I am writing to you live on Halloween, and I have come to tell you a scary story. Years ago I was sitting with a couple I had been introduced to by another client. We were getting acquainted and talking through their goals and objectives. The couple was already retired and looking for a new advisor after their other advisor had retired. The meeting was going swimmingly. Then, I asked them about their long-term care plans. What if they need care? How do they foresee handling that need?
Here’s where it gets spooky. They looked me dead in the eye, and said ‘Our children will take care of us’. The statement didn’t throw me off. I frequently hear this from clients and potential clients. Approximately 17% of American adults will have to care for an aging parent at some point in their lives1. That number could be on the rise as we live longer, and as our society is increasingly plagued by diseases like cancer, diabetes, and other debilitating conditions. Then, I asked the couple, “do your kids know this yet’? They paused, gave each other a puzzled look, and then responded, “probably not”.
Whoa. As a child of aging parents, this is a terrifying answer. My husband and I are working hard to save for our own future needs, while also trying to enjoy ourselves and live a comfortable life now. Both of us only have 1 other sibling, so if we were hit with a surprise, like having to fund nursing home care for 1 or more of our parents, that would be a massive hit to our budget. According to Genworth’s Cost of Care Survey in 2021, the average cost for a private room in a nursing home is $9000/month in the U.S.!
I was concerned for this couple and also for their children. Without some serious family conversations about expectations and potential needs, the couple could end up exhausting their assets too soon. If their kids couldn’t afford the care they needed, the couple could end up relying on public welfare programs like Medicaid, and trust me, no one’s first choice for long-term care would be a Medicaid facility. Their kids could be put in a position to overextend themselves and possibly exhaust their assets as well trying to get mom and dad the care they needed. If they couldn’t afford to help much or at all, would the kids feel guilty or responsible for their parents’ tough situation? There is potential in this story for not just a heavy financial burden, but a heavy emotional one as well.
Parents, I implore you, talk to your children about your plan for long-term care. If you are hoping that your child or children will be able and willing to help you, make sure to talk to them about it as early as possible. You want their buy-in before there is a need for their assistance. They will also need time to prepare for any financial impact this may cause, whether they are expected to help fund the care, or take time away from work to provide it. Even if you don’t anticipate needing their help, give them the gift of confidence in your existing plan.
Kids, I implore you, if the conversation has not yet been initiated, talk to your parents about their long-term care plans. The earlier, the better! There are tools like long-term care insurance that may be more economical than paying for care completely out of pocket, but time is of the essence. Even if your parents have a plan, you may be able to help them evaluate it and keep it up to date as they age.
If this scary story has you curled up in the corner, fear not. We can help. We have even moderated conversations between parents and adult children to ensure everyone is on the same page and that a well-designed plan is crafted. At Sirius, we believe planning is a family sport. Let’s all take care of each other by opening the lines of communication with open minds and hearts, so we can worry less and focus on enjoying the time we have left together.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. Guarantees are based on the claims paying ability of the issuing company.
1 KFF Health News. “The Toll of Caring for Aging Parents.” U.S. News, 23, Apr. 2018, The Toll of Caring for Frail, Aging Parents