With Mort Mazor, Contributor to the Sun Sentinel, Author, Teacher, and Vice President of several civic organizations
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This week, Steve spoke with Mort Mazor, a 95-year-old author, teacher, and civic activist, about the rising cost of living for the elderly. Mort has recently written a number of articles sharing his own experiences as a member of the elderly population.
The Sandwich Generation
Around 80% of the elderly population is outliving their assets. A large chunk of the 80 years and up population is struggling to pay for the things they need.
People are just not prepared to cover the expenses that pile up after the retirement. It’s really a good idea – even necessary – to start planning for life in old age around 30. Caring for children is another and sometimes unexpected cost. Then, as these individuals get older, their parents often need help financially. This results in something called the sandwich generation. These people are “sandwiched” in between needing to help their kids and then their parents. Often, they’re caring for their kids, saving for college educations for them, and then a relative hits an age where they need significant help. Financially, they may be too tapped out to save much before they hit retirement age.
Independent Living And The Importance Of A Nest Egg
Independent living facilities are a popular option for many in the elderly community. Each facility’s plan for independent living is a little different. It honestly depends on the services you’ve set up to receive ahead of time. For someone in their 90s, cooking meals might not really be on the table; a prepared breakfast and dinner is probably a good thing. In the case of residents who can and want to prepare their own meals, at least a small kitchen is usually located in the apartments, along with a cafeteria on the property for prepared meals.
Let’s talk cost for a second. For a decent independent living facility – which would include activity areas (maybe a hall for bingo, an exercise room, etc.) and trained medical staff (usually nurses) for people who need a little more help, you’re looking at least a few thousand dollars per month in rent. If it’s a couple, it might be a slightly larger apartment, so the rent would be higher. Also, keep in mind that the rent goes up the longer you’re there.
That’s why it’s really important to start planning and saving early. You need to develop a good nest egg for when you retire. Social security should be there, but with the national debt being what it is, plan now like you won’t have it. Also, there may be things like pensions or 401(k)s. These are good. If you’ve owned a home and are able to sell it to move to an active adult community, this will help too. But these things won’t necessarily set you up for the rest of your years after you retire. Hook up with a financial planner and start making some wise investments.
Assisted And Skilled-Care Living
The next level of care would be assisted living. This involves typically smaller apartments. It comes, however, with a full-time nursing staff and trained aides that are available to assist residents with whatever issues they may have. Remember, though, that because of the trained and available medical staff, assisted living costs more. In some facilities, a physician may be available as well. These places will cost significantly more.
Then, there’s skilled-care living. This is what most would think of when a “nursing home” is described. This is a residential facility where residents need a substantial amount of help just to get from one day to the next. Many residents in skilled-care living are bed-ridden. If they aren’t, they’re likely dependent on walkers or canes and take a daily regimen of medications. They aren’t capable of getting through a day without a skilled medical staff to help them. This is the most expensive type of living situation.
Costs
Again, a decent independent living facility is going to run residents a few thousand dollars per month, usually anywhere from $2,000 to $5,000, depending on their living requirements.
Assisted and skilled-care living is going to cost significantly more, somewhere between $7,000 and $11,000. And this is a monthly cost. This is why it’s so important to start planning for life after retirement now. Assume that you will eventually need the most expensive care. If you work towards that, start saving towards that now, you’ll be in much better shape to cover the costs.
To find out more about Mort and his perspective as a member of the elderly community, check out his articles for the Sun Sentinel.
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: I recently started having the Sun Sentinel delivered daily to my door and I came across a series of articles addressing the real life facts about options for older people in later life. So I invited the author of these series of articles to join me and discuss it. He is Mort Mazor. He is a 95 year old freelance writer and he’s addressing the very issues that he’s facing himself and his readers are also interested in as well. Mort Mazor, welcome to the show.
Mort Mazor: Good morning. Thank you very much, Steve.
Steve Pomeranz: So you’ve been writing articles, as I said, addressing the challenges faced by older Americans with regards to the high cost of getting old. What are some of the challenges that they’re facing?
Mort Mazor: Well, people have to learn and evaluate the senior housing choices to determine what is best for their specific situation.
Steve Pomeranz: Mm-hmm (affirmative).
