Planning For Aging Parents

Most parents do not want to burden their children when it comes to care in their later years, other parents expect their children to care for them. The best way to balance these expectations is to discuss options for long term care long before the care is needed and to make financial plans now to cover needed expenses.

For example, parents can live in the home of the children or vice versa. What modifications would need to occur to make this necessary? Adding a separate apartment with a separate entrance? Remodeling a basement? Installing a wheelchair ramp? A walk in shower? If living together is an agreed upon plan, a budget should be established for remodeling costs and money set aside now. Assume costs anywhere from minor modifications of several thousand dollars to an addition costing $40,000 and up. 

Other options are the obvious ones: in home care, assisted living, nursing homes and other care centers. Review the costs. The average cost for in home care is $20 per hour; assuming 3 hours per day 7 days a week, this equates to about $1,680 per month or $20,160 per year. The national average monthly rate for assisted living is $2,500 or $30,000 per year. A nursing home averages $172 per day or $62,800 per year. 

Reverse mortgages are also another option to pay for home care. In simple terms, this is a loan on the equity of the home that is repaid when the older adult passes away or moves out of the home. Payments to the older adults are made monthly or given in a lump sum to be used for home care, repairs and other proejcts.

Researching long term care insurance is an option for many children who are able to pay or share premium payments with their parents. Long term care insurance, depending on the policy purchased, can cover costs for adult day care, home care, assisted living and nursing homes. A premium of $1200-2400 per year depending on the policy and the age of the individual when purchased looks favorable versus $62,800 for one year in a nursing home.

Many believe that in retirement expenses decrease. For some yes, for others with multiple health complications, expenses increase. There are health insurance premiums, medications, medical supplies, hearing aids, etc. It all adds up. Make a resolution to discuss long term care planning with your spouse, your parents or your children and reduce worry about the future.