As a nation, we are aging rapidly. According to the U.S. Census Bureau, America's 65-and-over population is projected to nearly double to 88 million by 2050.
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This means that in families across the country, kids and parents are going to be switching roles. As parents age, they are becoming their own kids’ children in many respects, requiring time and care as well as sometimes creating a financial burden.
One issue is that aging parents can lose their mental faculties. The Alzheimer’s Association says that every 65 seconds, someone in the U.S. develops Alzheimer’s disease (now the sixth-leading cause of death). This can create additional long-term care needs for parents, meaning an emotional and financial burden on adult children.
Even parents who age without severe mental incapacitation may not be able to remember things sharply, or their physical limitations may create difficulties in living independently. So, you must know your parents’ long-term plans and how they will affect you.What can you do to make sure that you are prepared as your parents age? Below are some places to assist you today and as your parents go through the aging cycle.
1. Have a family discussion. Talking to your parents now may be uncomfortable but will save you significant stress, time and even money down the road. Debra Feldman, an Aging Life Care Professional at Debra D. Feldman & Associates Ltd., has this advice: “In order for your parents to preserve their autonomy, they must express their wishes. It is never too early to begin talking with your parents about their priorities in later life. We know parents don’t want to be a burden on their families; to prevent this from happening, families need to talk.”
As for what needs to be discussed, Feldman says, “[Parents] need to talk about their healthcare wishes, discuss the ‘what ifs’ and finances to learn what options they may have for care.”
Sheri E. Warsh, an estate planning attorney and partner at Levenfeld Perlstein LLC, agrees. “It is important that adult children understand details of their parents’ financial situations before they are unable to communicate due to incapacity or death,” says Warsh. “Children can break the ice by using their own estate planning experience as a basis for asking important questions.”
Also, the Death Over Dinner website, which helps you to plan and guide discussions on these topics, andthe Funeral and Memorial Information Council’s Have the Talk of a Lifetime website, are resources to make the conversation with parents easier.
2. Put family affairs in order. My team and I created the Future File system as a roadmap to help with gathering information, from medical history to powers of attorney to information on bills and subscriptions. As we worked on the system, we realized you need to organize information with your parents as early as possible. Organization of wishes and information related to aging and death now ensures that if your loved one has trouble remembering things or loses part of his or her memory at any point, you will be able to access everything you need.
While I suggest that you organize comprehensive information, from a legal standpoint, Warsh has this to say: “At a minimum, children need to make sure that their parents have a will, a trust or both; durable power of attorney for property; and durable power of attorney for healthcare.”
3. Figure out parents’ long-term financial needs. The financial implications of aging and passing are staggering. It is extremely expensive to provide care for aging parents. Mike Padawer, president of INERTIA Advisor Services Group, advises that you and your parents speak to a financial adviser about later-in-life healthcare costs. Padawer says: “How much of your parent’s hard-earned savings is currently allocated to pay for healthcare in retirement not covered by Medicare? Without some planning, all of it will be until you qualify for Medicaid. Simply reallocating a portion of those dollars in a parent’s asset allocation can provide significant protection for expenses associated with aging and help maintain independence.”
Scott W. Johnson, owner of Whole Life Vs. Term Life Insurance.com, adds: “Sad as it is to say, it’s a lot more expensive to live than die, so many retirees don’t need just life insurance. What they really need is long-term care insurance. As the average lifespan has gone up, so has the amount of time retirees are spending in assisted-living centers. Advise your parents to consider long-term-care insurance before their health starts to deteriorate, when they are in their 50s or 60s. If you wait too long, it might not be possible to secure a policy.”
4. Stay involved. As parents age, watch for signs of anything that might be off. You don’t want a parent driving that shouldn’t be on the road, and you might even need to check their bills to make sure they are being paid in a timely manner. If you aren’t near your parents physically, or perhaps need additional assistance, consider getting someone to help you with the care management of your parents. Aging-care professionals can physically attend doctors’ visits, act as liaisons with care facilities and provide you with regular updates.
While the challenges of an aging parent may not have been your vision for your middle-age years, some good planning today can help make it easier for you and your family to deal with the future.
Carol Roth is creator of the Future File legacy planning system, a “recovering” investment banker and a New York Times bestselling author.