Caring for Aging Parents

Caring for an aging parent can consume considerable time, money and emotions. Given that people are living longer, financial advisors recommend that everyone factor in elder care costs into their own financial plan. Families typically use parents' health benefits, retirement income and savings to pay for elder care, but caregivers may also pay a price. A caregiver would lose income, as well as retirement savings and health benefits, if leaving a job to care for a sick parent becomes necessary. With some planning and candid conversations with your family, the responsibility of caring for an aging parent can be shared and less burdensome. Here are some tips to help preparing for the care for aging parents.

Have an honest discussion with your parents

It may not be comfortable at first, but an honest discussion with your parents about what you can do to help them can prevent resentment or conflicts. Most individuals don't want to be a burden and give up their independence, but would rather make their own decisions about their health care. Be knowledgeable about what resources are available for your parents, such as Medicare, and factor in elder care into your own lifestyle. Can you handle the added responsibility and in what form? 

Ask for help and include siblings and friends in the planning process

Caring for aging parents does not have to be solely on one person’s shoulders. Ask siblings, other family members, close friends and neighbors to help. Set a schedule: Prioritize what needs to get done and coordinate who can do the tasks. Sharing the responsibilities can help maintain family unity and avoid conflicts down the road.

Make sure legal documents such as wills are updated and kept in a safe place

Another essential conversation to have with your parents is whether they have updated their will - how a person wants their property and other assets to be distributed when he or she passes. Your parents should also have an advance directive, which includes two legal documents: 

  • A living will - Written instructions for the health care you want (and don't want) if you can't make those decisions.
  • Durable power of attorney, otherwise known as medical power of attorney - Authorizes a person to make decisions about your health treatments if you're unable to do it. 

Make sure these documents, along with insurance policies, tax records, and other investment and bank account information, are in a safe place that you can access.

Know your parents' health care benefits

Given the rising cost of health care, it's important to know if your parents have the right amount of health insurance. Medicare pays many health care costs for people aged 65 and older, but it doesn't cover long-term care such as nursing homes or extended care. Determine if they have to pay for prescription drugs or other out-of-pocket expenses. Your parents may need more coverage through a supplemental health insurance plan, like Medigap or a Medicare Advantage plan.

Many financial advisors recommend buying long-term care insurance when people are in their late 50s when it costs less rather than buying it in their 60s. Long-term care insurance can help pay for the cost of home health care and nursing homes. As with any insurance policy, make sure you read the fine print to see what services are covered and make timely payments to avoid a lapse in coverage.

Be aware of their financial situation

Know your parents’ financial picture and where they keep their records, including account and phone numbers for bank and brokerage accounts and insurance policies. Besides Social Security benefits, find out if your parents receive income from a pension or any other retirement accounts. If your parents have numerous bank or brokerage accounts and some don't make sense, consider consolidating them and make sure those investments best meet their needs. Investment advisors can help you review these investments and identify which may be more appropriate for consolidation.

Understand your parents' desires

Most of all, take the time to understand your parents’ wishes for things such as DNR orders, assisted living, etc, so that you can factor them in when the time comes. According to research conducted by the Association of American Retired Persons (AARP), most parents want to live in their home as long as they are physically capable of doing so. If your parents need full-time care and attention from a health professional, look for assisted living facilities and group homes in the area.

If you need help with any aspect of caring for aging parents, seek help from an elder-care specialist, an elder-care lawyer or other caregiver support groups. Also, talk to an investment advisors about how you should factor in your investment plan when caring for an aging parent.

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