Caring for Aging Parents: The Essential Planning Guide

In an era marked by unprecedented longevity and shifting family dynamics, caring for aging parents is a challenge that many Americans are facing. Given the large population of baby boomers, these numbers have increased significantly over the last several years and will continue to do so. Here are a few statistics illustrating the enormity of this growing situation:

• A recent American Association of Retired Persons (AARP) study found as many as 48.1 million adults in the U.S. are serving as a caregiver to someone over age 50.
• The Pew Research Center estimates that approximately 15% of U.S. adults are caring for another adult without receiving compensation.
• Research from the Family Caregiver Alliance show that women are more likely to be providing this care as almost 75% of the caregivers in the U.S. are female.

Where to start

While these numbers may seem overwhelming, there are several steps you can take in advance to prepare in case you ever find yourself in the role of caregiver. To involve aging parents and ensure their wishes are clearly known, start the conversation about life planning earlier rather than later. If there are multiple children, schedule a family meeting with a clear agenda and objectives to confirm everyone is on the same page.

Understanding your aging parents’ needs

To begin, it is imperative to get a grasp on your parents’ overall physical and mental health. The conversation should address ongoing health issues, which medical providers they are using and any upcoming routine or one-off medical appointments. Make a list to document as much information as possible, adding in things like contact information for various providers and medications.

While this next step is often overlooked, it’s important to talk with your loved ones about what a typical day looks like for them. Learning about small tasks that might not be top of mind, such as getting mail or caring for a pet, can be valuable. This is also an opportunity to make observations and be sure that daily obligations can still be safely handled independently.

This can be a good time to talk through what is going well now, while also talking through their desires if the situation changes. Determine if there are other family members, friends or neighbors who could check in or help with day-to-day tasks as needed.

Financial and legal concerns

While there may not be a need for much ongoing support presently, it is important to think ahead so you can start addressing financial and legal concerns. If your loved ones work with a wealth advisor, this is a great time for you all to meet to review their assets and find out more about their overall financial situation. Start with a basic net worth analysis to determine what they own and if they have any debts. It is also important to help ensure their investment allocation still aligns with their current and upcoming spending needs. A financial advisor will be very helpful in providing guidance around the finances, specifically the investment allocation and long-term spending plan. It is imperative to have legal paperwork in place so that your parents’ wishes are documented. This includes a will, trust, financial power of attorney, medical power of attorney and a living will. A meeting with an estate planning attorney may be necessary to get these documents drafted or updated to reflect their wishes.

Care options

According to the Administration for Community Living (ACL) website, someone age 65 has a 70% probability of needing a form of long-term care services, and approximately 37% of people will need some type of care within a living facility. It is helpful to talk through what your parents’ wishes are if they need a higher level of care, while staying realistic about their options.

If a long-term care insurance policy is in place, review this in advance to determine what coverage is available. Typically, one cannot file a claim for this type of insurance coverage unless a person is unable to perform at least two activities of daily living (ADLs). However, once that criteria is met you may have options for in-home or out-of-home care, so it is important to understand what the plan covers and the policy’s parameters.

In-home caregiving possibilities may be performed by an unpaid family member or friend. Alternatively, you may hire a nurse or home health care aide to come into the residence. There are transportation services often available through local resources that can help provide a ride to appointments. It is also important to consider utilizing local resources to provide caregivers relief temporarily as needed. There are services such as adult day care centers or respite care facilities that are helpful to have lined up.

Many options are available for living outside the home. Independent, assisted living and memory care facilities can provide varying degrees of support. If you have the financial means, it might make sense for parents to move into a facility before selling the home to ensure they feel comfortable in their new surroundings.

In summary, this list is not exhaustive and only scratches the surface of everything that needs to be considered when supporting the mental, physical, legal and financial needs of aging parents. The best advice is to start planning early and get professionals involved to assist in the process. This includes consulting with your financial team along with your parents to help build the appropriate plan.

If you are not currently working with an advisor, Buckingham would love to help. Please schedule a phone call or virtual meeting with a client development advisor.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. R-24-7000