those living in other residential settings. This will be done using the Gallup-Healthways Well-Being Index that measures five factors:

  1. Purpose – Liking what you do each day and being motivated to achieve goals
  2. Social – Having supportive relationships in your life
  3. Financial – Managing your economic life to reduce stress and increase security
  4. Community – Liking where you live and having pride in your community
  5. Physical – Having good health and enough energy to get things done.

What is interesting to me about Smart Living 360’s approach compared to a traditional senior housing facility is that Smart Living 360’s Life Style Ambassador begins with the residents’ wishes and customizes activities and services the resident desires while a traditional senior housing facility has a menu of services into which it tries to fit a resident. I see the Smart Living 360 approach as more resident centric, more personalized and more adaptable over time.

The Stories occupies an interesting place somewhere between non-age-restricted market rate apartments and conventional seniors housing.   Interestingly, the project was voluntarily described as 55+ housing in pre-opening marketing material but the developers have now decided to market its advantages for seniors but without the age restriction, which they believe may be a turn-off for their primary but not only target market.   Of the first several residents moving in, two are seniors and one is age 29 but liked the amenities.

It remains to be seen whether The Stories will be successful in attracting baby boomers and other seniors with a “younger” outlook and how Ryan Frederick’s vision of meeting residents’ needs and increased use of electronic devices to monitor and enhance health and wellness will come to pass.   But I believe, even at this stage, The Stories has some interesting lessons for seniors housing and multi-family developer/operators and institutional real estate investors.   These include:

  1. Non-age restricted housing and un-senior “seniors housing”, as I categorize the Stories, may be more appealing to under 80s seniors, and even those over 80 in good health with younger outlook, than more conventional seniors housing projects.   For a significant portion of the senior population today and I believe for even a larger portion of the baby boomers, living in mixed aged neighborhoods or even in mixed age buildings like The Stories may be preferable to living in a senior ghetto or in an isolated age-restricted community.
  2. We have already seen obsolescence in seniors housing communities, such as IL projects without sufficient provisions for handicapped residents, IL and CCRC projects without AL and memory care units, AL communities with insufficient common space for gyms or rehab care and IL and AL buildings with too many small units.   This history suggests that building flexible design into seniors housing communities, which The Stories has very deliberately tried to do, may be an advantage for the community over time.
  3. Seniors housing located in mixed use projects or higher density urban areas, where services and amenities are close-by, while often more difficult and more expensive to develop than stand-alone conventional IL or AL communities, would seem to offer a lot of appeal for the baby boomer age cohort and other active seniors.
  4. In an age of on-demand services, such as Uber and Foodler, planning seniors housing around services delivered by outside vendors may prove both cost effective and better able to meet seniors desires and needs than the service packages typically available in seniors housing communities.
  5. Seniors, particularly the baby boomer age cohort, are increasingly tech-savvy and should be able to adapt to electronic delivery of health and wellness services, as well as other on-demand services, and may see projects designed to accommodate more high-tech amenities as more appealing than conventional care models.
  6. The resident centric and holistic approach to meeting resident’s needs built into the Lifestyle Ambassador approach that incorporates both social and care needs, seems to offer some advantages over the way conventional seniors housing services are organized with responsibility fragmented between healthcare, activities, dining and caregiving personnel, each of whom may only see themselves responsible for a slice of a senior’s needs.   While the staff in any well managed seniors housing project should get to know the “whole resident”, making resident on-demand centric services the organizing principal of your care delivery system appears to offer some advantages and a have a better chance of assuring a residents need are met.

 

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Confessions of a Recent CCRC Mover

The question I most encounter when speaking with friends, family members and acquaintances about seniors housing is: How do you get a reluctant family member of advanced age living alone to agree to move to seniors housing? It doesn’t seem to matter if the family member is 79 or 99, there is still a strong reluctance on the part of many of today’s seniors to move to any type of seniors housing despite objective information that such a move improves socialization, nutrition and overall health and wellness, and may increase longevity.

