Finances are dicey for those simultaneously caring for their parents and kids
Over the last 20 years, the median-age for Americans (the median age is the point where exactly half the population is older and the other half is younger) has increased by about 3 ½ years. Today, the median age is 38.8 years.* Our population is getting older overall. Also evidenced by the fact that in the last week I’ve had two different people refer to those in their 90s as “young yet.” I laughed… but they were dead serious.
A consequence of this extended longevity is an expanding Sandwich Generation – adults that are simultaneously caring for their children and their parents. The generation Powwow aims to serve!
Whether they want the role or not, adult children often find themselves in the position of primary caregiver for their parents. Unfortunately, most are not prepared for that role.
We often find ourselves so engrossed in how fast our children are growing up that it’s easy to sometimes forget that our own parents are also aging. And one major health event can instantly create the need for care. So while they may have been saving for college, were they also socking away for assisted living? Finances (and even more importantly TIME allocated toward supporting family) can be very dicey for members of the Sandwich Generation.
If you haven’t yet, you should start to address elder care with your parents to make sure that they are comfortable in their last years. It’s never too early to start preparing for the responsibility of caring for parents in the future.
First, arrange your parents’ finances before illness or death makes it difficult or impossible to discuss it with them. I know it’s a taboo topic for older generations, but it’s imperative to at least now where to find information so you’re not completely caught off guard when faced with retirement community applications or an estate attorney.
If you can do one better than simply knowing where the files are, collect information about your parents’ assets, account numbers of bank accounts and other investment vehicles and passwords for online banking. If they have one, ask for a key to the safety deposit box and where they store their important documents.
When signs pile up that your parents may need help, make sure that they don’t accidentally neglect bills. Assign a family member to your parents’ day-to-day finances or consider hiring a daily money manager to assist with bill paying, budgeting and balancing the checkbook.
If you’re having trouble determining what debt may be outstanding, run credit reports with the major bureaus and analyze all mortgages, loans and credit card debt. I’ve experienced first hand when seniors, particuarly those with dementia, are convinced into opening store cards to purchase unnecessary household items, only to forget about it by the time its delivered. Or simply because they feel everything is so expensive, therefore relying on a HELOC or credit card makes it feel more affordable since it’s not reducing their account balance. If you find this to be your situation, help them get their balances to zero and put on a credit freeze. They might be eligible for government aid, or potentially it makes sense to just let the balances go to collections if good credit is no longer needed. It depends on the situation.
Get Documents in Order
It is also crucial that you create a durable power of attorney to name a person to control your parents’ finances when they no longer can. Without this, you might face significant delays getting the legal power to make decisions on their behalf. Guide your parents to also execute a health care proxy or living will to designate someone to make medical decisions while they are incapacitated.
Also review your parent’s current insurance coverage including Medicare benefits. Don’t overestimate how much the government program covers. The Employee Benefit Research Institute finds that Medicare only covers 51% of retirees’ health costs. You might need to look into an advantage or supplement policy to shore up mom and dad’s coverage. Using an agent can help. navigate the coverage and cost.
Talk to your parent’s physician and accompany them on visits to get a full understanding of their medical needs and future prognosis. Reach out to their pharmacist to guard against negative medication interactions resulting from prescriptions from multiple doctors.
While your folks are well, it’s a good time to record their wishes for which type of elder care they want. There are multiple types of care options, and what’s chosen may evolve over time. Potentially home care works for some time, but eventually assisted living and then a nursing home is required. While you may not know what’s needed, you parent can make selections of preferred agencies and communities, as well as the triggers for needing those levels of care.
Alternative to home and community care is living with you or another relative. Not everyone’s home and schedule is well suited for this arrangement, but in certain cases it be a workable solution. IE) The money spent on an assisted living could instead be applied toward building an addition + paying a relative to help.
Think about these costs and options now as you develop a future timetable. Even if your parents live with you, be prepared for additional out-of-pocket expenses, such as home health aides or adult day care when you’re unavailable, an electric stair climber, heart and blood pressure monitoring systems, and visiting nurse services.
If they insist on remaining home, occasional care isn’t the only thing you’ll have to account for. Food preparation. laundry, and delivery services might be necessary as well.
Transportation is also a huge issue for seniors, and the one I’m asked about the most. It may be difficult for your parents to give up the independence of car ownership despite declining eyesight and slower physical reaction. Even if your parents are not at this point yet, it still makes sense to have a conversation with them now to agree when it’s time to take away the car as their primary mode of transportation. I highly encourage you download my workbook Transition Triggers to help with this discussion.
If it’s not too late, find other modes of transportation for them to use while they still safely drive, such as popular app services and public transport. Your town or county might also have special transportation for seniors. Acclimating them now may relieve the worry about formally giving up the car when it’s truly necessary. The biggest issue is loss of independence. So having an alternative in place that’s been used and feels affordable hugely addresses the concern. Moving to a community can also address this issue as most provide medical and community shuttle services as part of the monthly fee.
There’s also the option of moving your parents to an area where there is more adequate public transportation and accessible services. The Villages in Florida and downsizing to a city apartment have become popular for a reason!
*Soon after publishing this blog, a CDC update came out stating that we’ve actually lost 2 years of longevity due to the double whammy of COVID and overdoses related to addiction. New York was hit especially hard, losing 3 years. Despite this, I’d still argue that those side-stepping these two specific issues will continue having a higher chance of a longer lifespan than generations before. But the biggest concern regardless of age itself is more about how healthy you are in the final years vs simply having more years.