Taking Care of Aging Parents – What to Consider

An estimated 10 million people age 50 or older care for an aging parent, according to a study by MetLife.

You will likely have to care for your parents in some way if they become ill, whether assisting them with daily tasks or managing their finances. But if they are unprepared, a greater share of the responsibility may fall upon you, which can present physical, emotional and financial challenges.

Taking an active role early on (or carefully considering your options if your parents already need help) can help ensure your parents get the care they need and want while you avoid having to put your life --and retirement -- on hold.

Before your parents need care: have the talk.

Sit down with your parents to discuss their current situation and their future. Ask questions about their finances and discuss their wishes. This will help you determine what type of care they prefer, what assets they have and where they are located, and who they want to handle decisions for them.

Some questions to ask:

• What are you future plans and current financial situation?
• Would you prefer care at home or in a health facility?
• Do you have long-term care insurance?
• Do you have a will or living trust?
• Have medical and financial powers of attorney been established?
• Where are your important legal and financial documents located?

Afterward, you should be able to create a plan of action. Organize all important documents, including investment and bank account statements, outstanding debts, wills and/or trusts and Social Security information. Make sure your parents fill out all necessary beneficiary information.

Consider working with a professional, such as a financial adviser and/or an estate attorney, to verify that all appropriate steps are taken and essential documents are secured.

Of course, this can be a difficult conversation for anyone. You don’t want your parents to feel as if they are losing control. If they refuse to talk or continue to avoid the conversation, explain that the situation affects the whole family. However, don’t expect a successful meeting on the first go. For most, this will be an ongoing dialogue.

If your parents already need care: carefully consider your options

While you may feel that caring for an aging parent is your duty, you should also recognize the sacrifices required. It can take a significant toll on your money, time and energy at a stage in your life when they are most important. All of which could affect your own quality of retirement.

• First, learn what government or public programs are available. You may be able to acquire certain care services for free or little cost. You should also explore what services are covered under Medicare and Medicaid. For example, Medicare does not cover nursing home care but Medicaid does.
  
  
• Think carefully before changing your work hours or quitting your job to help care for a parent. Leaving your job or reducing your hours may lower your income and retirement savings. You may also lose your benefits. Additionally, if you can’t return to your old job, you could face poor job prospects as an older worker when you reenter the workforce.
  
  
• It’s also important to consider the impact on your finances. If you parents lack the necessary resources to meet their needs, can you make up the shortfall? Do you have room to budget for caregiving expenses? Will you have to change your lifestyle? Will it impact your other financial goals?
  
  
• Work with your adviser to see how this life event changes your retirement plan. Will you have to delay retirement or work in retirement? Do you need to adjust your investment portfolio? Is it safe to tap your retirement savings?

You can’t predict how your parents’ health will change as they age. But you can prepare. It’s the type of smart thinking and financial planning you probably learned from your parents.