Mort Mazor: For example, there are independent living facilities, assisted living, skilled nursing, memory care or Alzheimer’s care. People should evaluate the cost of each to determine which is best.
Steve Pomeranz: All right. We’re going to get into those, in particular, in a minute, but one of the worries, I think, of seniors today is this challenge of whether or not you’re going to outlive your assets because you’re going to need the money to pay for these necessities, whether you’re going to be renting in a senior living facility or buying-in. What about the cost of doctors and hospital stays? What kind of financial condition would you say the average person is in their 80s and so on and how much money they have to devote to the best care they can get?
Mort Mazor: If a person or a couple is in their 80s, 80% of the people that age bracket do not have enough assets to rent or buy-in, in a senior facility.
Steve Pomeranz: 80%.
Mort Mazor: The important thing-
Steve Pomeranz: 80%, it seems like a lot.
Mort Mazor: Sir?
Steve Pomeranz: 80% seems like a lot.
Mort Mazor: It’s a great deal.
Steve Pomeranz: Yeah.
Mort Mazor: It is a lot. People are unprepared for this financial responsibility when they get that age. People should start planning at age 30 for the later years and very few people do it. They should consult-
Steve Pomeranz: There are challenges as people raise their children and the cost of getting them into college.
Mort Mazor: Exactly.
Steve Pomeranz: And then as they get older, their parents may also need financial assistance. It’s been termed the sandwich generation. You’re sandwiched in between your kids or you’re trying to help and your aging parents as well. Do you see some of that?
Mort Mazor: Exactly. I had that experience years ago with an aged aunt who I was executor for and she had no one. She was a single woman and she had contracted Alzheimer’s and it was a desperate time for her because she had very limited assets. And we worked with her daily, practically, in getting her the proper care. But it’s a desperate time for families when a loved one needs help and you’re raising your family, you’re getting prepared for college education for your children.
Steve Pomeranz: Yes.
Mort Mazor: As you said, it’s the sandwich generation.
Steve Pomeranz: Let’s talk about some of the options available and let’s leave the money aside whether people have enough money or don’t have enough money. Let’s just talk about the options themselves. So you had mentioned a few of them before. Let’s start from the top. I guess independent living-
Mort Mazor: Well, I’m-
Steve Pomeranz: Would be number one?
Mort Mazor: I’m going to start from my own experience-
Steve Pomeranz: Okay.
Mort Mazor: Because we’re here at a facility in Boca for the past five years.
Steve Pomeranz: Okay.
Mort Mazor: It is an independent living situation for us. However, in addition, they have assisted living facilities, skilled nursing facilities, a separate building for memory care and another building for Alzheimer’s care.
Steve Pomeranz: Mm-hmm (affirmative).
Mort Mazor: And each of these carries its own expenses that people have to be prepared for, which in my opinion, they are not.
Steve Pomeranz: Yeah. So let’s start with independent living. That sounds like having a one or two bedroom apartment, where you’re cooking your own meals and you’re able to do the typical activities of daily living. Is that correct?
Mort Mazor: Well here we do not do any cooking, although there is a small kitchen.
Steve Pomeranz: Yeah.
Mort Mazor: We are served two or three meals a day. It depends on the arrangement that was made originally. We have two meals a day, breakfast and dinner and the meals are prepared. We have a large dining room and the food is adequate and you’re cared for in that way. You don’t have to worry about cooking anymore.
Steve Pomeranz: Right. Now did you buy-in, or are you renting?
Mort Mazor: No. No.
Steve Pomeranz: How does that work?
Mort Mazor: This is a rental.
Steve Pomeranz: Okay.
Mort Mazor: We’re in a rental facility.
Steve Pomeranz: Okay.
Mort Mazor: Our rent for the Mrs. and I is $5,000.00 a month, approximately.
Steve Pomeranz: Yes. How much has that increased over the five years that you’ve been there?
Mort Mazor: Every year we get an increase of between four and five percent.
Steve Pomeranz: That’s pretty significant-
Mort Mazor: Yes, it certainly is.
Steve Pomeranz: When you think about it. Yeah. Yeah. So how are you, sir? And I don’t need to know your personal finances, but you’re getting Social Security. You’re 95 years old, so it must be a fairly significant amount, relatively speaking.
