Taking Care of Elderly Parents and Your Options

As baby boomers start to age it’s becoming increasingly common for many children to bear the responsibility of finding ways to help care for their aging parents. One of the greatest problems that boomers and seniors will face as they age is uninsured health care costs. That’s right, long-term care assistance is NOT provided by Medicare or any other private health insurance. So, if you have parents or grandparents that are 70 or 80 years old, it’s important that you start planning exactly how you’re going to care for them. Here are the main options you’ll have to decide between.

Options to Care for Elderly Parents

Of course I realize each situation is different but what I really want to focus on here is what options you have available when you’re parents are unable to care for themselves.

1. Provide the assistance yourself

Statistics clearly show that there’s been a dramatic increase of households that have 2, and maybe even 3, generations living under one roof! This isn’t because the family members don’t have the money to live on their own, instead it’s more likely that elderly parents have to move in to be cared for by their children.

So, one of the options that you can consider is either (1) living close to your parents so you can reach them at a moment’s notice, (2) move in with your parents, or (3) have your parents move in with you.

As an advisor I’ve seen all three of these situations take place. I recently met with a lady that was retired and she spends every day with her parents caring for them. While they don’t live together, her sole responsibility is to be there when her parents need her.

Along the same lines, I met with a man in his forties about 6 months ago and he bought an RV and moved into his parents back yard. He was working part-time but he had succumbed to the reality that caring for his elderly parents was going to be his new, full-time responsibility.

2. Medicaid

If you’re unwillingly or unable to care for your parents, the government will provide nursing home care for them. The catch with this option is that your parents must be broke. While I’m not an expert on this topic, I know enough to be dangerous: if your elderly parent is unmarried then they literally cannot have any assets in their name in order for Medicaid to cover their costs of a nursing home.

However, if your parents are still together then the government requires that they spend down ALL of their assets (they will allow you to keep ONE car, a few dollars in savings, and even a modest valued home) before Medicaid will cover the costs for their long-term care needs.

The problem with this option is that many of the government provided facilities are not the greatest places in the world. I mean…come on…think about some of the other things run by the government.

Another big hurdle to get approved for Medicaid is making sure you’re not committing fraud. Many parents and families try to move assets out of their parents name (transferring the house or IRAs to their children) to make it appear that they are broke and therefore eligible for Medicaid; the problem with this is that the government now has a 5-year look back period, and if anything seems suspicious to them then your parents might not be approved.

3. Self-Insure

If you won’t be caring for your parents, and if they’re too “wealthy” (i.e. have anything to their name at all) to qualify for Medicaid, then paying for care out-of-pocket is an option.

In the Mid-West, a long-term care facility runs on average around $4,500 each month. I personally know of a few higher-end places that even run $6,000-$8,000! So, when considering this option it’s imperative that you know the full costs going in and figure out a plan on how you, your parents, or your whole family is going to cover the expenses.

In this option, it is possible for your parents to enter a long-term care facility, pay for the expenses by themselves, then, once all of their assets are depleted they may finally be eligible for Medicaid.

4. Buy Long-Term Care Insurance

As discussed in this article, preparing for a future that includes aging parents can be extremely difficult. The three options I’ve laid out above might not resonate with you and may sound a little overwhelming.

Understanding that long-term care needs aren’t covered by traditional health insurance, there is a product specifically designed to help families cover the needs of their elderly parents: Long-Term Care Insurance. In order to qualify for a Long-Term Care facility, your parents must be unable to perform 2 or 3 of the activities of daily living:

  • Eating
  • Bathing
  • Dressing
  • Toileting (getting on and off the toilet and performing other hygiene functions)
  • Transferring (unable to get out of bed or a chair)
  • Maintaining continence (controlling bladder and bowel movements)

Long Term Care Insurance is an option, and often a great one, for many people. The statistics suggest that as of right now 50% of people will need some sort of long-term care in their life. On top of that, the average stay in a long-term care facility is somewhere around 3 years!

In the above-mentioned option #3, can you grasp how much that would cost if you were to pay out-of-pocket for the full length of a long-term care stay? At a $4,500/month average and a 3-year stay, that brings us to a total of $162,000! Ouch…talk about putting a dent in your nest egg. And that doesn’t even factor in inflation!

While long-term care insurance is extremely difficult to get, it’s a viable option that you should consider. From what I’ve seen through quoting the product, I suggest looking to get long-term care insurance sometime between 50 and 65 years old. As with all insurance, the unhealthier you are and the older you are, the more you’re going to pay.

