In our adult years, we may encounter two distinctly memorable moments. The first is the moment we realize we sound like our parents when speaking with our children or friends. It’s usually funny because you scratch your head and say to yourself, “I just repeated something my old man would say.” Hopefully, the second moment doesn’t happen to you – becoming your parent’s parent. We switch roles as a result of aging, dementia or chronic illness, and we’re tapped on the shoulder to step in, step up, and help with our parent’s care.
Planning is the topic of Denis Waitley’s quote, “Expect the best, plan for the worst, and prepare to be surprised.” Our parents deserve to live with quality and dignity, and we don’t want to see them fall victim to financial elder abuse or fraud. However, it’s also a difficult topic because we were taught not to question our parents’ authority. Below, you will find key information about helping our parents or aging relatives prepare for their future, myths about eldercare, and actionable steps.
Myth: It’s not going to happen to me, and I’m not going to need help.
Currently, 13 percent of the population is age 65 or older, and by 2050, one out of five Americans will be 65 or older. According to the U.S. Census Bureau, we’ll have more seniors (age 65+) than children (under 18) by 2035, and the fastest-growing population segment will be those 85 and older. Unfortunately, the cost of health care doesn’t get better with age. Fidelity Investments, a multinational financial services corporation, estimates an average couple at 65-years-old will spend approximately a quarter-million dollars for medical costs for the remainder of their lives; that excludes the cost of assisted living. The annual cost of Alzheimer’s care is estimated to be $203 billion or about twice the cost of cancer.
Myth: I’ll be covered by Medicare.
The Centers for Medicare and Medicaid Services (CMS) estimates health spending accounts for about 20 percent of gross domestic product (GDP) and that the government (Federal, state and local) pays about half that cost (the balance paid by self-pay and private insurance). However, Medicare generally does not cover assisted living costs. An alternative is Medicaid, however, it’s considered a resource of last resort. The Federal/State program is for low-income, needy families.
So, how do you approach your parents or aging loved ones about making sure they’re going to be ok in retirement in both financial and non-financial issues? Planning is best done when they are healthy and clear-headed, rather than guessing what they want should a medical emergency strike or their mental condition fades.
Prepare in Advance
Prepare a list of questions in advance and document their answers. Do your parents pay their own bills, and what are the passwords and access codes to their online accounts? Who are the key people in their lives, including legal, medical, financial, home maintenance, veterinarians, lunch, and play buddies? If something unfortunate happens to them, how do they want their personal effects handled, how do they want to be cared for, and by whom? Plan to stay put in their home (possible age-in-place modifications and future caregivers) or move to retirement community/assisted living facility? Where are their legal documents? How do they want their end-of-life to look, and what do they want to be remembered for?
Develop a plan
This may require the engagement of professionals including legal, medical, caregivers, property management, professional trustees, etc. Have a family meeting with your parents and other key members to secure your parents’ wishes.
Periodically review and update the plan, as needed. Document life changes, including your parents’ needs, service providers, and family dynamics. You have challenging duties taking care of your parents, so build a supportive team of resources and practice good communication.
In many ways, helping our parents or aging relatives prepare for their future is parallel to planning for our own. Secure your future wisely.
This article can be viewed at the Reno Gazette Journal.