While “How to get a reluctant family member to move?” may be the quintessential question to which families would like an answer, I find very little useful information on the web and from seniors housing organizations on how to address this question.   In order to seek an answer for myself and for those who ask me about it, I interviewed a 97 year-old friend and former neighbor who made the decision to move to a CCRC about 18 months ago.   I wanted to understand her decision to move, what finally convinced her to move and how her experience has been since moving to her CCRC.   For the purpose of this blog, we will call her Ms. F.

Ms. F is a remarkable person in many ways but I believe her decision to move to seniors housing and her experience after she arrived are still illustrative for others.   As I indicated, Ms. F is 97 years old. She moved from the large, single family home where she raised her family to a condominium in 1979, when she was only 60, partly due the health of her husband who died seven years later.     She continued to live in a full-service elevator-served condominium with a wide-range of resident ages until 2014, when she made the move to a CCRC. In her condo, Ms. F had occasional cleaning help but lived independently and drove. When living at her condo, Ms. F attended a Pilates class once a week, played 9-holes of golf regularly through 2013 and had an active social and cultural life. Ms. F is college educated, cultured, very well dressed and had enough wealth so that all housing and care options were available to her.

The discussion of a move to seniors housing started with Ms. F’s children, the oldest of whom is 74, about three years before Ms. F’s decision to move.   Her children, who live in another city at least six month of the year, were concerned about her living on her own and continuing to drive.   Ms. F indicated she finally agreed to move to a CCRC to make her children happy and because after a bout of pneumonia in the winter of 2013 she did not bounce back completely to her previous stamina.   The discussions for her to move also began after her significant-other, with whom she had a very long-term relationship, died.

Ms. F’s reluctance to move to a CCRC or another type of seniors housing primarily arose from the fact that moving to such a facility would require her to “admit she was old”, something she had never really done despite being 95 at the time of her move.   Ms. F, like many in the current generation of Roaring Twenties Babies in their 80s and 90s, also saw moving to seniors housing in a negative light because it indicated to her that she could no longer live on her own and she saw it as giving up some of her independence.

One of the key lessons I took from Ms. F’s experience is that us Baby Boomers, the children of today’s 80 and 90 year-olds, tend to see their parents as very old, frail people in need of care while many seniors do not view themselves as old and cherish their independence. This suggests that any conversation about a move to seniors housing should not begin with the senior’s frailties but how such a move could enhance and prolong independence.   It would be better for us Boomers to approach these discussions thinking about the attributes of senior housing that we would find attractive because a seniors’ view of him or her self, if still healthy and not cognitively impaired, sees 80 or even 90 as the new 60.

The other clear lesson from Ms. F’s experience, and that of other seniors and their families that I have observed, is that the decision to move to seniors housing, if made voluntarily, is often a prolonged process that can stretch to a year or more. It is also important to realize that senior housing facilities offer a broad range of housing and lifestyle choices and may involve trade-offs between housing and lifestyle amenities, something that seniors and, in many cases, their children may not understand.   Visits and short-term stays, which many facilities offer, can help a senior and their families get to know a facility well before committing to move.

It is also worth noting that a mixed-age full-service condominium served Ms. F very well as a housing choice for 35 years, from the time she was 60 until she was 95.    With the growing availability of smart-phone accessed transportation, grocery and food delivery and home care services, it is important for the seniors housing industry to realize that well-designed, mixed-age apartments and condominiums can be a very viable option for many seniors and that seniors may prefer such options that don’t require them to “admit they are old”.

Ms. F and her family did not undertake an exhaustive search of senior housing facilities because they were looking for something high-end and were familiar with many of the choices because Ms. F, at 95, knew people living at a number of the likely choices.   The facility Ms. F chose was relatively close to her condominium, offered extensive educational and cultural programming, which appealed to her, and had friendly and welcoming staff.   The downside of the community Ms. F chose was that it dates from 1984 and did not offer some of the amenities within its units and common areas of other facilities that were newer or which had undergone extensive renovations.   Ms. F looked at a number of different units before she found one on an upper floor that had enough natural light to make it appealing. Ms. F moved from a modern three-bedroom, two-bath condo with larger windows and lots of light to an oversized one-bedroom, one-bath senior housing unit.   She believes the size of the unit is fine but would prefer a larger bath and a separate powder room for when she has quests.     Ms. F’s focus on a welcoming staff, light in units and other factors dovetail well with industry studies of independent living customer satisfaction.   (See my blog on Finding Happiness In Seniors Housing http://03c242c.netsolhost.com/WordPress/2015/08/20/finding-happiness-in-senior-housing/).

