How to Find Balance: Your Legacy and an Aging Parent’s Needs

If you have elderly parents with health problems, you might be facing the need to provide critical financial or practical support. In our experience, this is an extremely challenging time for children who want to give their parents everything they need, but who may be facing logistical or financial constraints themselves.

As with most things in personal finance, there is no single “right” way to approach this issue. But you can make progress towards reaching your own goals with some careful consideration and prudent planning.

In this article you’ll find our tips and guidelines to finding a stronger path forward for your family. In all cases, we’ll assume that you’ve exhausted Medicare benefits and that your expenses go above and beyond those covered by your loved one’s insurance and income sources.

Let’s get started.

Mind the caregivers

One of the most overlooked costs in caring for elderly relatives is time. Whether it’s as involved as everyday in-home assistance or the occasional running errands and helping out around the house, care can be time-consuming – which can have both personal and financial repercussions.

For many families, the trade-off is easily worth it on a personal level. But if you’re spending significant time as a caregiver it’s important to take steps to safeguard your financial future, especially if you’ve seen reduced income or loss of career opportunities as a result.

If caring is having an impact, consider taking a big picture look at your financial plan to help make sure you can stay on track towards your goals.

For example, you might consider adjusting your family budget to help boost your savings, or work towards alternative income sources to help make up any losses. For married couples, be sure your retirement savings plans account for both parties – women tend to provide most caregiving, and they also tend to live longer – so that your plan accounts for both present and future needs.

Know your financial limits

If your parent or family member needs in-home or nursing care, you may have seen the potential price tag – and experienced the sticker shock. Elder care services are notoriously expensive, and with healthcare costs expected to rise about 6.5% in 2018, continuing a decade-long trend of high inflation, it’s wise to stay aware of the possible impact on your finances.

First, consider what you can feasibly afford to pay – depending on your situation, this might be a one-time expense, a monthly line item for some period of time, or an ongoing part of your annual budget.

If you’re looking at shortfalls, consider your options.

cloud-download

​​​How To Manage Your

Family's Wealth

Access Your Guide Below

You might want to ask yourself:

  • What assets are potentially available to help cover costs?
  • Can we structure our loved one’s finances to help them qualify for more benefits?
  • How can we save on costs without sacrificing quality of care?

These are open-ended questions because, in practice, this is an open-ended process. But there is a wealth of strategies out there that might apply to your situation, which is where a financial advisor can be a significant help.

We also recommend discussing these issues with your financial advisor. You may want to make tax-sensitive choices about where the money should come from, or how much you can dip into savings without risking your future planning.

Build your resources

Whether you’re an only child or part of a larger clan, there are ways to get help with this planning process, which can sometimes feel overwhelming.

For example, we recently had a client, Sarah, whose aging parents were respectively suffering from health problems and dementia. Sarah’s older sister, a freelancer, offered to move into the family home so that their parents could age comfortably in place, but she was concerned about the risks. Namely, caring for their parents would require moving and would have a significant impact on her income.

This family’s solution? Everyone got together to redraw the inheritance plans, so that some assets could be freed up to provide immediate support and so that Sarah’s older sister could help protect her own financial future. The whole family got the benefit of knowing their loved ones were getting needed care, while Sarah could breathe easier knowing that she also had resources in place for her own future.

If you’re an only child or don’t have this kind of dynamic, keep in mind that there are also support programs available to caregivers.

Contact your local department on aging to learn about the federal Family Caregiver Support Program and any state or local programs that might apply to your situation. If your family member has a specific disease, like cancer, you might consider investigating organizations that may offer practical, financial, or other forms of support to caregivers.

In all cases, our key advice for caregivers is do not forget yourself. While it can be satisfying to contribute to your loved ones, that contribution should not come at the expense of your ability to care for yourself and your future.

It’s possible to do both, though that doesn’t always make it easy. But by taking the time to understand both your needs and the needs of your family, you can start to think more strategically – and get closer towards your goals.

Are you also thinking about the younger generation?

Helping your children may just one part of a larger plan to provide opportunity and resources to your family. Download our free guide to full family financial planning, From the Bucket List to the Bank, for more tips and ideas on estate planning, forging family bonds, and managing the risks that come with a multi-generational approach to wealth management.

Download our free guide and take the reins of your family legacy today!

cloud-download

​​​How To Manage Your

Family's Wealth

Access Your Guide Below

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

Important Disclosures

& Associates Insurance Services or United Planners Financial Services (United Planners). The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.

Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Pasquale Vitucci, CA Insurance Lic. # 0758212, is an Endorsed Agent of Vitucci & Associates Insurance Services CA Insurance Lic. # 0I06319. Vitucci & Associates Insurance Services and United Planners are separate and unrelated companies.
This page contains links to third-party company websites. By selecting a link, you will be leaving our website and launching a new browser window. These links are provided for informational purposes only and should not be viewed as an endorsement, sponsorship, solicitation or other affiliation with respect to any third parties. We are not making any recommendations or providing any advice on securities in particular or investments in general. Neither Vitucci & Associates nor United Planners Financial Services have reviewed the content of, and are not responsible for, the information or the results of the third-party websites.
Further Reading:

Caregiver demographics: https://www.caregiver.org/pilotIntegration/indexPersistent.html?uri=%2Fcaregiver-statistics-demographics

Resources for caregivers: https://www.pbs.org/newshour/health/paying-long-term-care

Healthcare cost inflation: https://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers.html

  • Buying A Retirement Home? Don’t Forget About Taxes!
    If you’re looking for a new home in retirement, you might be considering buying as much house as you can afford. This is retirement, after all! But that’s not always a prudent decision. One of the key downsides to buying “more house” is the potential for more property tax. It’s one of the less glamorous aspects of home ownership, but it can be an important source of additional costs that eat into your retirement budget – and it can take even savvy home buyers by surprise. How can you be a property tax strategist? Read on to learn more.
  • 5 Ways to Use Life Insurance in Retirement
    For some retirees, life insurance isn’t a necessary expense. This can especially be the case if you have an income plan for both spouses, a clear-cut estate plan, and no dependents. But sometimes life insurance coverage can be a useful part of a retirement plan. Of course, making insurance coverage decisions can be complicated: buying a new policy is a far cry to adding features to an existing one, and in all cases it’s important to do your homework so that you select the right options for your needs. Be sure to speak to your financial advisor about your needs and the appropriate solutions. With that in mind, let’s get started.
  • Don’t Forget This When Considering an Annuity
    As you build your retirement income plan, you might have felt the tug between two competing interests: stable and predictable income versus holding on to your assets (or trying to invest them to make more money). Fixed annuities in particular tend to bring out this internal conflict. For example, we had a client, Edward, who identified retirement income security as his most pressing retirement concern. But when we talked about the possibility of a fixed annuity for his situation, he balked at the idea of relinquishing his savings to buy it. His questions were common ones: “What if I die in 5 years? What if I want to leave money to my kids?” While it might not seem like it from the outside, this is an absolutely normal response. When considering any financial decision, it’s all a matter of perspective – and there’s nothing like writing a big check to bring your perspective into sharp relief. That’s why it’s important to remember what you’re buying when you choose an annuity (or any other insurance or investment product), and to frame the decision accordingly. Here’s how.