If you’re in your forties or fifties with active, relatively healthy parents, it may be hard to imagine that your own financial future may be impacted as they age and need physical and/or emotional care.
Especially now, as more and more Americans fall into challenging economic circumstances, it’s a good idea to plan ahead. In our experience working to ensure our clients’ financial security, we have seen time and time again that honest and compassionate conversations with aging parents about future caregiving needs can improve outcomes.
This article addresses the topic of caring for aging parents, including:
how to begin having these caregiving conversations with your folks
how to discuss housing and health care options with compassion and grace
how to take care of your own needs and set boundaries
Initiating caregiving conversations
It’s not easy to witness parents showing signs of physical and/or mental decline. It’s also not uncommon for seniors to minimize or dismiss concerns about their health or their increasing dependency on others.
Consider the 180-degree shift in the caretaking dynamic. For decades, you were dependent on them. It can be hard for you and them to acknowledge that one day, they will be the dependent ones.
Having supported clients with decisions facing them and their parents, we acknowledge that while the conversations are not always comfortable to start, they can be supportive and loving with practice and grace.
You might inquire initially about how they feel about their health today, and how they envision maintaining healthy behaviors like exercise and community engagement.
Most of us respond well to inquiries about our personal wishes, such as our visions or dreams about where we want to retire and live out our last chapter of life. Ask them to share their desires.
When the time is right, more specific discussions might seek to discover details about their existing health plans, insurance coverage, and retirement savings. Over time, you’ll have a sense of whether their preferences are possible given their health and overall financial picture.
Understand aging in America
Arm yourself with some education and facts about aging in America before you start talking with your parents. Our nation is unique in the world, as we have neither a history of multigenerational households nor a national health care system.
First, know that it’s likely your parents will live into their nineties, barring unforeseen, or existing health issues that may shorten their lives. Consider these stats from the Actuaries Longevity Illustrator: A 65-year-old woman today has a 44 percent probability of still being alive at age 90, and for men aged 65 today, that probability is 33 percent.
If your parents are in their seventies now, they’ll need enough money to cover their housing and other needs for another 15-20 years. The fact that these longevity statistics are true for you too should underscore the importance of a strong financial plan to stretch your own retirement dollars!
Health care decisions
While preventative and minor outpatient services are typically covered by Medicare at a low monthly cost, when your parents need part-time or around the clock care, Medicare will only go so far.
Nursing homes and assisted living facilities have long carried large price tags, ranging from $5000 per month and higher, depending on location, quality, privacy, and more.
Start by understanding what your parents have saved to help cover those costs. Is their home paid off? Do your parents have long-term care insurance? What funds from their retirement accounts can be allocated towards health care?
Assuming your parents are open to sharing these details with you, you will quickly have a sense for how much of the financial burden may fall on you.
Before agreeing to “do whatever it takes” to keep Mom or Dad out of a nursing home, it’s crucial not to sacrifice your own retirement savings before looking into all the options, including government programs and benefits. Reach out to us to ensure you are making the best decisions for your own financial future.
Housing and the reverse-boomerang effect
Often, the topic of housing arrangements is not addressed until the parents are in their seventies or eighties. While sometimes this timing is natural and works out smoothly, waiting too long can cause rushed decisions due to a health crisis.
A recent New York Times article called My Retirement Plan is You, the author explains the reverse-boomerang effect, i.e. the phenomenon of parents moving in with their adult children. According to a Pew Research Center analysis of population data, 14 percent of adults living in someone else’s home in 2017 was the parent of the head of household.
This trend is expected to balloon in the coming years as many baby boomers are leaving the workforce (by choice or not) and can’t afford to support themselves due to lack of a pension or personal savings.
Here are some key considerations around caregiving and housing:
The aforementioned nursing home, assisted living, or independent living communities may work depending on their desires and available finances.
Depending on the care needed, your loved one could also stay in their own house and have a caregiver come in for a few hours each day or week to help out with meal preparation, laundry, cleaning, and errands.
If you have ample space on your property, you might consider building an “in-law-suite” or guest house.
If space is limited, inviting a parent to live in a spare bedroom presents an entirely different dynamic that merits a frank and delicate discussion about privacy and boundaries.
If mom or dad moves in with you, will you and/or your spouse be the primary caregivers?
How much care is required now and how much may be required in the future?
If your parents live in your home, can you afford to bring in outside help to care for their basic needs and care?
Lead with grace and self-care
Providing emotional, physical, and financial support for aging parents can take a significant toll on family members. The majority of caregivers are women, and historically women have put their own financial futures at risk by retiring early or quitting a job to care for elderly parents.
You may be juggling your career, time with your own family and friends, and caregiving, and will often feel overwhelmed. While helping care for your parents can be an honor, it’s critical that you put your own oxygen masks on first, so to speak, to ensure your own emotional, physical, and financial well being.
It’s important to acknowledge your life circumstances, existing responsibilities or other limitations and not feel guilty if being a primary caregiver is not the best situation for you or your parents.
If you do find yourself as your parent’s primary caregiver, it’s important to enlist the help of your spouse, kids, siblings, or other relatives near you. Dividing the daily tasks and responsibilities will help you feel less overwhelmed.
Make time for yourself, your health, and let your parents do what they can, as it will help them feel better about their own struggle with dependency.
This is a complex and emotionally charged topic, and we hope we’ve provided some valuable guidance that will set the stage for compassionate and respectful discussions and decisions.
It’s important to have access to unbiased financial guidance and counsel when it comes to caring for parents. We are dedicated to our clients’ well being and have a unique appreciation for the challenges involved where family and money intersect. We’re here for you. Set up a call with a team member today.