As roles reverse, boomers must plan for costs of aging parents’ long-term care management
INDIANAPOLIS – As boomers age and approach retirement, one thing they’re not planning for are the financial resources needed to care for their aging parents.
Financial advisors are embarking on a new trend – advising adult children how to financially plan for their parents’ long-term care and overall health care management.
A recent national poll indicates that 41 percent of boomers who have living parents are caring for them in some way. Many have assumed the role of lead caregiver and are investing substantial time and financial resources to both provide personal support and take on the challenge of finding and managing services and support options for their parents’ independent or assisted living situations.
The poll further suggests that adult children who are caregivers spend 10 percent or more of their annual income on caring for their aging parents.
“Everyone who has an aging parent will find themselves at some point playing a role in that parent’s health care management, whether that’s the lead role or a supporting role,” said Jeannie Keenan, a registered nurse who serves as vice president of the Indianapolis area for My Health Care Manager. “We’re seeing a trend now that many adult children are being thrust into that lead role – and not only have they not planned for it, they haven’t even thought of the financial responsibilities involved.”
If an aging parent hasn’t personally planned for the costs associated with extended or long-term home care or living in senior housing, assisted living or continuing-care retirement communities, commonly those costs – and all of the research, planning, implementation and follow-through – fall on their adult children.
“Many older, long-term senior health care policies do not cover the costs of assisted living facilities, which range from $4,000 to $6,000 a month,” she said. “If boomers are planning their parents’ care now, by doing the math they’ll quickly determine that it’s quite expensive to place their parents in a long-term, assisted living facility.”
Another dilemma: The Health Insurance Association of America forecasts that by 2020, one out of six Americans will be age 65 or older and the number of seniors age 85 and older will double to 7 million. “We’ll be in a situation where retired adult children will find themselves increasingly unable to meet the financial or physical demands of caring for their parents,” Keenan said. “Financially planning ahead is critically important but past that, planning ahead for the day when you yourself will be unable to take care of your parents is also important.”
THE ‘PERSONAL’ COSTS
There are other costs boomers must plan ahead for as well. Of the estimated 22 million Americans who are unpaid caregivers of their aging parents, a high percentage of them struggle with not only the financial aspect of care but also personal stress and generally feeling overwhelmed with responsibility.
“Adult children who are thrust into that lead role of taking care of their parents can quickly become consumed and overwhelmed. Planning ahead definitely helps lessen the stresses that are naturally involved in being that lead caregiver,” Keenan said. “The time parent care takes. The energy, the dedication. The time away from their own family – and from work. Really, a sense that they’re missing out on living their own lives to some extent.”
WHY PEOPLE DON’T PLAN AHEAD
Aging adults and their adult children commonly don’t realize just how expensive long-term care is – or how it can be paid for, Keenan said. “Most people don’t realize that health insurance, Medicare and other coverage simply don’t cover most long-term care services,” she said.
There’s also the reality that having conversations with aging parents about how to finance long-term care solutions is difficult. “Adult children find themselves in an unfamiliar role. They’ve been the recipients of their parents’ care, planning and advice all of their lives and now they’re in the reverse position,” Keenan said. “Adult children commonly feel that if they bring the topic up, their parents may feel as if they don’t want to care for them and are looking for someone else to do it.”
Adult children simply must open up the dialogue and get past uncomfortable or unfamiliar settings to start the planning process early, Keenan said.
Also, she said, many families know that financial planning for long-term care solutions is important but they simply don’t know how to do it.
TIPS FOR FINANCIALLY PLANNING AHEAD
Keenan of My Health Care Manager offers these simple tips to help adult children begin financially planning for the care of their aging parents:
-- Start talking with aging parents about the issues and expense of long-term health care before a catastrophic event happens;
-- Participate in parents’ relationships with their physicians, attorneys and financial planners;
-- Research home care, adult care and assisted-living opportunities in parents’ communities – learn more about local resources to provide services and support once needed;
-- Research state and non-profit agencies that can provide services and support to aging parents; and
-- Calculate real costs associated with implementing a long-term health care solution for aging parents and work with a local certified financial planner to ensure those costs can be met.
“A lot of it is common sense and basic planning,” Keenan said, “but planning is the key – planning before something happens that forces a person into an unfamiliar role of being the lead caregiver who is financially responsible for the safety and well-being of an aging parent.”
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ABOUT MY HEALTH CARE MANAGER
My Health Care Manager LLC is an objective source of assistance for older adults and their families on the complex issues and options of aging. Based in Indianapolis, the company provides services through area, national and employer programs. My Health Care Manager helps older adults achieve better management and control of their total health care, longer independence and greater peace of mind for themselves and their loved ones. My Health Care Manager is a professional, private-pay service and does not provide direct health care. The company practices a holistic approach to aging and older adult care by helping families understand and manage multiple physicians, medications, treatment plans, living options, insurance, legal matters and more. For more, visit www.MyHealthCareManager.com.
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