Did you know that 70% of Americans over the age of 65 will need long-term care? That’s a pretty astounding figure, and highlights just how important it is for us all to consider the possibility of extended care later in life – both for ourselves, and increasingly, for aging parents.
It’s a sad fact that most of us will require daily care in some way, shape, or form. Preparing for the cost, preserving your savings, and saving your loved ones from the burden of care are necessary goals.
During our working lifetime we rightly focus on climbing the mountain to financial security. But intelligently addressing the possibility of needing extended care is essential to how we safely descend the mountain in our retirement years. As such, planning for long-term care is a vital component of a well-developed retirement and financial plan.
This is the first of a two-part series, and this part will focus on the personal impact on caregivers and managers of chronically ill dependents. Part two will address the economics and some possible solutions to consider as you plan for such events. My aim is to help you start thinking about care for those in your family, and develop a plan that will help ease your burden wherever possible.
The Personal Side of Long-Term Care
Providing care for a family member or loved one not only carries significant economic implications, but it also brings emotional, physical and psychological burdens. Additionally, those in the “Sandwich Generation,” may face the double whammy of caring for both children at home and aging parents, placing additional strains on time, resources, and family relationships.
Women are particularly affected, accounting for more than half of those caring for an aging parent. The unpaid labor takes a toll on women’s ability to earn and save as well as on their mental health.
Understanding Long-Term Care
First, let’s be clear about what long-term care really is. Long-term care is custodial care, not medical care. The industry definition focuses on either of two events: the inability to perform for yourself two of the standard activities of daily living (ADLs) or a reduced cognitive ability such that you cannot take care of yourself. Either of these results in the need for someone to help you each day. The ADLs are bathing, dressing, transferring (walking), eating, continence and toileting.
According to the National Institute on Aging, long-term care involves a variety of services that help people live as independently and safely as possible when they can no longer perform everyday activities on their own.
In most cases, a family member or spouse ends up becoming the primary caregiver to someone who needs daily assistance with basic care. When this option isn’t available, however, long-term care can be very expensive. Traditional health insurance does not cover long-term care, nor does Medicare.
For many people, an ongoing illness or disability triggers the need for long-term care. However, a sudden stroke, heart attack, or unexpected injury can cause an otherwise healthy person to need daily care, albeit temporarily. This distinction is important, since long-term care isn’t always long-term. Still, even a temporary setback in your health can be financially debilitating.
What Long-Term Care Can Look Like
Let’s consider a common scenario. Imagine that your mother has been exhibiting signs of dementia for a while now but your concerns are increasing due to her forgetfulness and loss of awareness. She simply should not be left alone for extended periods of time. Who will care for her?
Your father passed away a few years ago. Two of your three siblings live in the same town, but both work full time. Will one have to quit their job and have their family deal with the economics of reduced income?
The third sibling lives out of town, so how can they carry their share of the burden? And how do you avoid the potential, maybe inevitable, resentments of unequal responsibility to care for her? One of your local siblings has no children. Are they the default caregiver?
Family Dynamics Play an Important Role
Family dynamics immediately focus on how the cost of care will be handled. Mom has some assets that can be used, but is everyone comfortable with who has authority to write the checks? Does the sibling who is the best money manager have the time to look after another account?
Remember that mom’s health is compromised – and she gets confused. “Who are these people in my home? Why are they here? I do not want to pay someone to take care of me – I am fine.” The siblings gather for a family meeting. Two are very stable financially, but one is still struggling and has actually received money from mom more than once.
When mom needs full-time care, does it need to be in-home care or a top tier facility? Reducing her nest egg requires facing the possibility that her legacy plans for the children, for the grandchildren, for her favored charities, or others in the extended family may not happen. How does she feel about that – and how does everyone else feel?
Consider the Different Possibilities
Now, consider another scenario. Let’s change the situation a bit and say that mom is healthy but dad has had a stroke and really cannot get around on his own. How is mom going to manage getting him dressed each day – he is twice her size!
Feeding him may not be so challenging but handling the personal aspects such as continence and toileting can be exhausting and embarrassing for both mom and dad. How long will her health continue with this additional physical strain of helping him?
To consider what would need to be done and who is equipped and willing to help well in advance of the crisis is simply wise planning.
We encourage each family to have a discussion about these issues before they are faced with them suddenly and are pressured to react quickly rather than follow an established plan of action.
Don’t Delay Your Long-Term Care Planning
None of us want to be a burden to our loved ones as we get older. But planning for long-term care can be daunting—especially if you’re years away from retirement. That’s why seeking out professional guidance from a team like Abeona Wealth to help review your long-term care plan, or a plan for your parents, can be such a useful tool.
Making arrangements for your future sooner rather than later can help protect you and your loved ones from potentially exorbitant medical expenses and unneeded stress. If you’d like to discuss your options for long-term care, we’d love to hear from you.
Additionally, don’t miss our next post, in which we’ll discuss the economic realities of compromised health later in life.
This post was co-written with Steve Briggs, Founder of Petra Life Services