F6 NY THE NEW YORK TIMES, THURSDAY, SEPTEMBER 12, 2019
We were so confused.
My wife’s mother was going through
medical issues that could potentially have
left her needing long-term care. But we had
never taken a hard look at our options if
that happened. She lives 2,000 miles away,
and we all had to start thinking about what
the next steps would be if things did not go
well with her. And we had no idea where to
start.
We didn’t even have the vocabulary:
What’s the difference between assisted liv-
ing and a nursing home? So we began to
study, and visited an assisted living facility
near our home to get a sense of our options.
In our ignorance, we were like a lot of
other people. Few of us are prepared, or
even want to think about, the options for
our parents — or, especially, for ourselves.
“Even the most sophisticated people
have no idea what these things mean,” said
Daniel Reingold, president and chief execu-
tive of RiverSpring Health in New York.
And yet, he noted, while aging happens
gradually, the need for long-term care can
arise suddenly. “Frequently, the decision-
making process comes in a crisis,” like
when a parent falls or begins to wander the
neighborhood, he said.
It’s easy to see why people don’t plan
ahead. Infirmity and mortality are frighten-
ing. Ruth Katz, senior vice president of pub-
lic policy/advocacy at Leading Age, an in-
dustry group representing nonprofit senior
service providers, said, “People don’t like,
in the prime of their lives, to think about the
possibility that you’re going to need help
doing very personal things,” including go-
ing to the bathroom and getting out of bed.
Research from the Department of Health
and Human Services suggests that more
than half of Americans now turning 65 will
need long-term care and services, and one
in seven adults will have some kind of dis-
ability for more than five years. Infirmity,
then, is predictable, and is, at least, some-
thing we should plan for.
But then there’s the cost. “People think
they have an issue paying for a college edu-
cation — wait ’til you see how much long-
term care costs,” said Nicholas Castle, a
professor in the School of Public Health at
West Virginia University.
The Health and Human Services report
says someone turning 65 today will pay, on
average, $138,000 for their long-term care,
with families paying about half the cost and
the rest picked up by public programs and
insurance. The average cost of living in a
private room in a nursing home is more
than $90,000 a year, which beats even Sarah
Lawrence.
This, then, is an introduction to the basics
of long-term care, to help you start your
own search more informed — whether you
are planning for the care of a parent or your-
self.
STAYING HOMEWhen trouble strikes, what
most people want is to stay at home as long
as possible, with assistance from family or
paid assistance that can include a home
care aide or nurse. That option can even in-
clude retrofitting the home with features
like ramps and grab bars. (Health insur-
ance and Medicare might pay for some ofthose services, for a certain amount of
time.)
INDEPENDENT LIVINGSome people decide to
move to independent living complexes,
which can offer a sense of community and
activities while letting somebody else take
care of some of the irritations like lawn care,
housekeeping and cooking meals.
ASSISTED LIVINGFor those who find them-
selves unable to live independently, howev-
er, and need help with activities of daily liv-
ing — which can include help with getting
dressed, going to the toilet and sorting med-
ications — this is an option.
It can have much of the look and sensibil-
ity of independent living but with a higher
level of care and monitoring. Many of these
facilities also offer what’s known as memo-
ry care for people with cognitive impair-ment like Alzheimers and other forms of de-
mentia.
NURSING HOMES These facilities provide
round the clock care for people with more
serious health conditions. Many people re-
sist the idea of nursing home care, though
the facilities are regulated under federal
law, unlike assisted living facilities, which
are regulated under a patchwork of state
laws and vary widely. Nursing homes gener-
ally qualify for a substantial degree of cover-
age under Medicare.
For many people, nursing homes can be
the best option, Ms. Katz said. “Friends will
say to me, ‘I think it’s time for my mom to
move into someplace where she will get
some help — I don’t think she needs to go
into a nursing home. She only needs as-
sisted living.’ I want to ask, ‘What do you
mean — and what do you thinkyou mean?’ ”
Some facilities known as continuing care
retirement communities offer a blended ap-
proach, which allows residents to take on
additional services as they need them. It can
be an expensive option, with costs rising as
the level of care rises.
