Dear Kim,
Dear Kim, although I am only in my late 40’s I realized that my parents are approaching retirement age. Should my financial plans include contingencies for their care and future needs, like assisted living? Where should I start, and what resources do you recommend? Worried GenX’r
Thanks,
Worried GenX’r
Dear worried GenX’r,
This topic is tricky. Many people are finding themselves in what is being labeled the ‘Sandwich Generation’, meaning they are still raising kids while their parents are becoming infirm.
There are really two different ways to approach this dilemma:
The first approach is that your parents are responsible for financing their own care, and if enough money hasn’t been saved, rely on Medicaid. This presents some problems, mainly the quality of care that is available when searching for a Medicaid bed in a long-term care facility. This can also lead to feelings of guilt for not caring for the people that raised you. Beyond finances, there is the issue of the time it requires to check in on them and take them to appointments and outings once they can no longer do those things for themselves. There are services you can employ to help with those tasks; here in Blount County, we have the Smiles (Senior Miles) program run by The Community Action Agency. They have volunteers that pick up seniors and take them shopping, to doctor appointments and other outings. The fee for each trip is very small. CAA also runs the Meals on Wheels which provides meals to seniors and other shut-ins. A lot of people will engage friends and other family members to agree to spend a certain amount of time each week with their senior parents. The idea is to be creative in coming up with solutions that work for you and your family. My children have told me I’ll come live with them, and it’s so kind of them to offer that to me. I can’t imagine doing that from where I am today, but who knows how I will feel years down the road. If your parents are still able to take care of themselves, sit down and have the conversation of what their plans are and what they would like in the future. Ask about their finances to manage their later years. Many seniors are active and engaged well into their 80s and 90s. I have several clients in that situation.
The second approach is to take on the financing of care for aging parents, which has a potentially large impact on your own retirement savings. It is hard to balance the need to care for parents while at the same time creating boundaries that keep yourself and your finances safe for your own retirement. If you are still paying for the education of your children, that can make it especially difficult. Taking on that responsibility can have detrimental effects on your own plans for retirement and can create friction within the relationship with your spouse. It is a good idea to sit down early with your parents and discuss their plans, their finances and what they see happening in their sunset years. Many seniors want to live independently as long as possible, and often, they want to go beyond the time it is safe to do so. Having that conversation early allows you to remind them of that conversation and the decisions you agreed together.
Finally, regardless of the path you end up on, try to plan as early as possible for whatever eventuality you wind up in. I highly recommend looking into Long Term Care insurance to help with the expenses that can come late in life. Insurance is designed to be a cost sharing vehicle and can help greatly in managing the high costs that can come with elderly care. I don’t sell insurance but can give you the names of individuals that do so, if you are interested.
I wish you the best as you navigate through planning your own retirement and the future care of your parents.
Kim
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