Helping Your Parents Through Their Retirement
In 1900, life expectancy at birth in the U.S. was 47 years. Now that number is closer to 86, and many of today’s children could live to see 100. But with an increase in longevity comes a growing need for longer care of the elderly. This means more and more Americans are falling into what Kiplinger calls the “sandwich generation,” where they may have adult children and even grandchildren, but are also assisting their parents through retirement and these extended years of life.
Watching a parent becoming increasingly dependent on others for the normal activities of daily life can be difficult. It can be even harder for the parent to admit needing help. Creating a plan for how you, your parent, your family and your parent’s medical professionals will handle that possible scenario can alleviate misunderstanding and confusion when a crisis arises. Here are some tips to prepare for your parent’s aging:
1. Pick a point of contact. One sibling or other close relative should be in charge of communicating with doctors. This person should have a health care power of attorney for the parent.
2. Find a family-friendly primary doctor. An elderly parent may receive care from multiple specialists. With your parent, decide on one doctor to be the primary medical resource. Make sure reports from specialists are sent to the primary doctor. If you are caring for your parent from a distance, consider asking your doctor if he or she is willing to communicate via email.
3. Create a central storage place for vital documents, including medical records, Social Security number and health insurance policy information. In an emergency, you don’t want to be digging through decades of files to find what you need. Hard copies should be duplicated and stored in at least two fire- and water-proof locations. Digital imaging and storage services offer a convenient place to access files remotely.
4. Talk to your parent about long-term care insurance. Nursing home costs continue to rise faster than inflation and can quickly deplete your parent’s savings. If your parents are healthy enough to qualify, paying the premiums for them can help safe-guard your savings from their health-care expenses in the future.
5. Consider adult day-care services. As much as you may want to quit your job to be able to care for your aging parents at home, doing so may drain thousands of dollars from your own needed savings. Instead, consider enrolling them in an adult day-care program while you work, or investigate home-health aides and nursing home options. Often these programs will keep them physically active and engaged in a community and will still allow you to work.
6. Research tax and employer benefits. If you pay for an adult day-care program or for someone to take care of your parents in your home, you may be eligible for dependent-care credits or other tax incentives. Some large employers may also offer care-giving support as an employee benefit or may have dependent-care flexible spending accounts you can contribute to.
7. Create a care circle. Particularly if you live more than an hour or two away from your parent, a network of neighbors, church members and friends can give you some reassurance that others will keep in touch with your parent regularly and contact you in an emergency.
8. Discuss finances. The point-of-contact relative, or another relative equipped to deal with financial matters, should have a financial power of attorney. This person should know the location of key accounts and policies, and the names and phone numbers for key advisors.
With roughly 10,000 baby boomers reaching retirement age daily over the next 15 years, many in their midlife may find themselves balancing between financially helping their retiring parents and saving for their own retirement. Don’t make promises you can’t keep. A parent who resists help can use emotional leverage to extract promises you’ll later find difficult to keep – like withholding information from other family members or vowing not to place the parent in a nursing facility. Trying to take care of yourself and your parents can be financially and emotionally draining. Discussing such issues ahead of time with a financial advisor can help you and your family avoid these situations.
Securities offered through Securities America, Inc. Member FINRA/SIPC. Jose R. Rodriguez, Financial Consultant. Advisory Services offered through Securities America Advisors, Inc. An SEC Registered Investment Advisor, Jose R. Rodriguez, Investment Advisor Representative. Rodriguez Financial Strategies LLC and the Securities America companies are unaffiliated. Written by Securities America for distribution by Jose “Rafi” Rodriguez, Retirement Income Certified Professional®. SAI#1128141.2