Professor Castle of West Virginia Univer-
sity recommends careful shopping, with vis-
its to facilities and an eye out for hidden
costs. “It’s a bit more complicated than buy-
ing a car,” he said. And, he added, a family
might need care quickly, “but the correct
care might not be the correct care for the
next two or three years.”
Then there is the question of whether the
kind of care that’s needed is even available
where you live, especially in rural areas
where options can be few. “You can have
some of the best nursing homes around in
your location, and it doesn’t mean they’re
going to have a bed,” he said.
When planning for parents, it’s important
to ask what they want. My mother-in-law
told us that she had worked as a nurse in a
nursing home, years ago, and the experi-
ence was a sad one. “I don’t want to be in a
place like that,” she said, though she ac-
knowledged that many facilities have most
likely upgraded since then.
She did not want to move out of her home
unless she absolutely had to. Ultimately, she
was able to get by with some help at home
for a number of weeks until she had fully re-
covered. Still, the research we had done was
helpful; we felt that we could confront the
future with a little more confidence the next
time these questions came up.Deciphering Long-Term Care
The choices are numerous, and
confusing. Here is some guidance.
By JOHN SCHWARTZ‘Even the most
sophisticated people
have no idea what
these things mean.’
JEAN-MANUEL DUVIVIERGary Bass was 17 when he joined the Ma-
rines. “I really wanted to get out of my small
town, and make a difference in the world,”
he said.
Mr. Bass, who grew up in Central Point,
Ore., went on to a 30-year career in the Ma-
rines. He became a sergeant major — the
highest enlisted rank in the corps — and,
among his assignments, served for four
years as a recruiter in the Seattle area.
There, he saw many other young men and
women enlisting for reasons similar to his.
“They joined because they were patriotic,
and because they wanted to be part of
something larger than themselves,” he said.
“They weren’t joining because of the retire-
ment benefits.”
And yet, over the past year, that is exactly
what many Marines — as well as members
of every other branch of the United States
military — have been talking about.
In the past year, the military’s retirement
plan has undergone its most comprehen-
sive change since World War II. The old sys-
tem — a defined “cliff vesting” pension plan
— is out. The new plan — a defined contribu-
tion plan known as the B.R.S. (Blended Re-
tirement System) — is in.
This means that those in uniform will be
participating in the kind of 401(k) plan fa-
miliar to many American civilian workers.
Service members can now make automatic
savings contributions from their base pay,
which the government will match up to 5
percent.
Those who make a career out of the mili-
tary will still receive a pension after 20
years, but a smaller one, down to 40 percent
of their pay from 50 percent (based on an
average of their last three years of service).
“It’s a huge change, the biggest change in
the military retirement system we’ve had in
generations,” said Ted Digges, executive di-
rector of the Penn Mutual Center for Veter-
ans Affairs at the American College of Fi-
nancial Services. “And it’s fraught with op-
portunity and risk for both the individual
and the D.O.D.”
Most agree that it was time for a change:
In terms of employee compensation, the old
military retirement system was as outdated
as a cavalry charge.
“It was an all-or-nothing thing,” explains
Mr. Digges, a retired Navy captain and an
adjunct professor of management at the col-
lege. “Eighty percent of those that serve
don’t get anything, because they don’t stay
for their entire career. Only about 20 per-
cent make it to the finish line and get the
pension.” (This all-or-nothing vesting was
why it was called a “cliff” plan).
Under the new plan — instituted by the
Department of Defense and approved by
Congress as part of the 2016 National De-
fense Authorization Act — someone who
joins today would be vested after two years.
That means they could leave the military af-
ter one or two terms of service — typically
two to six years, depending on the branch —
and like civilian workers who switch jobs,
essentially roll over their military 401(k).
Under the B.R.S., for example, an E-4
(the equivalent of a corporal in the Army or
Marines) who contributed the maximum 5
percent (matched by the government)
through four years of service would leave
with about $9,000. That would be the begin-
ning of a nest egg for someone likely to be in
their mid-20s. It would be accessible at 59½,
like 401(k)’s in the private sector.
