If you’ve noticed any cognitive or physical decline in your parents lately, you may be considering what support they’ll need. It’s common for adult children to move back home and care for their parents, especially with the recent increase in remote work.
Before making any big decisions, there are some considerations to review with your parents and their (or your) financial professionals. Here are a few important talking points to get the ball rolling.
Communication is Key
Aging is difficult for most people. Your parents grew up caring for you, raising you to become the adult you are today. Transitioning from being your caregiver to receiving care can be hard for parents, and it’s understandable if they try to push back on it. Try to give your loved ones grace during this transition, and consider what it’s like from their point of view.
There will be a lot of emotional decisions happening during this time. If you have siblings, make sure they’re involved in the conversations. It’s essential that everyone’s voice is heard and the decision and reasoning behind it are discussed at length. Everyone should have the chance to understand the “why” behind what you’re planning to do — especially your parents.
When tensions rise, and people have a difference of opinion, it can be hard to have these talks. But try to keep the lines of communication open. Make it possible for others to express their opinions when needed. While texting is convenient, it’s also easy to misconstrue what others say or how they say it. Try to talk face-to-face or over the phone to help avoid any unnecessary aggression or misunderstandings.
During conversations with your parents and other family members, talk about what’s currently working, what could work in the future, and what needs to be changed. If your siblings live on the other side of the country and are out of touch with the situation, for example, they may not initially understand the need for a big transition like this. Try to stay calm and reasonable as you explain your intentions.
Establish Your Parent’s Financial Situation
Money is a taboo topic for most families, especially among older generations. Even though you’re grown and established, it’s possible your parents may not have been open about their current financial standings. If you’re considering uprooting and moving back home to help them, taking a peak under the hood and seeing what you may be working with is essential.
A recent survey found that caregivers spend around $7,242 out-of-pocket money per year while caring for a loved one.1 Knowing what resources and policies your parents may already have can help reduce the financial burden on both you and your parent’s estate.
Health Insurance Coverage
First, find out what health insurance coverage your parents currently have. Do they qualify for Medicare or Medicaid? If so, are they currently on it? Or do they have retiree benefits from a former employer?
If their health has deteriorated or changed in any way recently, their current coverage may no longer meet their needs. Retired couples spend, on average, $21,400 on both covered and out-of-pocket medical expenses in retirement. The more covered by their policy, the less they’ll have to spend out of their pocket or yours.
Someone turning 65 today has a 70% chance of needing long-term care in the future.2 For most retirees, long-term care is a matter of “when,” not “if.”
Insurance policies are critical to protecting your parents’ assets and potentially yours and their caregivers. Check to see if your parents have insurance policies, such as long-term care insurance or life insurance. A long-term care policy could help pay for additional care like home visits from nurses or stays in a recovery facility.
Savings for Additional Medical Expenses
Not every expense will be covered by your parent’s insurance policies. Determine if they have savings set aside to help cover out-of-pocket medical expenses. Perhaps they have a health savings account (HSA), a tax-advantaged savings vehicle built specifically for healthcare costs.
A bonus: If your parents are over 65, they can use their HSA to cover expenses, not just eligible medical costs.
Talking to your parents about establishing power of attorney and a medical directive might be a good idea. It can be a challenge for your parents to let go of some control but explain to them the benefits of obtaining power of attorney and how it can help them (and you) in the long run.
Review their estate planning documents (such as their wills, trusts, insurance policies, beneficiary information on accounts, etc.) and help them make any necessary changes or updates.
Estate planning is the last thing anyone wants to think about, but it’s essential to help your parents get organized now while they can still communicate their wishes.
Understand What Type of Care They Need
Everyone has different needs, and understanding what type of care is needed is essential when determining how you can best help your parents.
Much of this will depend on their current level of independence, health concerns, and financial preparedness.
Can your parents manage tasks associated with daily living? These include bathing, cooking, getting dressed, etc. Perhaps they’re reasonably independent but need assistance with more rigorous tasks like cleaning the house and yard work. In that case, moving nearby could significantly help your parents while respecting their desire to remain independent.
Or they may require more assistance and a full-time caregiver. In that case, are you comfortable moving into the home with them and taking on this role? As their needs progress, you can also bring in a nurse or professional caregiver regularly to help out. Look for adult day programs for your parents to attend, as these can provide you some relief as a caregiver.
If you cannot meet your parents’ needs independently, is it better to find them an assisted living home or long-term care facility instead? In that case, you may still want to move back home to be nearby enough to visit regularly and help them through the transition.
Remember that the more help you outsource (whether to a daycare program, at-home nurse, or live-in facility), the higher the financial obligation. You’ll need to find out if your parents have funds for long-term care or if you’ll be responsible for fronting the costs.
If your parents aren’t yet in a position where they need outside help, perhaps now’s the time to start preparing for long-term care costs. Talk with your parents and financial advisor to plan and set aside savings for those future expenses.
Lean On Your Other Loved Ones For Support
Caring for an aging parent is stressful but can also shift the family dynamics. Relationships with your loved ones (siblings, aunts, uncles, cousins) can become strained if only some pull their weight. Caregiving can be a full-time job, and it’s draining in many ways — physically, mentally, emotionally, and financially.
Don’t be afraid to talk to your family about getting support or assistance as needed. Even having others visit your parents occasionally can help relieve some of the burdens off your shoulders. Everyone can help somehow, even through small gestures like sending a card or making dinner.
Try to keep in mind that everyone’s financial situation is different, and others may not have the flexibility that you do to move home and assist your parents regularly. If you start to feel resentment or anger towards others for not doing their part, try to have a calm and candid discussion. Express your concerns and develop a solution to help everyone feel involved and supported.
You’re Not Alone
The journey you’re about to take can be emotionally exhausting — not to mention isolating. You do not have to go it alone because we’re here to help. Reach out to our team anytime to learn more about how we assist families like yours in managing the financial wellness of aging loved ones.
Partners in Financial Planning provides tax-focused, comprehensive, fee-only financial planning and investment management services. With locations in Salem, Virginia and Charleston, South Carolina, our team is well-equipped to serve clients both locally and nationally with over 100 years of combined experience and knowledge in financial services.
To learn more, visit https://partnersinfinancialplanning.com