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Balancing Your Retirement and Your Parents’ Long-Term Care Needs


It’s important to plan and save for retirement, but plans can quickly unravel when elderly parents need extra care.  Long-term care is expensive. 

When parents can’t afford it, adult children may feel they have to do whatever it takes to get care. Providing parents’ care can have major consequences for your own retirement; from your health to your ability to afford long-term care for yourself.  

You can’t prevent your parents from needing care; however, you can protect yourself by being proactive, communicating, and planning.   

The High Cost of Long-Term Care  

Long-term care can include help with activities of daily living; such as bathing, dressing and getting to the bathroom. Also, medication management, help with activities related to managing a health condition or even help with daily chores.  

Long-term care can be at home, in an Assisted Living Facility (ALF), or in a skilled nursing facility (SNF).   

Statistics show that assisted living costs $45,000 a year, on average, while you can expect to pay at least $20 an hour for in-home help. Nursing home care costs much more – more than $85,000 a year on average for a semi-private room.   

Many people wrongly believe Medicare will cover these costs, but for the most part, it doesn’t. Medicare will pay for a limited amount of time in a skilled nursing or rehabilitation facility after a hospital stay.  

It will cover medical care. And it will pay for some home health services. But Medicare won’t pay for room and board or custodial care. These non-covered costs make up the majority of long-term care expenses.   

Medicaid is another option that will pay for nursing home care for seniors who have spent down their assets. However, not everyone needs that level of care, and not every family wants to place their loved one in a nursing home.  

Adult Children Caught in the Middle  

When parents need long-term care, their children are often in their 50s or early 60s—the same years when the pressure is on to maximize retirement savings. If the parents don’t have the money to fully fund their own care, the children face difficult choices.  

Some people-particularly women—retire early to become caregivers to their parents. They’re no longer contributing to retirement funds, and they may draw a lower Social Security benefit at age 62; instead of waiting until full retirement age.   

Other families reduce or stop their own retirement contributions, dip into their savings, or even take on debt to help support an elderly parent.    

With medical and long-term care costs continuing to increase, and the alarming statistic that nearly 70 percent of today’s 65-year old’s will need long term care in the future, sacrificing your own retirement savings to take care of parents is a risky plan.  

Planning Is Key  

Planning for your parents’ future starts with communication. Find a way to talk to them about their finances—their retirement income, and their money and other assets. Find out if they have long-term care insurance and what it covers.  

Try to work together to map out a plan for their care in the future, should they need it.    

Another way to plan is to set up a consultation with an elder law attorney. These lawyers focus on issues that affect older people, including wills, trusts, Medicaid, powers of attorney and veterans’ benefits.  

An elder law attorney can review your parents’ estate planning documents and explain whether they need updating, advise your parents on strategies to protect their finances as they get older, and help apply for benefits your parents might be eligible for.   

If you have siblings, communicate and involve them as well. This increases the chance that everyone will be on the same page when it comes to helping your parents make decisions about their care.  

Taking Care of Yourself  

Airline safety announcements advise you to put your own oxygen mask on before you assist other passengers. And that’s a good way to think about your own retirement and your parents’ needs.   

If you haven’t already done so, meet with a financial planner or use an online retirement planning tool to estimate how much money you’ll need in retirement, and what you need to do to be on track to meet that goal.  

Being clear on your own financial goals will help you and your parents explore care options that both of you can afford.    

You also must think about how much caregiving you can realistically do, without compromising your own physical, mental and emotional health. When you understand your own personal and financial limits, it will be easier to set boundaries without feeling overly guilty that you can’t do more.  

Taking care of elderly parents isn’t easy. But by communicating and being proactive, you can plan for their care without sacrificing your future.