Even if your parents are active and healthy, there comes a time when you realize they may need a little help as they age.
While I'm hopeful that my parents, who are in their early sixties and in good health, won't need much assistance from me for another 10 or 15 years, I've already started asking about their retirement plans and what they'll expect of me in the years to come. Growing up, I saw my mother and her siblings care for my grandmother for decades, which was both rewarding and challenging. And as an only child, I can't help but think how much harder those tasks could be without siblings to consult with and share responsibilities.
An estimated 10 million millennials are already acting as caregivers for a parent, in-law, grandparent or other adult, according to a recent report by AARP's Public Policy Institute. In time, more of us will step into this role. "Economic factors, including the student loan crisis, stagnant wages and the rising cost of elder care, are combining in a dangerous way that makes caring for aging parents different for millennials than it was for previous generations," says Grace Whiting, president of the National Caregiving Alliance. The AARP report found that millennial caregivers spend an average of 21 hours a week caring for older adults, and those with out-of-pocket caregiving expenses spend nearly $7,000 a year on caregiving-related transportation, home modifications, legal fees and medical costs, which can put a significant strain on your career and financial goals.
Have the talk. Even if your parents are still relatively young, it isn't too early to ask them what they might need and what they expect of you as they age. Start with their retirement goals and finances--when they hope to retire (or cut back on work) and where they want to live. There's no need for them to divulge every detail of their finances and plans. Instead, aim to get a sense of both their financial and physical health, says Jeremy Torgerson, founder of nVest Advisors, in Brighton, Colo. Also ask your parents what their expectations are for later in retirement, when they may need help on a daily or weekly basis--who they hope will provide that assistance and how they'll pay for it.
The cost of paid long-term care adds up quickly. Medicare typically won't cover home health care, adult day care or nursing homes. The median cost of a home health aide nationwide is $22 per hour, or almost $46,000 a year for 40 hours a week, and a private room at a nursing home averages $267 a day, according to Genworth Financial. Do your parents have a long-term-care insurance policy to cover at least some of these expenses? Or do they plan to rely on other sources, such as savings or the sale of their home, to cover the costs? Find out whether they expect to live near you or one of your siblings--perhaps they would move to a retirement community in your city. Or they may be counting on you to visit frequently, or even hope to move in with you.
To avoid legal and financial problems if an illness or accident occurs, ask your parents where they keep estate-planning documents, including a will and powers of attorney for finances and health care.
Such topics aren't easy to discuss, and families often need to start small, says Carol Craigie, a certified financial planner in Denver who runs online classes for adult children and their parents. Talk about general concerns at first and get more specific over time.
As for my family, we have penciled in a time to chat during my visit with them next month. We'll pour some wine and talk about their recent trips to potential retirement destinations. I also plan to ask how their retirement savings are shaping up and what role they're hoping I'll play as they get older. With any luck, there will be good news, a few laughs and a general agreement about plans that I hope we won't need to use anytime soon.