It is worth noting that the CCRC to which Ms. F moved is about to undertake a major expansion and renovation that will add larger independent living apartments in response to demand, add a memory care section and renovate public areas to update the look and add casual café-style dining in addition to the formal dining room.

Ms. F’s transition to a CCRC has been relatively easy for her. She only knew one person well at the CCRC when she moved but Ms. F was able to make friends quickly.  Today Ms. F gets around without a walker but does worry about falling and is careful when she walks. Ms. F was still driving at the time she moved to a CCRC but not long after she arrived she had a minor traffic accident and decided to give up driving.   However, using the CCRCs and private transportation services, Ms. F still gets to her Pilates class once a week and to cultural events (She will be traveling to New York soon to see Hamilton) and she has added personal fitness training at the CCRC and is attending many of the programs that the facility offers, including a current lecture series on the Supreme Court planned before Justice Scalia’s death.

I believe Ms. F’s attitude toward her move to a CCRC also eased her transition.   Rather than focus on the space she was giving up and the things she was leaving behind, Ms. F chose to view her move as an opportunity.   She got help from a decorator to design and furnish her new home, bought some new things and recovered some of the furniture she chose to move from her condominium.   So she made it a new beginning rather than a move down.

Ms. F is very positive on her CCRC now that she has moved and agrees that she may have benefitted from moving sooner. But Ms. F doubts she could have made the decision to move until she started to notice herself slowing down following her pneumonia, had lost her significant other and was ready to admit she was old.  One of the benefits she sees at the CCRC is knowing other couples that are older than her but still mentally active and able to get around.   Her close friends at the facility include a couple that are 102 and, while he uses a walker, are still in very good health and very alert.

Top on Ms. F’s list of what makes her CCRC a good place to live are:

  • Activities/Programming – special events (St. Patrick’s Day and Easter Dinners for example), movies including first run movies such as Spotlight and Brooklyn, Lectures that cost residents $25 and outsiders $125, religious services, entertainment every Wednesday and other events like a forum for local mayoral candidates.
  • Volunteer Opportunities
  • In-House Exercise Programs and therapy
  • Housekeeping Services that include weekly linen service, biweekly cleaning and an annual complete unit cleaning as part of the base rate and PAL service that for $21 per hour provide additional light cleaning, laundry and making the bed.
  • Friendly Staff who know you by name and friendly residents. Many of the staff are African American high school students interested in careers in healthcare or food service/hospitality industry that the facility trains.
  • Someone Looking Out For You – It is comforting knowing there is always someone there for you. The facility has an electronic monitoring system that can tell if you are not up moving around your unit by a certain time and uses other checks such as attending meals and taking in your paper to check to be sure you are all right, as well as emergency alert system.
  • A Healthy Future – Ms. F can see that she is not the oldest and certainly healthier than some others.
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Finding Happiness In Senior Housing

Three things came together to spark this blog:

  • A January 17, 2015 New York Times article entitled “Mean Girls in the Retirement Home” (http://nyti.ms/1KStZ4j),
  • A 2014 study by the American Seniors Housing Association (seniorshousing.org) entitled Unlocking the Mystery Behind Very Satisfied Independent Living Customers – Make Them “Feel at Home” and
  • A dinner conversation with a couple who are friends and former neighbors about choosing among several retirement communities in Boston, where they plan to relocate to be closer to their children.

The New York Times “Mean Girls in the Retirement Home” article documents the presence of cliques in senior housing communities that sometimes make it very difficult for a new resident to fit in.  Some new residents face outright hostility from existing residents who are already part of well established social groups.   It also documents the steps taken by a 97-year-old new resident and her daughter to help the new resident fit in and make friends.

