The financial world is filled to the brim with planning—financial planning, estate planning, retirement planning, longevity planning—and that only scratches the surface. With all this focus on planning, there’s almost no discussion about—Parent Planning.
Caring for elderly parents is a growing issue in the United States. A survey conducted by PNC Bank found that 16% of families are currently caring for at least one elderly relative. AARP translates that to 30 million households currently caring for a person over the age of 50. The number is expected to climb to 60 million households in the next 10 years.
As America ages, the need for elderly care will become as common as child care. Parent Planning is the process of preparing a strategy to meet the needs of elderly parents you may become responsible for. The lack of Parent Planning can be devastating to your parents as well as your own financial life forcing you to work longer, settle for something less than the retirement you planned, or worst of all, rely on your own kids for help in your old age. A study by the MetLife Mature Market Institute found that caregiving costs the average family $566,443 in wage wealth.
No one wants to hurt the feelings of a loved one by talking about a future where they are dependent on someone else. But planning now may eliminate future problems, snap decisions, and financial strain that can be avoided.
Parent Planning isn’t something that is casually brought up at Thanksgiving dinner. It begins with an intentional conversation that includes your parents and all siblings in the same location. For anyone who can’t physically be there have them join by video call.
The meeting needs to focus solely on mom and dad. What are their wishes? Where do they want to live if they can’t take care of themselves? What are their finances? Will they need financial assistance? If so, will it come from government, other programs, or will the children be financially responsible? This has to be a realistic, honest conversation and requires input from everyone.
Next, build a team to research questions that come up in the family meeting. The group may consist of siblings and family members but can also include medical or legal professionals. The team’s purpose is answering questions such as:
- Various types of housing based on the needs, such as assisted living, memory care, nursing home, in-home care or your home.
- Medical care based on the needs
- Income versus expenses
- How financial shortfalls will be met: government programs, private programs, sell the house, reverse mortgage, contributions from the children and how much
- Who will be in charge of organizing the elderly parents’ finances and care
- Documents that allow a person to handle their parents’ finances and care: general power of attorney, healthcare power of attorney, healthcare designation form, etc.
Finally, bring all the information together. Formulate a plan. Execute the plan. That sounds simple, but this is a time-consuming process. And don’t be surprised if the family dynamic of cooperation that existed in the first family meeting deteriorates into something completely different as siblings begin to make excuses, back away from earlier promises to help, and push their responsibility onto other family members.
Here are some resources that will help you begin the Parent Planning process.
AARP Planning Guide for Families. https://assets.aarp.org/www.aarp.org_/articles/foundation/aa66r2_care.pdf
The National Council on Aging Benefits CheckUp.
Home Instead Senior Care-An Action Plan for Successful Aging. https://www.caregiverstress.com/wp-content/uploads/2014/07/4070_Aging_Plan_US_Web.pdf