Four Tough Questions about Aging Parents’¦ And Step Parents
I worry about my parents’ retirement plans and future medical care. As I’ve gotten older and more involved in the personal finance community, the prospect of my own retirement has come up more and more. I find I’m faced with the possibility of having to care for four elderly people. A little background: I’m 32; my parents were both divorced and subsequently remarried when I was 10. There are no step siblings.
My half-sister is fifteen years younger and I’m not sure she’ll be in a financial position to provide assistance when its needed. The good news is that my dad’s financially stable and already in a comfortable retirement. My mom, not so much’”she’s self-employed, smokes and has no health insurance. I thought I’d collect some insight and wisdom from QC readers on this issue.
Is it okay to criticize your parents for not being financially responsible? Clearly I wouldn’t tell a friend or stranger how to manage their money unless they asked me or were reading my thoughts within the contents of a blog. But if their savings decisions have a long term impact on me then it seems like I should have some input.
For now whenever I get a birthday check from my mom I slip in into a CD.
Is it rude to ask if there’s life insurance or inheritance? Personally I’m not banking on it being there. However given all my parents’ relative age disparities, life insurance or windfall could really help out with retirement and medical expenses if they should come up. (I should mention the rather morbid tidbit that all four of my biological grandparents died of cancer.)
If you have to have these conversations eventually’¦ then when is the best time? There’s no two more delicate personal topics than money and mortality. Having this discussion between healthy independent adults just seems a little strange and creepy. But when the conversations go from uncomfortable to urgent it’s possibly too late.
Is it our responsibility to take care of everyone 100%? Double parental medical and senior care expenses could derail my own agenda for retirement so I need to start thinking about what care I’m realistically able to provide. Unlike my parents I don’t have a next generation to look after me which puts me even more on my own, not to mention the potential diminishment of social security.
There are resources on this blog. Nina has written about long term care insurance, for example’”but I’m interested in readers’ opinion as well.
I should mention:
There is an upside to being gay and gray. I realize it’s kind of a depressing post so I’ll leave you with one comforting thought: In spite of our understandable fears about growing old, studies show that gays and lesbians adapt better to Aging than straights. We’re better at building support networks outside of our families and better at dealing with stigma.
How much of your financial strategy accounts for the care of others? How would you feel as parents? Let me know in the comments.
When not fearing for the uncertain future, Mike occasionally updates Broken Cupid, a dating blog for single gay guys.
Mike: You raise some excellent points. I’m not sure I’d start the conversation by focusing on life insurance or possible inheritance… then the conversation becomes about you. For me personally, I would keep the discussion on them and ask questions: Is their house paid off, how much do they have saved, how much credit card debt do they carry and if they have any safety measures in place (e.g. long term care insurance, etc.).
There’s nothing wrong with asking these questions out of love and concern for their well-being. I don’t know if your mom lives in Atlanta, but you could offer to help her with the bill paying process each month. This would certainly give you a view on her finances and provide the opportunity to help with her financial planning. Some adult children might think this is weird or intrusive, but I think role reversal is only natural at some point during our parents’ aging process. Better now to have some input than in ten years when it could much worse.
For now whenever I get a birthday check from my mom I slip in into a CD.
Oh, thank you. This is a good idea. I just had a birthday and I’m sitting on checks from my grandparents and my parents because, hi, I’m 29 years old and I have a 401(k) and a Roth IRA and private health insurance, if I want something I can buy it myself, and all six of them are retired. And my family is HUGE, it’s not like I’m an only grandbaby.
I think the cash from the grand’rents is going back to them during the holidays, probably in the form of a gift card (even though I hate gift cards) to somewhere they go a lot because otherwise they won’t take money from me.
These are all really good questions, Mike. And I really liked Nina’s suggestions about how to get the conversation started.
This is a toughie for me, since we (my partner and me) are the ones living within blocks of all the parents- and our siblings live out of state.
I can tell you my sister b*tches to me about my mom and stepfather going to the casino once a week. But does she ask them about the money situation- ‘course not. They have the house paid off, have his retirement pension, and basically are doing just fine in regards to their money. They go to the casino for lunch out and to spend about $30 bucks each in games. THATS IT. They don’t go to movies, have big cable bills, or basically do much of anything else that costs. On the other hand- my sister and her family eats out 3-4 times per week and my brother in law works 3 jobs to keep her in her McMansion and in the lifestyle of her choosing. Hmm. Someone who protests the most about what they themselves are….
Good post, Mike. And good for you to be thinking about these issues BEFORE a crisis occurs.
Another good approach can be to start talking to your parents about how they see their future in more general terms (their dreams) and then back into the more specific details (their plans). For example, while this is a little dated, many of my clients who were reluctant to talk about major health care decisions and end-of-life issues, responded to a conversation about Terry Schiavo’s situation and were then able to discuss their own wishes. Stories in your local news may also provide a good way to start a discussion.
Since financial often issues go hand in hand with health care issues, you can then move into that discussion. If no plans are in place or if what they have is outdated, then I’d recommend a visit to your local estate planning or elder law attorney depending on the issues. It may be time to talk to your financial advisors & insurance advisors, too. If parents don’t have the financial resources to pay for all their needs out of pocket, they will need to figure out whether long-term care insurance &/or planning for government benefits will help them.
Long-term care (lifecare) planning is definitely an area where waiting is dangerous. We are living longer, but aging typically comes with increased medical need. Many people don’t realize that Medicare won’t pay for nursing home custodial (non-rehab) care. For those who may need to enter a nursing home, proper Medicaid (Medi-Cal)planning may result in full or partial coverage of the nursing home costs without spending everything they have.
Here’s another little known program. Veterans 65 and up who served just 1 day during wartime or their surviving spouse, may be eligible for a Special Pension (Aid & Attendance) to help pay the cost of medical care. This money can help a parent stay at home longer since, for example, it may be used to help pay for in-home care.
Good planning for an aging parent is really a “team” project which can involve your attorney, financial advisor, insurance advisor, and a good geriatric care manager and still save a ton of money overall. The earlier parents address the issue, the better the chance they have to lead the team and create some peace of mind for everyone.
Good luck to you.
Maureen Lyons
Estate Planning & Elder Law Attorney
Long Beach, CA