ASHA’s “Feel at Home” study of very satisfied independent living residents also identifies cliques as a problem in established senior housing residents but it goes on to study factors that are most important for making a senior housing resident feel at home and be very satisfied in an independent living community.   The ASHA study is intended to help operators of independent living communities make their residents feel at home and boost satisfaction levels, resident retention and resident referrals, all of which can have a meaningful impact on the bottom line.

Last month, as I spoke with my friends in their late 80s about their move to a senior housing community in a new city, it occurred to me that the New York Times article and, particularly, the ASHA study can provide potential senior housing residents with an excellent list of what will be most important in making them happy in senior housing and a data-driven check list of what to look for as they consider various communities.   This blog attempts to reformulate the ASHA study into a compact guide to happiness in senior housing for potential residents.   My thanks to David Schless, Executive Director of ASHA, for giving me permission to use the study results in this manner.

What’s Most Important For Happiness?

How frequently and how strongly a senior housing resident feels at home accounted for nearly half of the overall satisfaction of senior housing residents in a 2012 ASHA study.   The 2014 study explored what caused independent living residents to “Feel at Home”.   ASHA’s “Feel at Home” study was based on a survey of 6,858 predominantly rental independent living residents in 11 metropolitan areas who completed a 55 question survey.   ProMatura Group, a well-respected survey research firm based in Oxford, MS that specializes in senior housing and care research, conducted the survey, evaluated the survey results and authored the ASHA study.  I want to thank Margaret Wylde Ph.D., CEO of ProMatura Group and her staff since for this blog I have borrowed liberally from the ASHA study, which was the product of their work.​

 

ASHA Feel At Home Graph

Key factors contributing to “Feel at Home” identified in the 2014 ASHA study include satisfaction with private residence (32%), camaraderie with others (31%), sense of control (14%) and staff know them well (5%).  Other items contributing less that 5% of “Feel at Home” included:

  • Number of friends in the community
  • Decorated residence the way they like
  • Know the things they need to know about the community
  • Quality of daily activities and programs
  • Dining program
  • Dining schedules
  • Frequency of seeing friends outside the community
  • Transportation provided by the community

What To Look For When You Visit?

ASHA’s “Feel at Home” study and this blog focus on satisfaction of independent living residents.   Someone moving to independent living is about 85 years old, is moving from their a private residence they have occupied for an average of 19 years, usually a single family home, and is healthy enough to live with minimum outside help with the activities of daily living (See Senior Housing Options above for a more detailed description).   The prospective resident is typically active in making the decision about whether and where to move.

Private Residence – Most senior housing communities are designed to wow you with their façade, grounds and the common areas you see just inside the front door, what marketers call “curb appeal”. While the ASHA study indicates the quality of common areas contributes to resident satisfaction, the study indicates attributes of the private residence are more important to residents feeling at home and being very satisfied.   Key factors in making a private residence satisfying include:

  • Unit size – Just like with Goldilocks, the most satisfying independent living residence was not too big or too small, with 841 sq. ft. on average being “just the right size”.
  • Decor and Storage Space – Being surrounded by familiar things, having a décor that you liked and the ability to store possessions where you can access them were important for overall satisfaction with one’s private residence.
  • Natural Light – In the ASHA surveys more than half of the “I’m Home” customers strongly agreed with the amount of natural light in their residence, so looking for multiple windows that allow for plenty of natural light is a feature prospective residents and their families should consider.
  • View from the Windows in Private Residence – Along with natural light, “I’m Home” customers were likely to have a nice view from the windows in their private residence.   More than half (54%) of “I’m Home” customers strongly agreed they enjoy the view from the windows of their residence.   A view doesn’t have to include beaches, mountains, parks or rivers; a nice view can be as simple as a tree, a small garden area, a fountain, or a bird feeder.