Mort Mazor: No, well-
Steve Pomeranz: And how are you funding this personally?
Mort Mazor: Well, not really. The Social Security isn’t that much.
Steve Pomeranz: Okay.
Mort Mazor: But I have a pension from my corporate life.
Steve Pomeranz: Okay.
Mort Mazor: And we had… We lived in Delray for 27 years, in two different communities in single family homes. So the sale price of those two homes have given us a background, a financial background, that has helped us continue here for five years.
Steve Pomeranz: Would you say that your home was a significant part of your nest egg?
Mort Mazor: Definitely.
Steve Pomeranz: Yeah. I think a lot-
Mort Mazor: I did not have too many investments to come back on. I did not have the right financial tutoring in my career that enabled me to build a stock or bond nest egg, unfortunately.
Steve Pomeranz: Yeah, unfortunately.
Mort Mazor: But-
Steve Pomeranz: But on the other hand you did have a pension, so-
Mort Mazor: Yes, I do.
Steve Pomeranz: So someone, some organization, your company, was taking money off the table and investing it for you, for you to be able to get your pension. So you did, in essence, have some of that, even though you didn’t have your own personal-
Mort Mazor: Yeah. Well, I… In looking back, you know, hindsight is 20/20.
Steve Pomeranz: Yes. Mm-hmm (affirmative).
Mort Mazor: In looking back, I failed to hook up with a financial planner-
Steve Pomeranz: Yeah.
Mort Mazor: In my early years and I think that is a great disservice that I did to my family. I have an older son and he has an older son, 70 and 45 respectively. They are using a financial planner in Georgia and they’re very satisfied with what finances that has been accumulated-
Steve Pomeranz: Yeah, good.
Mort Mazor: For them.
Steve Pomeranz: You know-
Mort Mazor: I recommend that a great deal.
Steve Pomeranz: Well I, of course, being one myself, I would totally agree. I know the benefit, and you’re saying the benefit as well. The other mistake I think people make is if they do save, they’re so afraid of the stock market that they put it into fixed-income investments like CDs, which barely if at all, keep pace with inflation, and they feel safe, but they’re really not safe considering the higher cost of maintaining oneself as they age. They will not have accumulated enough money. Let’s go to the other, the next step down. So we mentioned independent living. What is the next category?
Mort Mazor: We have assisted living. We have smaller apartments and trained aides and nurses to care for a person who perhaps is not able to care for themselves.
Steve Pomeranz: Yeah. What is the differential, and I don’t mean dollars, is independent living more expensive or less expensive than the assisted care?
Mort Mazor: Less expensive than assisted care.
Steve Pomeranz: So independent living is cheaper than going into assisted care?
Mort Mazor: Yeah.
Steve Pomeranz: Okay. All right. And those are facilities, I mean, maybe you have one room with a small kitchen that kind of doesn’t really function? You can’t really cook in it.
Mort Mazor: There’s no kitchen-
Steve Pomeranz: There’s no kitchen.
Mort Mazor: In the assisted living apartments.
Steve Pomeranz: Yeah.
Mort Mazor: They’re just one room.
Steve Pomeranz: Right. One room, a bathroom, some closets and that’s it.
Mort Mazor: Yeah, yeah.
Steve Pomeranz: Okay. But you ave full nursing care and it’s good if you can’t get around and you need assistance or you have a fall or something like that. There’s someone there to take care of you.
Mort Mazor: Absolutely. That’s the reason for the assisted living section.
Steve Pomeranz: Okay.
Mort Mazor: One of the great problems of seniors is falling.
Steve Pomeranz: Yes. What about the next level down? So we have the independent care, we have the assisted living, what’s next? What’s the other choice?
Mort Mazor: Well, the skilled nursing facility.
Steve Pomeranz: Mm-hmm (affirmative).
Mort Mazor: For someone who is maybe bedridden and needs 24 hour a day care. And after that is memory care.
Steve Pomeranz: Sure.
Mort Mazor: Or Alzheimer’s care.
Steve Pomeranz: Yeah. Yeah. Well these would be in addition to, if you’re already in assisted living, you would go to these on a weekly basis or something like that. You’re not actually living in those places are you?
Mort Mazor: No. No. People are living here-
Steve Pomeranz: Oh, they do? Okay.
