Preparing for the Future: Your Parents’ Long-term Care Costs

Planning for long-term care is like doing your annual tax return: Most of us would rather avoid it. But if you put it off too long, you’ll face financial penalties and the likelihood of having to make a decision when you’re least prepared. According to the University of Michigan’s National Poll on Healthy Aging, the majority of Americans between 50 and 80 want to remain in their own home as they get older. Yet only 19% felt sure they’d have the necessary support system to age in place.

Such widespread unpreparedness is one reason unpaid family members or friends provide about 80% of long-term, home-based care in the US. If your parents are in their 60s, it’s wise to ask them about the financial plans they have in place for the future. Asking about a loved one’s finances comes with a host of potential challenges, whether it’s your contributions toward costs or their reluctance to divulge information. But being prepared can help smooth the way.

Start the Conversation

Even if Mom or Dad has the financial acumen of Suze Orman, it’s vital to start talking to them about their assets and estate plan sooner rather than later. The last thing you want in a crisis is to be unable to access their financial details. All it takes is a stumble to have your loved one facing hospitalization, medical complications and the possibility of months or even long-term care. No matter how awkward it feels to ask your parents about their future planning, just realize that it may take multiple conversations to understand how they’ve planned for their future long-term care needs.

Do Your Homework

Did you know that Medicare doesn’t cover the cost of long-term care, but it will pay for a part-time home health aide? Knowing the ins and outs of Medicare home health coverage and other benefits in advance can help you and your parents get the most from the notoriously complicated American healthcare system. You will need to do your own homework, and perhaps think about your future needs, as you talk about this with your parents. The National Institute on Aging has a number of articles to help you understand long-term care and its costs.

Consider Professional Help

Brace yourself for hefty bills if you become responsible for a loved one’s care. An AARP study reveals that family caregivers spend roughly 26% of their income caring for their loved one. The average cost of a home health aide in New Jersey is $5,710 a month, according to Genworth’s Cost of Care Survey – and is projected to exceed $8,000 within the next 10 years.

As you talk to your parents, ask them if they’ve considered options for future needs, such as a tax-deductible long-term care plan, to ensure they have the care they need and prefer. Finding it hard to get your head around the figures or to convince your folks to face the facts? Experts recommend engaging the services of a fee-based, fiduciary financial planner to have a  frank discussion.

No matter what challenges may lie ahead, Fellowship Connected Living powered by Livindi offers a sensible, affordable smart-technology platform to help families navigate care needs. The app and tablet connect families to monitor a loved one’s health and environment, minimize day-to-day risks, and help older adults stay independent longer. Call us at 908-580-3869  to start the conversation and learn more about this cutting-edge service.