With modern technology and medicine, people are living longer lives. Many children find themselves caring for their aging parents while raising children of their own. The financial costs for caring for aging parents can be expensive, and approximately 25% of people have no savings. What options do you have for taking care of your aging parents when your resources are limited? Here are some tips for handling finances associated with caring for your elderly parents.
One of the first expenses you may face when caring for your elderly parents is arranging accommodations so they can live with you. There may be one-time moving and storage costs to remove them from their current living situation. Your parents will need a space of their own, which may be difficult if you already have a full house. You may have to do a first floor remodel in your home or add on a room to accommodate your parents’ needs. Your parents may need building ramps to enter and exit, or you may have to install safety equipment in the bathroom.
Everyday personal needs will need to be considered in your household budget as well. Your parents may need their living conditions to be warmer than you normally have in your home. You may need an HVAC company to install a heating and cooling system so your parents can be comfortable if you choose to build them a space or room of their own. There will be additional food and personal care expenses each month to your household budget. The costs for utilities and entertainment are likely to rise as a result of your parents moving in with you.
Before your parents move in, consider what additional costs you will incur when caring for your elderly parents, and make a budget for those expenses. Depending on your situation, you may be responsible for helping your parents pay their own personal debts and expenses. If you can’t afford these additional expenses, you’ll need to seek out resources where you live to help you. You may want to have a conversation with your elderly parents to use any benefits they receive to offset these expenses. Another option to discuss with your parents is getting a larger portion of the inheritance because you had to be responsible for extra costs.
Monthly Household Medical Expenses
Besides food and personal care costs, there may be many everyday medical costs when caring for your elderly parents. There can be out-of-pocket costs for prescriptions and co-pays for doctor’s visits. Your elderly parents may take over-the-counter medications, vitamins, and supplements. They may need mobility aids such as a walker or a wheelchair or other safety devices to prevent accidental injuries. These monthly household medical expenses can add up quickly, taking up about $5,000 in annual expenses on average for caregivers.
Some of these monthly household medical expenses may be partially covered by Medicare and private insurance. Depending on your household income, you may be able to deduct these expenses by filing your parents as dependents on your tax returns. There are federal, state, and local programs that can help your elderly parents pay for these expenses. Discount programs are available for things like eyeglasses and prescriptions. You can buy items like vitamins and supplements and other personal supplies in bulk for your elderly parents to save money throughout the year.
Caring for Your Parents at Home
Many elderly parents have chronic health conditions or skin issues requiring constant care. Hiring professional home care services to care for your aging parents can be a big hit to your budget. The average cost for a home health aide in 2019 was around $4,000 per month. Many adult children chose to take on these caregiving duties as much as possible in order to save money. Taking on these duties yourself can cost you over $300,000 in retirement benefits and lost wages, according to a MetLife study.
Before deciding to become a full-time caregiver, determine what costs you may incur from leaving a job. You may have to replace the medical, health, and dental benefits you currently receive from your employer. Your employer may have resources you can take advantage of to care for your elderly parents. You may be able to receive assistance through the Family Medical Leave Act or other similar programs. If you do lose your job, you may be eligible to receive public assistance to help pay for your own household expenses.
You may be able to get paid for caring for your elderly parents. Public programs often provide financial assistance to caregivers to help offset expenses. Veterans benefits also pay for certain services for low-income families. Medicaid offers cash and counseling programs specifically for caregivers. There may be other local community organizations in your area that offer financial assistance to help you care for your elderly parents.
At some point, professional home health care may be required for your aging parents. As your parents reach the end of their life, they may need to obtain hospice home health care, which may be covered by their insurance. Medicare typically covers up to 85% of these costs. You may want to make sure that your elderly parents have supplemental private insurance that can cover the rest. The sooner you can get these insurance policies, the better off you may be as insurance rates rise with age.
Choosing an Assisted Living Facility for Your Elderly Parents
Your household budget may not be adequate for caring for your elderly parents at home. Another option you can consider is choosing an assisted living facility with on-call staffing. This option is best suited for elderly parents who can still do most things for themselves but need some assistance from time to time. There are many facilities that offer amenities for your elderly parents to take care of their health, such as a private gym with a stairclimber, pool, and other weight equipment. These facilities also arrange many social activities your elderly parents can engage in to help keep them active.