Camaraderie With Others – Camaraderie with others was nearly tied with “satisfaction with private residence” as the most important factor making senior housing residents feel at home and very satisfied.  Other factors, such as having close friends and the number of friends also contributed to residents’ satisfaction.   Gauging how well you or a loved one will fit in at a senior living residence can be difficult to do during a visit. Things you can ask about or do during a visit for how welcoming a community will be include:

  • Warmth of Greetings – Make it a point to notice if you are greeted warmly by staff and other residents.
  • Cliques – Ask staff specifically about the presence of cliques in the building and the specific measures staff takes to address cliques and the off-putting behavior that may be associated with them.
  • Steps To Help New Residents Fit In – A senior housing community cannot impose friendships on new or existing customers, but staff can and should facilitate that eventuality. According to the ASHA study, staff from the very beginning of association with a new customer need to learn who they are, what they like, identify and help them form links with other customers. Items noted in the ASHA study that might help include staff sponsoring house warming coffees for a small group of residents in a new resident’s unit after they settle in and having a mentor from among the existing residents help acclimate newcomers.  You should ask what specific steps each community takes to help new residents fit in.
  • Cultural Fit – Try to assess how you or your love one’s economic and social background compares with that of other residents and how the future resident’s age and physical and mental capacity match up. New residents that are on the slightly younger side, more mentally alert and better dressed may find it easier to fit in according to the New York Times article.
  • Interests – What are your interests and are there any others at the facility that have similar interests or some other connection that might make it easier for you to make one or two friends.
  • Try It Out – You should definitely try the dining and do it in the residents’ dining room not in a private dining room while meeting with the marketing staff.   This will give you an ideal of the quality of the food and how it is served as well as how receptive existing residents are to newcomers. Many senior housing communities also allow for short-term respite stays or give prospects a chance to try out the community.   This may offer a better way to assess your compatibility with a community than a visit or two of a hour or so.   You may also want to visit in the evening to see what staffing and the activity level is like after prime viewing hours.

Sense of Control – Sense of control was about half as important to resident satisfaction and feeling at home than a resident’s unit and camaraderie with other residents but did matter. Factors affecting a sense of control included:

  • Information – Knowing where things are, how things work and what is going on can be important for residents to feel in control.   The orientation and communication process between the building and its staff with residents is worth asking about. Sales counselors should explore the social preferences of prospects and ensure they understand the communal nature of the community. They should discuss group activities, dining, and the many interactions with others that occur during a typical day.
  • Scheduling Flexibility – New residents moving from a private home where they may have few visitors to a senior housing community with scheduled meals and activities and its own daily routine can experience a loss of control   Flexibility on meal times, when to get up and go to bed and options for transportation and activities can contribute to a resident maintaining a sense of control.
  • Options – Not Requirements – Residents should be encouraged to be out of their residences and participating in activities but should feel that have the option to pass on activities that aren’t of interest.

Staff Knowing Residents – How well the staff knows a resident accounted for about 5% of residents feeling at home and being very satisfied.   You should get a sense of staff interaction with residents during a visit and should explicitly ask existing residents if they believe the staff know them well.

Strategies For A Successful Transition and Finding Happiness

To ease the transition and find happiness in a move to a senior housing community, the studies suggest the following:

  • Recognize The Move Will Be Stressful – It is important for a senior moving into a community and their family to recognize that such a move is a major transition and will be challenging and somewhat stressful under the best of circumstances.
  • It Will Take Time To Adjust – Very satisfied residents who “Feel at Home” have an average tenure of four years, versus three years for those that sometimes feel at home and two years for those who don’t feel at home. So the longer a resident lives in a senior housing community, the more likely they are to “Feel at Home”.   Give yourself some time to adjust and stop missing your former home.
  • Identify Some Positives – Despite the magnitude of the change, there are usually real advantages for a senior previously living on their own.   These include: greater social interaction, better nutrition, more physical activity and potential greater freedom of action if you take advantage of community provided transportation and support services.
  • Incorporate Familiar Items – A resident’s own furniture and other familiar and personal items can help make the new residence “Feel At Home”.
  • Visit Often – The quality of visits by family members is important to overall satisfaction and can help ease the transition and the feelings some new residents may have of being isolated in their new surroundings.
  • Get Out and About – Opportunities to visit places and friends outside the community is also an important factor differentiating very satisfied residents.   Excursions with family members or friends, using transportation offered by the community, or Uber or taxi may all be beneficial in easing a transition to a new senior housing community.

