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Personal Finance: How to plan for elder care

Mark Rogers
Mark Rogers

Health care costs for seniors receive a lot of attention, but many people fail to consider other important aspects of elder care. Tackling difficult conversations about elder care now helps you make informed decisions about this unavoidable stage of life.

Advances in medicine and nutrition mean that people live longer. According to the Center for Disease Control, Americans who live to age 65 have about 19 years of life ahead, including nearly 14 years in relatively good health.

Greater longevity may require more thought to elder care, including not only monetary savings but also legal and medical concerns. The Genworth 2014 Cost of Care Survey reveals that at least 70 percent of people older than 65 will need some degree of long-term care.

According to a MetLife Study of Caregiving Costs to Working Caregivers, 1 out of 4 adult children provides personal care or financial assistance to a parent. More than 65 million people spend an average of 20 hours a week caring for chronically ill or aged family members.

Planning facilitates better decisions and removes some roadblocks during a difficult and emotional time. Preparation includes having key documents in place, knowing which advisers to consult and conducting difficult discussions before decisions become critical.

A family meeting comes first in creating a plan. Ask each family member to express an opinion on necessary tasks and what responsibilities each family member assumes. If the family can’t agree, consider an elder mediator who specializes in resolving these kinds of disputes.

Include the elderly parent or other loved one who requires the care. Unless that person is now unable to make wishes clear, he or she has the most important role in your dialogue.

A planning team can help navigate such daunting issues as medical care; government health plans; private insurance; the types, location and cost of health care; and estate and agency plans.

Bruce Spector, founder and chairman of PinnacleCare, a health care advisory company, says, “I’ve had many trusted advisers – accountants, attorneys, financial advisers – for both my personal and business needs. But I had no trusted adviser when it came to some of the most important decisions I had to make, namely those that affected my own health and the health of my family.”

Among the potential team members:

▪ A financial adviser to help save for health care expenses and create or refine your estate plan.

▪ A private health advisory specialist to assess the older person’s situation and review medical records, living arrangements, possible caregiving needs and access to benefits.

▪ An accountant to advise about tax deductions related to claiming an elderly individual as a dependent or claiming a tax credit off the cost of in-home care.

▪ An attorney to prepare documents such as a living will and powers of attorney and a health care proxy, the latter two allowing loved ones to make decisions if an elderly person becomes incapacitated.

Distribute legal documents, contact information for professional advisers and lists of doctors and medications to each family member involved in the care.

Connect with professionals about long-term care facilities.

“Nursing and assisted living facilities offer varying fee structures and services compared with continuing care retirement communities,” says Andy Broder, attorney at the law firm Payne, Broder & Fossee, who specializes in elder care.

Bette Davis said old age is no place for sissies – one reason you might put off thinking about aging until called to serve as a caregiver or when life brings you face to face with getting old. A clear understanding of the issues can help you prepare for this life stage and the tough decisions that come with it.

Mark Rogers, executive director, family wealth director and financial adviser with Jbara and Rogers Financial Management at Morgan Stanley, is a personal finance columnist for AdviceIQ.

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