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Caring for Older Loved Ones: The Financial & Lifestyle Impact

According to the US Census Bureau, the older population in the United States is growing.1 When coupled with statistics from a study conducted by the Kaiser Family Foundation, those numbers may be cause for concern. The Kaiser study showed that medical costs for seniors are on the rise, and by 2030, seniors may be paying as much as 20 percent of their income for medical care.2 For those of us who are intimately involved with providing care for older loved ones, this is a serious concern. The figures show the potential impact on the finances and lifestyle of caregivers, forcing some of us to wonder how we will cope.

Financial Impact of Caring for Older Adults

Many of the baby boomer and pre-baby boomer generations believed in planning for the future. They set aside a significant nest egg to supplement their funds for healthcare costs and everyday living. Even with the benefit of their forethought, caregivers may still have to spend money. Medicare is not likely to cover everything, as the Kaiser study suggests, forcing seniors to buy gap insurance. Generally, applying for Medigap policy G is the most comprehensive health insurance, but does cost the most.  However, even with the additional coverage, it will not cover assisted living and custodian care costs. Pharmaceuticals are also more expensive than ever, and seniors may need home improvements such as ramps and bathroom modifications to make their quality of life better. They may want special furnishings such as a bed with rails or lift chairs. Costs can escalate quickly even with expanded Medicare health insurance.

One escalating cost may be the amount spent on gasoline. When adult children of aging seniors act as caregivers to their parents, they may spend a lot of time traveling. They may be asked to run errands like picking up groceries and medicine or simply to come over and watch sports. It may be that the travel becomes too taxing financially and physically, and it comes time to consider a different solution.

Just as there exists a phenomenon of adult children moving in with their parents to save money, many seniors may choose to move in with their adult children. It may be difficult for seniors to take care of themselves even if they are financially able. The only alternative may be an assisted living facility.  

A Continuing Care Retirement Community (CCRC) is a place where seniors live together in a retirement community.  You would purchase a small apartment on campus but would have access to community events and medical care.  As you age and need additional support, you could move to a more hands on assistance part of the same campus.  The convenience and the sense of community are what make CCRCs so desirable.  However, they do come with a hefty price tag.  There is a large upfront cost to buy into the facility in addition to a monthly charge to cover services (meals, utilities, shuttle service, on-site nurse, security, maintenance, etc).

Changing Lifestyles

For extended families with close ties, having more adults in the house can be a benefit to everyone. Aside from reducing housing costs, a younger couple with children may come to love the free babysitting and the kids will certainly love the adoration that come from interacting with a grandparent.

However, the lifestyle changes that come with parents living with their adult children may be challenging. Busy adults may find themselves with less free time as they become on-call service providers for their older parents and children. The grandparents may relish finding themselves in the familiar role of ruling the roost; yet, previously independent adults may bristle at advice and demands from their parents.

Planning to Care for Older Adults

The challenges presented by caring for an older loved one may be mitigated by some planning and good communication.

  • Older adults can discuss their plans and lifestyle goals with a financial advisor. It’s never too late to discuss making plans for care or plans to adjust to health care issues that may arise.
  • If you are a younger person, you can talk with a financial advisor about how to include caring for your parents later in life.
  • There are options to find a way to meet financial obligations even if you haven’t included them in your savings plan.
  • If you are preparing to share space with your parents or grandparents, sit down and talk about what the boundaries will be.
  • Discuss with a financial advisor the pros, cons and costs of a CCRC facility to see if it may be a suitable fit.

AARP reports that a Pew Research Center study showed that more older adults are living in their children’s homes in much higher numbers than a generation ago.3 If you are involved in the care of your parents you aren’t alone. Seek out resources and information and find out how others have handled the impact on their lives.

1 https://www.census.gov/newsroom/press-releases/2017/cb17-100.html

2 Cubanski, Juliette Follow, Tricia Neuman, Anthony Damico, and Karen Smith. "Medicare Beneficiaries' Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future." The Henry J. Kaiser Family Foundation. February 01, 2018. Accessed July 24, 2018. https://www.kff.org/medicare/report/medicare-beneficiaries-out-of-pocket-health-care-spending-as-a-share-of-income-now-and-projections-for-the-future/?utm_campaign=KFF-2018-January-Medicare-Out-Of-Pocket-Spending&utm_source=hs_email&utm_medium=email&utm_content=60277390&_hsenc=p2ANqtz-8lAu2nlWVjxseCbfaljrRhqGs9hsPpFrLOlvyjzJlL1FcBXJDBO0lbyuAAhQaQVa8bUOPIetzdziyuGRjbGavquscudQ&_hsmi=60277390.

3 https://www.aarp.org/home-family/friends-family/info-2018/adults-live-with-children-fd.html