Under the old system, that same person
would have received nothing upon leaving
the service.
“The days of the fixed-income pension in
the corporate world are long over,” said For-
rest Baumhover, a former Naval officer and
certified financial planner in Tampa, Fla.
“This is the military catching up to what
corporate America has been doing for over
a generation.”
It is also the Defense Department lookingat actuarial tables.
“My grandfather died seven or eight
years after he retired from a 30-year career
in the Army,” Mr. Baumhover said. “I retired
from the Navy at 41. I could conceivably
have a pension for 50 years. That’s not sus-
tainable for the U.S. government to have an
entire generation of retirees with 50-year
pensions. You start asking the same ques-
tions we’re asking about Social Security.”
Some in the military, however, are asking
questions about the B.R.S.
“A lot of the older generation look at it as
an erosion of benefits,” said Ryan Guina, a
former member of the Air Force whose
website and podcast “The Military Wallet”
focuses on personal finance and benefits for
military members. “When they see the 50
percent guaranteed pension drop to 40 per-
cent, they see that as a threat to military
benefits in general. And I can understand
that point of view.”
However, Mr. Guina added, the federal
government’s Thrift Savings Plan — the
401(k) part of the new retirement package
— will provide benefits to far more mem-
bers of the military than the old plan. “It
would have been a good benefit for me,” said
Mr. Guina, who left the Air Force in 2014 af-ter six and a half years of service and re-
ceived nothing. “Had I been under the
B.R.S., I would have had six and a half years
of matching contributions.”
While there is a 5 percent maximum con-
tribution level in the B.R.S., there is also a 1
percent automatic minimum contribution —
a hedge against that 18-year-old who en-
listed for duty, country and adventure, not to
stow away their pay in a long-term savings
account.
“That 1 percent is to protect young Ma-
rines who don’t invest in their future, be-
cause they think their future is limitless,”
said Mr. Bass, who helped interpret the new
B.R.S. for recruits before he retired from the
Corps.
To ensure that members of the military
understood the new system, and to provide
a transition from the old one, the Defense
Department instituted a one-year opt-in pe-
riod that ended on Dec. 31, 2018. Those al-
ready in uniform that calendar year were
given the option to stick with the old plan or
sign up for the B.R.S.
Online calculators and tutorials as well as
one-on-one financial counseling were also
available. According to the Defense Depart-
ment, more than 400,000 service members
chose to opt in. In addition, 150,000 new
service members were automatically en-
rolled.
While Mr. Digges agrees that for those
who are not committed to making the mili-
tary a career, the B.R.S. is a sensible plan, he
is concerned about the larger issue of de-
fined contribution plans.
“In the 30 years or so since the private
sector shifted to 401(k)’s, few Americans
have prepared well for retirement,” he said.
“Will service members succeed where so
many other middle-class Americans have
failed?”
His other worry is about the effect the
B.R.S. might have on the all-volunteer force.
“We’ve lessened the financial incentive to
get to the 20-year finish line,” he said. That,
he said, could result in a loss of highly
trained, experienced service members who
might have made a career out of the military.
Mr. Bass, who retired under the old plan in
2017 and now works at a military school in
Harlingen, Tex., has a son and a daughter in
the service: Archie, 25, is a first lieutenant in
the Marine Corps, and Allison, 23, is an en-
sign in the Navy.
In 2018, the year he had the choice to opt
into the new system, Lieutenant Bass
elected to stick with the old pension plan.
“He intends to make a career out of it, and
thought that was a better financial decision,”
his father said. “Allison is under the new one.
It will be an interesting contrast as they go
forward in their careers.”The Military’s New Option
Service members get a retirement
plan familiar to many civilians.
By JOHN HANCTrading in an ‘all or
nothing’ system comes
with trade-offs.
CALLAGHAN O’HARE FOR THE NEW YORK TIMESGary Bass had a 30-year
career in the Marine
Corps, rising to sergeant
major — the highest
enlisted rank. He is now
commandant of cadets at
the Marine Military
Academy in Harlingen,
Tex.