Just finished Kathleen Connell’s new book Moving Up To Millions and wowsers, do I need chocolate. You see one of the big hits to a financial plan is the cost of caring for our elderly parents and Kathleen doesn’t pull punches when discussing this possibility.
According to Moving Up To Millions, 66% of us (and likely higher for us women) will take care of an elderly parent. Many of us will be taking care of children and parents at the same time.
Kathleen quotes $200,000 to support a parent in assisted care for 6 years in a private one-bedroom unit. Want to save a few dollars and take care of them yourself? Factor in at least an additional $7,000 a year (excluding the effects on your employment) on top of regular household expenses. That’s per parent (I have a Mom, a Mom-in-law, and a Father-in-law).
What does she suggest?
“Anticipate caregiver expenses when your parents are in their 60’s. Have a family discussion regarding financial options for funding health and assisted-living costs as your parents age. Secure long term care insurance for your parents, if they have no policy. Discuss a reverse mortgage as a vehicle for keeping your parents in their own home. Ensure that decisions are implemented by power-of-attorney instruments, which authorize to make medical and financial decisions.”
Hhhmmm… I don’t know if I agree with the reverse mortgage bit. You pay for that, sometimes harshly. It is often better for the parents to take out a traditional mortgage and have the heirs pay the interest payments.
Can’t argue with the long term care insurance though.
Sobering thoughts…