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Babysitting is both rewarding and challenging, whatever the circumstances. But when it comes to caring for your aging parents, things can get tricky. These are the people who brought you into the world. It’s moving, overwhelming – and sadly, it can also be expensive.
Although I am not a life coach or therapist, I believe those who are called upon to care for aging parents can benefit from planning ahead, both emotionally and financially.
As our parents enter the golden age of their lives, there are many uncertainties to consider. For some, retirement funds may be depleted too soon, and for others, it may deteriorate. Although some of these developments may be beyond our control, there are things we can do to lessen their impact.
1. Prepare all estate planning documents
Most people are familiar with the most popular estate planning document, which is a strong will. However, while obtaining a will is an important first step, ensuring that an advance care directive and financial power of attorney are in place is essential when caring for aging relatives.
An advance care directive is a document outlining your medical wishes if you are physically or mentally unable to make them known yourself. Obviously, this is a crucial document to have if you are making medical decisions for an aging parent.
Over the past few years, during the COVID-19 pandemic, we have seen a significant increase in the number of people getting advanced care guidelines. And that makes sense: we are in the midst of a global health crisis, and this document has multiple uses.
An advanced care directive can ensure that a patient’s wishes are carried out regarding organ donations, end-of-life decisions, pain treatment, and the use of specific medical equipment such as dialysis machines. .
But this is not the only important document to secure. While the Advance Medical Directive handles medical decisions, a Financial Power of Attorney appoints someone to make financial decisions for you if you are unable to. As the caregiver of an aging relative, you need this document on hand in case you need to access your loved one’s funds for their own care.
The financial power of attorney allows you to carry out day-to-day and major financial transactions, such as banking, paying bills, managing tax issues, processing transactions with beneficiaries and managing government benefits such as social security. and health insurance. You definitely want to have it on hand if you’re in charge of a relative’s affairs during their sunset years.
2. Prepare financially and physically for healthcare costs
The health costs of an aging parent can be minimal, even astronomical. Given this uncertainty, you will probably want to transfer this financial risk to an insurance company rather than to your own bank account.
With nearly 70% of Americans who are 65 today and need some type of long-term care service, the average length of care being three years and the average amount that one person over age 65 spends on long-term care services alone is $138,000. This can severely drain his nest egg if no plan exists.
A popular way to mitigate this risk is to purchase a long term care insurance policy. These policies not only help with financial burdens, but they can also provide other services such as adult child care and home care.
An often overlooked issue when caring for aging parents is caretaker wear and tear. The average family member caring for someone spends about 24 hours a week, and the average spouse or partner spends 45 hours.
Can you imagine the physical and emotional toll it can take on you if you are caring for your own children, or if you are approaching your golden age and no longer have the physical strength? Unfortunately, situations like this can seriously exhaust even the most devoted adult child.
While most people see long-term care as a tool to mitigate their financial risk, it can indeed be much more: it can give you the physical and emotional break you need.
3. Talk about it
Even with the right planning strategies discussed in this article, lack of communication with loved ones will hamper any plan. While your parents are of sound mind and body, sit down with them and have those tough talks — don’t wait until it’s too late.
And if you are a parent reading this article who may need care, please discuss it with the person you have chosen to help you through this season of life. Too often I see parents who don’t want to have this discussion, and you risk handing someone over to care for someone who doesn’t feel comfortable doing so.
Although this conversation is difficult to have, everyone needs to be on the same page, both the caregiver and the recipient. And with the right amount of planning in place, even this difficult dynamic can be more rewarding than difficult.