Mort Mazor: In our memory care-
Steve Pomeranz: Oh, I see.
Mort Mazor: And Alzheimer’s care units.
Steve Pomeranz: Okay. And relatively speaking, is that the most expensive? Where does that kind of fit in?
Mort Mazor: Yes, that would be most expensive.
Steve Pomeranz: So, let’s talk about how one pays for this. Now I know there are four primary sources of funding. There’s a private pay, you have the money, you pay it yourself. Medicare will assist to some degree. There’s long-term care insurance, which has its own positives and negatives. And, of course, Medicaid.
Mort Mazor: Yes.
Steve Pomeranz: So I think private pay, basically, explains itself. You have enough money you pay out-of-pocket. You’ve accumulated excess money of hundred of thousands of dollars and this will take you forward, until the end of your days. How does Medicare fit into this?
Mort Mazor: Well, Medicare is not one of the things that I wanted to get into. I wanted to speak about Medicaid, which is-
Steve Pomeranz: Sure, let’s do that. That’s fine.
Mort Mazor: Which is a great benefit, however, you cannot attain Medicaid unless you have less than $2,000.00 in assets.
Steve Pomeranz: Right.
Mort Mazor: And that has to be for a period of five years before you can even look for Medicaid.
Steve Pomeranz: Mm-hmm (affirmative).
Mort Mazor: So that leads to an elder care attorney who needs to prepare legal papers for you that will… Their charges run very high also. This is a… I have my notes here. Assisted living facilities run anywhere from 2,500 to $5,000.00 a month.
Steve Pomeranz: Mm-hmm (affirmative).
Mort Mazor: And nursing home costs run anywhere from 7,500 to $11,000.00 and more.
Steve Pomeranz: I see. Yeah.
Mort Mazor: It is no wonder seniors in their 80s and 90s are challenged by how to pay for the cost of long-term care.
Steve Pomeranz: From your point of view, from your perch, how do you view the quality of care in Medicaid?
Mort Mazor: In Medicaid?
Steve Pomeranz: Yeah, if you have to go to a Medicaid facility.
Mort Mazor: That’s the most serious of a problem. We are not there yet.
Steve Pomeranz: Right.
Mort Mazor: But-
Steve Pomeranz: But as far as you can tell, I mean, you talk to people and you interview people that helped you to write this article and give you information. Is the quality of Medicaid facilities… What’s your general view? Good, bad, indifferent?
Mort Mazor: I think it’s care that is special because people who are on Medicaid, may of them are in mental and physical distress.
Steve Pomeranz: I see.
Mort Mazor: And so, the care that people are given at my facility is excellent.
Steve Pomeranz: Well, that’s good to hear. You know unfortunately Mort, we are out of time. My guest Mort Mazor, writing articles for the Sun Sentinel on this very, very issue. So how often do you… do they publish your articles, Mort?
Mort Mazor: About twice a month.
Steve Pomeranz: Okay, very good. And you sir, you’re doing… you sound like you’re doing fine? You’re pretty healthy?
Mort Mazor: I’m very fortunate.
Steve Pomeranz: Yeah. That’s wonderful.
Mort Mazor: My wife is a little bit invalided, but we’re coping and we will continue to cope.
Steve Pomeranz: Well I’ll tell you Mort, you sound great to me. Clear of mind, 95 year old gentleman and I really appreciate you taking the time to come on the show with me today. Thank you.
Mort Mazor: Okay, Steve. Thank you. Bye.
Steve Pomeranz: Thank you. Bye, bye. To hear this and any other interview that we do, or if you have a question about what we’ve just discussed, please visit our website, stevepomeranz.com. That’s P-O-M-E-R-A-N-T… No T. I meant to say something else and I said the T. P-O-M-E-R-A-N-Z, forget the T, go right to the Z. That’s what I meant to say. Anyway, stevepomeranz.com to join the conversation. While you’re there, sign up for our weekly update where you’ll hear all of these interviews that we do plus my commentaries and you can share with your friends as well. And don’t forget, also, that we podcast. We’ve been podcasting for years. So go to your favorite podcast app and put in the name and you’ll see us. You can hear us at your leisure on a time most convenient for you. That’s stevepomeranz.com.