 

 

 

 

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Relationships Key to Happiness In Retirement & Seniors Housing

I spent a recent weekend on the Rhode Island shore with a eight friends I have known for over 40 years and several of their spouses/significant others.     We try to get together every two or three years and it is amazing how quickly we are able to reconnect and how reminiscences we have all been over many times before are still a pleasure to hear.

This weekend experience reminded me of the importance of relationships – with a spouse or significant other, with your children and family and with friends and neighbors – for happiness.     I believe the importance of relationships in making us happy is too often overlooked when seniors contemplate a move from work to retirement, in relocating to a new location for all or part of the year, and in thinking about and executing a move to a seniors housing community.

Relationships In Retirement – One important aspect of moving from full time work to full time retirement is that many of our friends and social relationship revolve around our work.   We all have business colleagues inside or outside our organizations that we interact with socially as well as professionally for lunches, dinners, conferences and meetings, charity events, golf and other activities.   These relationships are hard to maintain when you no longer see these colleagues on a regular basis.   If you want to maintain these relationships you, as the retiree, will have to work hard to maintain active contact with former colleagues.

Even if you make the effort to keep connected with former colleagues, many of these work-connected relationships will slip away when you retire because you simply won’t be moving in the same circles as former colleagues.   To supplement these relationships, you need a plan of action to build alternative social relationships, particularly some that are intellectually stimulating.

Once you do retire, some of the most significant challenges you encounter in your social relationships may involve your spouse, significant other, children and other family members.   The relationship with your spouse, if you are married, may be the most important post-retirement relationship you have.   But the nature of your relationship with you spouse may change dramatically as one or both of you has more time at home and you negotiate new responsibilities on household chores, financial management, planning vacations and social activities.     It is important to anticipate and discuss these changes in advance and to maintain an active dialogue as you settle in to your post-retirement lifestyle.

Relationships with children are another important aspect of happiness for retirees but can also create challenges.   Children may live far away, may want more of your time for childcare than you want to give or may not want your advice or help now that you have more time to offer it. For many of us baby boomers our retirement may coincide with our children marrying, getting traction in their careers, establishing families and generally feeling more independent from parents and less in need of parental advice. It is important for the parent/retiree to be sensitive to these changes in roles and to adapt to changing conditions.   It is also important to let your children know if you believe they are claiming more of your time for childcare or other responsibilities than you want to give.

Relationships As We Age – Another aspect of relationships that I believe is very important for happiness and underappreciated as we age is the loss of connectivity to others as your mobility and that of friends is reduced, you or friends relocate to new locations or a spouse or other close friends die.     Many seniors face a gradual narrowing of social relationships and human interaction for the reasons just noted.     Most of the literature that discusses a senior moving to senior housing, including a July 10, 2015 New York Times article entitled “Team Effort In Making Decisions on Elder Housing” focus on a senior’s cognitive and physical abilities, as well as financial considerations, in determining when a move from a home to seniors housing is appropriate.   I believe an equal or more important reason to consider seniors housing, and one that I believe is a good predictor of future health, is a senior’s social network and level of social interaction.   If a senior has lost a spouse, has a shrinking network of social relationships and has very little interaction with peers, family or friends when living at their home or apartment, I believe a move to seniors housing should be actively considered as a way of putting a senior in a position to re-establish meaningful social relationships and interactions.  It may be appropriate to adopt for seniors the same rule I recently saw advocated for children – if they are spending more than two hours a day in front of a screen, be it TV, PC, videogame or tablet it may be time to examine their level of social interaction consider intervention.

