- Posted by Michael Kane, CFP
- On November 18, 2016
- aging parents, independence, planning
We speak with many clients who have one or more children of their own and who are also be helping to care for their aging parents. This assistance can include time, financial support, and even various forms of guardianship.
It goes without saying that these commitments can create an emotional and financial strain on any family.
One of the toughest aspects of caring for aging parents is managing the psychology of role reversal. While no two relationships are alike, the one between caring, supportive parents and their children is one we come to rely on, even as we begin families of our own. It is difficult to see our parents lose their independence. When you factor in the legal, medical, and financial implications, it becomes increasingly important to approach this challenge with a plan.
The following are five important considerations that will help you care for your aging loved ones without jeopardizing the needs of your own family in the process.
1. THE IMPORTANCE OF A PLAN
Just as some people approach retirement without a plan, many are not prepared for the challenge of providing care for aging parents. The earlier you have this discussion with your parents (and siblings if applicable), the better. It’s possible that they won’t need your help at all. More likely, however, is that you will be at least somewhat involved in what happens to them as they advance in years. You may already find yourself in this position, making these considerations even more important.
The first step is to design a budget that will cover everything from routine monthly bills to the cost of caregivers or other unexpected expenses. It’s also important to have all legal and financial documents in order. Among other things, a comprehensive estate plan covers wills and trusts, a durable power of attorney, and guardianship designations, should they be necessary. Planning for multiple scenarios will lessen the likelihood of being faced with an unforeseen situation.
2. MAKING THE HARD DECISIONS
Making an easy decision doesn’t always mean you’re making the right one. Perhaps the hardest choice for many families is deciding whether aging parents should stay at home, live with family members, or move into supported living. You probably know a family in which older parents rotate amongst siblings or live precariously by themselves.
Placing the safety and security of elderly parents at the forefront will help you make the right decision for everyone involved. Can you realistically care for a parent who has significant mobility or medical issues? If you’re not able to provide that care, can you or your parents afford the people and equipment they will need? Consider the quality of life not only for your parents but also for your own family and their future goals.
3. DON’T JEOPARDIZE YOUR OWN RETIREMENT
As your parents’ age, or as your adult children need financial help, it’s tempting to ignore your carefully-crafted retirement plan and deal with the consequences later. A sense of urgency in any situation can cloud your judgment and affect your ability to provide for the basic needs of your family and loved ones.
Remember that a good retirement plan is designed to take care of you for the rest of your life. Using those hard-earned funds for other purposes could do more harm than good, and nothing depletes one’s nest egg faster than escalating medical bills or caregiver expenses. This is not a selfish calculation, but a smart and sustainable approach.
4. EXPLORE FEDERAL, STATE, AND LOCAL PUBLIC AND PRIVATE BENEFITS
You may not be aware of the multitude of resources available to help families care for aging parents. Many of these programs are complicated and require due diligence to access, but they can be life-saving for those who need them. In addition to traditional avenues such as Social Security and Medicare (which we will explore further), there are a variety of enrichment, health care, and elder care organizations whose sole focus is helping families of aging parents continue a stable quality of life in the face of deteriorating health or loss of independence. Charitable organizations also contribute to the safety and health of your loved ones through meal delivery, supervision, direct care, and discounted goods and services.
5. LEARN ABOUT MEDICARE
In 1965, President Lyndon B. Johnson signed into law the bill that launched Medicare and Medicaid. At that time, the two primary components were hospital insurance (Part A) and medical insurance (Part B). Over fifty years later, Medicare has continued to change and evolve. One of the most significant changes in 2003 introduced Medicare Part D, a prescription drug benefit for Medicare recipients. Medicare is a powerful vehicle to assist aging parents who need help with medical bills, but its nuances, including the timing of benefits, must be fully understood to provide the maximum benefit for consumers. Do your research or work with a professional to take advantage of all that Medicare can offer.
Caring for aging parents is a labor of love that requires steady navigation through a variety of medical, legal, and financial issues. Stay connected to ensure your loved ones are not susceptible to con artists – the phone and the internet make it too easy to scam those who may be vulnerable. Monitor your aging parents’ relationships closely and protect them from potential fraud. Your entire family will benefit from research, working with a professional, and careful planning.
We can help you navigate the decisions that come with caring for aging parents, including Medicare options, budgeting, estate planning, and balancing the added expenses with saving for retirement. If you are facing these or any other challenges concerning the care of an aging loved one, please schedule a call with an advisor at RAA to discuss your options.