What everyone should know about caring for aging parents

You might have a plan for your own retirement — but do you have a plan for helping an elderly parent through their retirement years?

If you don’t, it’s time to start thinking, prioritizing and having some potentially difficult conversations with Mom and Dad. Organizing a family meeting can help everyone prepare when it comes time to care for an older parent or aging family member.

“Most adult children fail to realize that their parents will need financial or caregiving support as they age and that they will likely be the ones who have to provide that support,” says Cameron Huddleston, author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

Since Haven Life deals in affordable term life insurance, we’ll note right away that ensuring your elderly parent has enough life insurance coverage to cover things like funeral expenses is an important part of the caregiving planning process. “Debt can get passed on to adult children if their parents don’t have adequate life insurance to pay off these debts,” explains Andrea Woroch, a money saving expert who helps women prepare for their families’ financial needs.

That said, even the best life insurance policies can’t prepare you for all of the challenges associated with caring for aging parents. We reached out to three financial experts to learn what you can expect as your parents age — and how you can help your parents navigate their retirement years in a way that gives them the most choices and best options.

Aging in place might be more challenging than you realize

If you ask your parents how they might like to spend their senior years, they might say something along the lines of “aging in place” — that is, remaining in the family home for as long as possible. That means a primary caregiver may need to come into their home in order to provide the elder care aging adults need.

“Aging at home is the dream, but it is very difficult,” says Jacqui Clark, a Certified Senior Advisor™ (CSA™) and aging expert with Aging Well Partners and CarePatrol.

Huddleston agrees. “Seven out of 10 adults who survive to the age of 65 will need long-term care, according to the Department of Health and Human Services.” While that statistic may conjure up images of nursing homes and medical facilities, be aware that skilled professional care is extremely expensive — many facilities cost between $50,000-$100,000 per year — and your parents may end up aging in place simply because that is the most affordable option.

“Most people who need care end up relying on family members to provide that care,” says Huddleston, “often because they can’t afford professional care.”

This means that adult children need to be prepared for the realities of becoming their parents’ primary caregivers — and to begin planning for that reality while their parents are still relatively young, healthy, and able to make decisions that will influence their later life.

Make choices now that give you more choices later

“If you don’t make choices now, you won’t have the choices you want in the future,” says Clark. “How you plan is how you age.”

What does this mean for you and your parents? In some cases, it may mean checking to see if your parents or aging relatives have living benefits riders — such as long-term care insurance or the ability to waive premiums if the policyholder becomes disabled — added onto their life insurance policy. In other cases, it may mean having conversations about budgeting, nutrition and the importance of staying active.

“We all age differently based on what we did earlier in our life,” Clark explains, noting that people who put in the proactive effort to stay healthy as they age often have better long-term outcomes.

You should also think about making choices that will help your parents stay financially healthy as they age — and give you the ability to help manage your parents’ finances as necessary. “If you’re doing well, consider buying long-term care insurance or life insurance with a long-term care benefit for your parents to pay for their care if they need it,” advises Huddleston. She also suggests asking your parents to prepare a list of all their financial accounts, insurance policies, estate planning documents and so on. This list should include account passwords as well as contact information for any agents, accountants or lawyers associated with the accounts.

If your aging family member doesn’t feel comfortable sharing their financial information with you right now, ask them if they might consider getting it organized anyway — just in case. “They can hang onto the list, but ask them to tell you how to access it and under what circumstances you can access it.”

Have difficult conversations as early as possible

When is the best time to start talking to your parents or aging relatives about what they might want and/or need as they age? “The right time was yesterday,” says Clark, noting that children should begin these often-difficult conversations not only while their parents are still healthy, but also while their parents are still able to make active choices that might give them more options — and a better experience — later on.

Huddleston agrees. “Conversations with your parents about their finances need to happen while they are relatively young and healthy. This means talking to them in their 50s.” These conversations can begin with a discussion of your parents’ retirement plans, but should also include questions about long-term goals and long-term care. Adult children can use these conversations to help their parents plan for everything that might happen as they age, while collecting information that can help them prepare for potential issues down the line.

“If you wait until a health crisis makes it necessary for you to get involved with your parents’ finances, you might not have the legal right to access their accounts and pay their bills or make health care decisions for them if they haven’t already named you their financial or health care power of attorney,” explains Huddleston. “If you wait until your parents show signs they need financial help, you might not have taken steps to get your finances in order to provide that help to them. And if you wait until your parents need long-term care before talking to them about it, you’ll likely find out that you are your parents’ long-term care plan.”

Know when it’s time to step in

Many parents may either discourage their children’s necessary questions or actively refuse their children’s help, under the guise that they are perfectly capable of caring for themselves. How do you know when it’s time to step in and/or take over?

“Look for a progression/decline in health,” advises Clark. “The first thing [parents] need help with is usually housekeeping, meal prep, shopping, and/or errands.” While many adult children can help their parents manage these day-to-day tasks without becoming too involved or taking away too much of their parents’ independence, know that helping your parents set up a grocery delivery service is often the first step in a long caregiving process — and that you’ll probably be playing an active role in your parents’ day-to-day care sooner than you realize.

“Medication management is the tipping point of decline,” says Clark, noting that when parents are no longer able to take needed medications as scheduled, it’s time for adult children to step in — and be ready to step up. “When medication management is needed that’s a red flag of larger changes coming. Next could be mobility issues, and then cognitive issues. Sometimes the last three come at the same time.”

Even if your parents remain both mobile and cognitively alert, you’ll still want to be prepared to step in — especially if your parents are likely to make poorly-considered financial decisions that could limit their options in the future.