I believe there are also practical advantages to discussing a senior’s potential need for seniors housing in terms of social interaction, rather than cognitive or physical limitations.   In the discussion of social interaction, there is a presumption and a focus on a senior being alert, active and in need of human interaction rather than a focus on declining mental and physical abilities.   A move to a senior housing community to make new friends and increase social interaction is a much more positive discussion than a move to prevent falls or keep a senior from harming themselves through mental lapses.   It is also a discussion that can and should happen sooner in a senior’s life when they will gain much more out of a move to a seniors housing facility and before a life incident forces consideration of a move under crisis conditions.

In a future blog, I will discuss the challenges to fitting in and establishing positive social interaction after a move to seniors housing based on some recent industry research.

 

 

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Downsizing

My experience indicates there are two times in the lives of many seniors when downsizing is most likely to be considered.   The first occurs in one’s late 50s or 60s after the kids have left home and the second in one’s late 70s or 80s when care needs may dictate a move to a more manageable setting with greater options for care and support.   The first move may start with or incorporate a second home or may only involve a move of a primary residence.

Thanks to the creativity of America’s homebuilding and seniors housing and care industries and the substantial buying power of affluent seniors there are a wide array of housing and location choices for seniors to consider.     In this blog post I focus on the first downsizing move, that undertaken by many in their late 50s or 60s.   See the section of this blog on seniors housing and care for a discussion of moves to supportive environments at a later age.

Let me start with my own downsizing decision.   When I was 55, and my wife a year younger, we moved to a 2,700 sq. ft. three bedroom condominium from our 3,300+ sq. ft., cedar shake, four bedroom home in a well established neighborhood where we had lived for over 12 years and raised our son. Our decision to downsize was driven by my belief that there would be strong demand from baby boomers as they aged for well-located condominiums and we it would be better to buy ours before competition from other boomers increased prices.

The condominium we selected is in a mid-century modern highrise building designed by Mies van der Rohe.   We found our downsized home after a about a year of looking for a condominium and a couple attempts at bidding. It took this long for us to understand our options and think through the location and environment we wanted. We looked at both townhouse type and multi-story condominium units in a variety of neighborhoods.

When we began looking for a smaller home in the Baltimore market we found that while 1,500 to 2,000 sq. ft. two bedroom condos are very prevalent there are relatively few large units better suited to baby boomers downsizing from a single family home.   Our key criteria for a downsized home included:

  • Having everything on one floor
  • Three bedrooms, one for us, one for a guest room and one for an office
  • An accessible location, near restaurants, medical care and public transportation
  • Enough space to entertain
  • Covered parking
  • Security

In the end there were relatively few units that met all of our criteria. We could choose between a number of high-rise buildings near the established neighborhoods where we had lived for many years and new and converted buildings on or near the waterfront in downtown Baltimore.   We also found some very nice detached and luxury townhouse units but some of these were bigger than we needed and were not in accessible locations. We opted for a multi-story condominium building closer to the established neighborhood where we previously lived rather than a building near the water because it was closer to friends and, while the water was nice, it came with about a 50% price premium for a unit of similar size.

The building we choose offers one story living, has a doorman who can deliver your groceries, dry cleaning and packages, is on a bus line and is walking distance to restaurants, some shops and The Johns Hopkins University’s Homewood campus with its library, book store, cultural and sporting events and green space. It is a home where we should be able to live for many years, even if we become less mobile or have to give up driving.

Mistakes, from my perspective, I see others making in downsizing include choosing:

  • Multi-story townhouses when the ability to negotiate stairs could become an issue in future years, if even for temporary periods
  • Locations where no public transit or even decent cab or ride service options, like Uber or Lyft, exist
  • Locations remote from family, friends, social and cultural activities and medical care
  • Designs poorly adapted to aging even when offering first floor master bedrooms, such as laundry rooms on another floor or just enough stairs to make the home inaccessible for wheelchairs without expensive and unsightly renovations

Even though baby boomers in their 50s and 60s may be in very good health, able to drive and have few cares about temporary or ongoing physical limitations, I would not purchase a downsized-home in which it may be difficult to age with but I welcome your views.

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