There isn’t a “right” or “wrong” solution when figuring out how you’re going to care for your elderly parents. The important part is that you start planning for it well ahead of time and make it clear within the family how it will all take place. If you’re interested in learning more about long-term care, I suggest that you check out Genworth site for some great information.

Are you currently caring for an elderly parent and how has your experience been? If not, what are you doing to help you or your parents provide for this inevitable stage of their life?

About the Author

By , on Dec 15, 2013
Andy Tenton
Andy is a 30-something New Yorker who turned his financial life around. He took charge of his finances, got out of debt, and is now working his way toward financial success. He is the publisher of WorkSaveLive.com.

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{8 Comments}

  1. My parents are still youngish and healthy, but my grandparents are in their 80s. My grandmother’s memory is failing and causing a lot of stress for my grandfather (a man who’s never cooked or clean a day in his life). Not only is it hard for him to see her cognition failing, it’s also hard for us (my parents and I) to know how much she’s forgetting (i.e. are there pots on the stove she’d forget if my grandfather weren’t there?). Getting old isn’t fun and it certainly isn’t cheap. I’m planning to talk to my parents about long term care insurance now, while they’re still young and healthy enough to lock into a decent plan (hopefully).

  2. Suzie says:

    Next to dealing with you or your spouse’s future care, this is a very important discussion to have as thoroughly as possible. That being said, nothing can really prepare you for it. We had to deal with this situation last year with both my mother-in=law and my father (father-in-law and mother are deceased). MIL situation was sudden and drastic, a complete 180 in 1 day. She fell and was hospitalized out of State. After a lot of stress and arguing with an out-of-state nursing home she was allowed to come home but her condition worsened and she died about 3 months later. The very next month my father was hospitalized and admitted to a nursing home. He has Alzheimer’s and had been living at home with me and my sisters sharing in his care. Blindness caused by optic nerve damage came on rather quickly complicating the situation even more. Fortunately we were able to find a “group” home for elderly (5 residents) to move him to where he gets around the clock care. One thing you neglected to mention which made a huge difference is checking into VA benefits. My father fought in WWII and is now receiving money and other benefits (hospice care) which has helped tremendously. The Alzheimer’s Association has also been a tremendous help with information and support. People grossly under-estimate the toll the stress of caring for a loved one 24/7 takes on them. You are fooling yourself if you think you will be different and will be able to handle it on your own. There are many other things to consider and you need to educate yourself on as much as you can far in advance. As we learned the hard way, waiting until the last minute makes things a lot more difficult than they have to be.

  3. My parents are in their 70s and are both fairly wealthy. My father is married to a slightly younger woman, so I’m not as worried about him as I am my mother. She and I have talked and she has the money to buy into a retirement village that has both an assisted living facility on site and a full care nursing home. This allows her flexibility to transition as she needs more care, but the cost is outrageous.

    Most people in her family live to be well into their 90s, so while she has a good bit of cash, it would disappear quickly if she wound up in assisted living or nursing care earlier than she thinks she might. She’s very active and at 71 still working as marketing director for an engineering firm. I guess for now I’m just glad we’ve already discussed it and I know what her thoughts are if something happens to speed up the transition.

    Am I happy that my mother has worked so hard to save substantial enough sums to afford life after retirement and possible long-term care? Yes, of course. Is she happy that her savings could disappear so quickly once she makes the move. Nope…not in the least.

  4. Caitlin says:

    My parents (there are 3 if you include my step-mother) are all in the their 50s, and they’re all still working. Fortunately, they are all planning for the future, and their care shouldn’t be much of a financial burden for me (the only child). If it came down to it, I’d take care of them. I hadn’t thought about long term care insurance, but it’s definitely something that I will mention to them!

  5. Crystal says:

    My parents and in-laws are in their late 50′s right now. If any of them ever need help, we will be taking them in to live with us and hopefully their own savings can cover any special needs like a nurse if necessary. Thankfully, our parents are savers and planners, so this should do it.

  6. My Mom and Dad have had to take care of two of their parents while they were in their last years. While they were happy to, it certainly puts a strain on their own needs and health. As a result, they purchased long term care insurance for themselves so as not to be a burden to anyone. I think having peace of mind is a huge relief to them.

  7. I really hope my parents purchase long-term care insurance within the next few years just in case. I’d definitely help them if I had to, but I’d prefer they properly insure themselves!

  8. Fortunately my Father earned a nice living and was a saver so he spared his children the burden of the cost of long-term health expenses. Planning for retirement health care costs while you are young is so important not only for yourself but your children!

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