Assisted living can cost anywhere from $3,000 to $6,000 per month, depending on the amenities provided. This can be more affordable than spending $5,000 to $10,000 monthly on nursing home costs. There are a few ways you can pay for assisted living facility costs. You can use veteran’s benefits, annuities, long-term care insurance, or life insurance that has living benefits. You may also want to consider a reverse mortgage or pooling family resources with other family members.
Pets provide many crucial health benefits for senior citizens. If your elderly parents own a pet, they may need assistance with pet care such as grooming and daily walks. Some assisted living centers offer staff or third-party services to help care for their residents’ pets. Each facility has its own rules and regulations regarding pet care. When choosing an assisted facility, make sure you understand what the facility’s policies are before signing a lease.
Legal Representation You May Need
You may need to consider retaining legal representation when caring for your elderly parents. Many senior citizens are vulnerable to personal injuries as well as abuse and exploitation from others. Having a lawyer can help them recover compensation for damages they may have incurred. You may need a slip and fall accident lawyer if your elderly parents were injured at a nursing home or assisted living facility. A lawyer may also be needed if a medical professional prescribes dangerous medications or is negligent with their care.
Another reason you may need legal representation when caring for your elderly parents is in regards to protecting their estate. If you plan to have your parents live with you or move into another facility, you may need to sell their current home. Selling your parents’ home can have a significant effect on their estate and may have certain tax consequences. You may want to consider hiring a real estate law firm to help you navigate through the process. Certain legal documentation may be required if you will be selling their home on their behalf.
The costs for legal representation will vary depending on what services you need. Some elder care attorneys charge by the hour, while others charge a flat rate. It can cost you anywhere from $125 to $600 per hour depending on where you live. Many lawyers offer free consultations, and some lawyers only charge you for their services if they win your case. These costs can be worth it if they help you save or receive thousands of dollars.
Planning for the Future
When caring for your elderly parents, it’s important to help them get their finances in order. You can ensure that their future is protected by using estate planning services to make plans for their assets, health care, and funeral costs. Estate planning is a process that many families don’t like to discuss, but it’s important to address in order to protect elderly individuals before it’s too late. Proper estate planning can ensure assets aren’t taken by creditors and are divided equally among beneficiaries.
Start with focusing on essential documents your parents will need for their estate. This includes a living will, durable power of attorney, and a trust. There may be court fees you’ll have to pay to set up these documents. You may want to consult with an estate planning attorney who can help you with the specifics of your situation. It’s also a good idea to consider purchasing an affordable life insurance plan. This can help cover funeral costs and other expenses after your parents pass away.
In order to handle estate planning for your elderly parents, you may need to establish guardianship or have a legal power of attorney. If your elderly parents become unable to make decisions for themselves due to an illness or injury, it can be disastrous if you don’t have these documents in place. Having an estate plan will allow you to make legal decisions regarding their health care and assets in this situation. If other family members decide to challenge a will or asset distribution in court, it could save you thousands of dollars.
The costs for an estate planning lawyer vary based on the services they provide. The fees can be charged on a flat rate, billable hour, or contingency basis. If you need a simple will or power of attorney, you can get these documents drawn up for around $200 on average. If your eldery parents don’t have much in assets, you can save money by doing the majority of the estate planning yourself. There are online software programs for estate planning you can use to guide you through the estate planning process.
Increased Personal Health Care Costs
Caring for your elderly parents can create a tremendous strain on your physical and emotional wellbeing. Caregiving can be highly stressful, which can cause your immune system to not work as effectively as it should. At the same time, many caregivers lose their medical insurance because they are no longer working outside the home. The best way to prevent increased personal health care costs is ensuring you spend time caring for your own health. Enlist help so you can get out a few times per week to exercise and get a mental health break.
Unresolved emotional issues can arise when you move your elderly parents into your home. You may need therapy sessions to deal with these unresolved issues and the stress from caregiving. Join support groups that can help you learn strategies for coping with caregiving responsibilities. You’ll need to learn to set boundaries with difficult parents to prevent burnout. By taking care of yourself, you can save money by preventing any medical issues caused by stress.
The financial challenges associated with caring for your elderly parents can be incredibly complex. It’s important to consider your financial assets as well as your parents’ assets when taking on this tremendous responsibility. There are state and community resources you can access for help when paying for care for your elderly parents. You don’t have to care for your aging parents alone. Reach out for professional financial assistance in your community so you can provide the best care for your elderly parents.