One of the main topics of conversation among the Baby Boomer generation is caring for their aging parents. One of the benefits of increasing medical technology is that our elders are living longer lives. However, one of the detriments of providing this type of long-term care is affording it. Arguably one of the biggest concerns about long-term care for elderly parents is cost and what to do when the money runs out.
Talking about affording parents’ care is often seen as a taboo subject. People do not want to look like they are wishing that their parents’ lives will end soon or that money is more important than family. But the truth is, the longer that parents live the more expensive it becomes. With six million Americans over the age of eighty-five, a number expected to hit fourteen million by 2040, the issue of affording parents’ care is only going to increase with time.
Issues With Affording Parental Care
Every expert on the issue agrees that there is no one solution to affording the long-term costs of parents’ care. The more complicated issue when dealing with this problem is trying to plan for the unknown. Financially planning for a child is much easier because you can predict the costs of education and care. But it is incredibly difficult to try and predict how long your parents will need money or for what kind of care, especially as the average lifespan continues to increase.
Recommendations for Planning the Costs of Care
One point that most experts agree on is that you need to put yourself first, and do not assume that you will need to tap into your own savings to deal with this problem. Even if it feels selfish, you need to consider your own needs and costs like retirement, children, education, and the like. Other tips for planning to afford parents’ long-term care include:
Talk to your parents about your concerns
The sooner this discussion occurs the better off everyone will be. It gives your parents the opportunity to discuss their wishes and allows you to weigh them against the financial considerations.
Meet with professionals who can offer sound advice
An estate planning or elder law attorney can sit with you and your parents to discuss what options are available and how best to structure your assets to pay for elder care. Speaking with your parents’ doctors can also give you an idea about what care will be needed down the road.
Look for money saving benefits for your parents
The government provides a wealth of information on this topic. Try looking at The National Council on Aging’s BenefitsCheckUp.org, the federal Benefits.gov, or The U.S. Administration on Aging’s Eldercare.gov .
Improve your parents’ financial situation
You can think creatively about ways to improve your parents’ current financial situation. Consider getting a renter, moving to a smaller home, selling unwanted personal belongings, or looking into getting a reverse mortgage on the home.
When moving into long-term care, see if the cost is negotiable
Some nursing homes won’t consider taking an applicant who is already on Medicaid because of the low returns by the government, but other facilities can be a lot more willing to negotiate the costs of care. Some places will agree to upfront payment for multiple months or years of care in exchange for a deal on long-term care later on.
Instead of paying outright for care, make it a loan
As an alternative to paying directly out of your own pocket for your parents’ care you can structure it as a loan. The money can be repaid from the proceeds of the sale of the house upon your parent’s death, or it can be taken from some other asset in the estate.