“Even if your parents are in good shape financially and remain healthy, you still might have to get involved with their finances as they age because financial-decision-making ability declines as part of the natural aging process,” Huddleston explains. “That means you might have to devote time to helping aging parents stay on top of their finances and avoid becoming victims of scams and fraud. Trust me, as your parents age, you’ll be spending a lot of time helping them fend off scammers.”

Prioritize your financial needs

Helping your parents stay on top of their finances can be challenging enough — and many adult children find themselves with the double challenge of balancing their own financial needs against those of their parents. A recent Associated Press-NORC Center for Public Affairs Research study revealed that 80 percent of caregivers cover at least some of the costs out of their own pocket, with 43 percent of these caregivers withdrawing money from personal savings and 23 percent reducing their retirement contributions.

How can you prioritize your own financial needs when your parents may need you to prioritize theirs? As with all aspects of long-term caregiving, it’s best to start preparing for any potential financial issues as early as possible. “Get your own finances in order by paying down debt, building an emergency fund, saving for retirement and having adequate insurance before you have to step into the role of caregiver,” advises Huddleston.

Woroch agrees — and reminds us that prioritizing retirement savings now could prevent our children from finding themselves in a similar financial bind in the future. “You have to prioritize your retirement savings if you have children so you don’t continue the trend of placing financial burdens on your kids. This may mean postponing college savings — your children can take a loan out for college but you can’t take out a loan for retirement!”

Focusing on your own financial security can even help you have some of those difficult but necessary conversations with your parents — especially if you start early. “There are a variety of ways adult children can start talking to their parents about their parents’ finances before an emergency,” says Huddleston. “For example, you could mention that you recently bought life insurance and were wondering what sort of coverage your parents had. You can also use a current event such as the pandemic to ask about what sort of emergency planning they’ve done and whether they have legal documents such as a will, power of attorney and advance health directive or living will drafted.”

The more you share about your own financial priorities, the more your parents might open up about theirs — which can be the best way to find solutions that balance everybody’s needs.

Understand how your demographic may affect your caregiving experience

Caregiving is a “one size fits one” experience, as Jacqui Clark puts it — and it’s important to consider how your age, demographic and cultural background might make your caregiving process different from other people’s.

“My mother was Mexican, my father Irish. My Mexican culture dictates we take care of our parents to the end no matter what, and me and my three sisters did,” Clark explains. “My mother passed in 2019 from dementia and my parents did not have resources to pay for private services had she needed them. We were fortunate to keep her home, but it was because her four daughters and my dad, plus my sisters’ husbands and her grandchildren all pitched in.”

“There’s an expectation in many cultures that children will care for their parents as they age,” notes Huddleston. “Relying on paid professional care is out of the question — even if the parents or children can pay for that care.” 

If the parents or children can’t afford the costs of care — whether at home or in a skilled nursing facility — caregiving becomes even more complicated. “Adult children who are struggling financially will be put in an extra tight spot because they can’t afford to leave a job to care for a parent,” says Huddleston. “Fortunately, there are government benefits, such as Medicaid (but not Medicare) and veterans benefits, that can help cover the cost of long-term care for low-income adults. So I would recommend that anyone who is struggling financially to look into what benefits their parents might qualify to receive to lessen the financial burden on them.”

If you belong to a minority demographic or a culture that has been historically disenfranchised, you probably already know that your caregiving process might be more difficult and/or more complex. The American Psychological Association recently released a study titled African American Older Adults and Race-Related Stress, noting that “Limited access to community resources (e.g., grocery stores, pharmacies, culturally competent health and aging service providers, transportation, housing, etc.) significantly contributes to the experience of race-related stress and creates barriers to achieving healthy and productive aging.”

Huddleston agrees. “Research has found that family caregiving is more prevalent and more intense for minorities. Minority caregivers also tend to suffer more health issues than other caregivers as a result of their caregiving duties. I think it’s very important for minority caregivers — and any caregivers — to develop a strong support system. Don’t assume that you need to do this alone.” 

If you share caregiving responsibilities with siblings, try to build a shared support system as quickly as possible. Unless adult children with siblings agree in advance to work as a team, they may find themselves arguing about who is taking on an unfair share of the caregiving burden, whether one sibling is making a larger financial contribution or another sibling is doing the bulk of the in-home care. 

To mitigate some of these arguments, Woroch suggests dividing responsibilities based on ability, proximity and similar factors. “For siblings who do not live nearby and cannot provide actual physical caregiving, perhaps they can help with managing household expenses and bills,” explains Woroch. “For siblings who are unable to provide financial support, perhaps they can do more of the in-person caregiving, driving to/from appointments, managing bills and household chores, etc.”

Lastly, a brief note on the sandwich generation — that is, the no-longer-limited-to-a-single-generation demographic of adults who are caring for both parents and children simultaneously. In 2020, Haven Life released a Sandwich Generation Report that indicated 80% of sandwich generation members feel “overwhelmed often or constantly.” Over half of those surveyed reported adjusting their retirement goals in response to caregiving responsibilities. 

“Caring for children while caring for an aging parent compounds the stress of being a caregiver,” says Huddleston — and Haven Life’s report indicated that the majority of survey respondents wanted some kind of long-term support to help them manage this stress, including regular interactions with a mental health professional.

If you’re sandwiched — or if you anticipate being sandwiched in the future — take our advice and start planning now. Get your finances where they need to be, have the difficult conversations with your parents (and the potentially difficult conversations with your children about changes to the household budget and/or college savings plans) and do your best to build a social and mental health support network that can help you manage the challenges to come.

Because if there’s one thing that everyone should know about caring for aging parents, it’s that it’s going to be much more challenging than you realize.