Americans are entering retirement in greater numbers than ever before as baby boomers age. This generation is also expected to live longer on average than their parents. As a result of hard work and planning for their financial futures, they will have more years to enjoy the fruits of their labor.
However, longevity also comes with a price. Chronic conditions associated with aging can increase the chances of this generation needing long-term care, and retirement plans can be derailed by unplanned long-term care expenses. Many recent studies have found that families are concerned about the affordability and impact of long-term care costs.
Are you discussing your long-term care needs with your family members? People may anticipate that discussing long-term care needs with family members may be uncomfortable, particularly if they are concerned about placing a potential burden on other family members. Most people worry more about long-term care being a burden on their families than they do about depleting their retirement savings.
Relying solely on Medicare or Medicaid to hire help for long-term care can be a mistake. Medicare does not cover most expenses related to long-term care services and support. Medicaid is only available to those with limited assets and income.
It’s important for families to get on the same page and start conversations now to protect everyone going forward. Often people assume their spouse will be their caregiver. Parents assume their children will take care of them. Families who plan early will benefit from being able to check assumptions, do the research, and plan for how their loved ones want to be cared for.
Here are five areas to start your family conversations:
Care
Let your loved ones know your preferences and concerns, and make sure you know their preferences and concerns in turn.
As you advance in age, do you want to stay in your home? Downsize? Consider alternate living arrangements?
Would your spouse be physically able to provide care for you if needed? Would you be physically able to care for your spouse?
As a parent, would you feel comfortable having your children provide care?
As a son or daughter, would you be able to take time from your own career and family to provide adequate care for a parent?
Caregiving
While caregiving is very noble, long-term care can involve some of the most intimate aspects of daily living. Familiarize yourself with what long-term care can entail.
Do you have concerns about being able to adequately care for another family member if they needed it? Do other family members have similar concerns?
Does anyone in the family have caregiving experience or know someone who has? What has that been like?
Health-Related Decisions
Designate who has authority to discuss medications and treatment and inform your physicians. Give your designee the contact information for your doctors.
Are your children comfortable with making health-related decisions for a parent?
Are you comfortable with making health-related decisions for your spouse, and vice versa?
Finances
Let your loved ones know how you will cover the costs of care. Also establish who will have the authority to manage your finances, such as paying the household bills.
Do you know what professional care costs?
Do you know what Medicare/Medicaid pays for?
Have you thought about which assets you could use to pay for professional care, and how that might affect you financially?
Legal
Make sure you and your loved ones have a living will, a current will, a durable power of attorney, and a power of attorney for healthcare.
Are your documents easily located by loved ones if needed?
Lastly, financial professionals can play a vital role in long-term care planning. Most people are not aware of all the ways they can help protect their retirement savings from long-term care expenses or how financial professionals can help facilitate conversations and create holistic financial plans.
Retirement is a well-earned state in one’s life. Start planning today. Build your long-term care plan. Reach out to me or your financial professional for additional information.
