When it comes to finances, millennials have the short end of the stick. Unprecedented student deb, a stagnant job market, skyrocketing real estate prices… the list goes on and on. And as the millennial generation creeps into its thirties and forties, another financial burden starts to weigh upon their shoulders: caring for aging parents who can no longer fully care for themselves.
The financial factors of becoming a caregiver to your parents fall into two main categories—tending to their health, and tending to their finances. While every situation will be different and require some unique solutions, there are some general tips we can share to help you manage the financial realities of caring for your aging parents.
Managing Health and Wellness
Becoming a senior caregiver is no small task, and based on your relative geography, work schedule, and other factors (like caring for young children) it may simply be too much to handle on your own. Luckily, there are options out there to help.
It’s often easier on everyone to look after an aging parent in their own home. Not only are they already comfortable there, but the associated costs are often lower.
- Personal Care Aides. A personal care aide can provide basic, at-home help to your aging parents. That can include everyday things like cleaning, cooking, and driving. Personal care aides are typically not medically certified, but they can be an important part of your senior-care support team. Their rates generally run between $8 and $15 per hour.
- Home Health Aides. Home health aides perform clinical services including physical therapy and in-home medical treatments or testing. They are licensed medical professionals, and are generally only necessary when there is a specific health need. Their rates also run between $8 and $15 and hour.
- Visiting Nurses. If a parent requires more serious or complicated in-home care, a registered nurse can be brought in to help. Their rates are considerably higher—usually between $25 and $60 per hour—but these costs may be covered by Medicare or Medicaid.
Unfortunately, it’s sometimes necessary to move your parent into a new home in order to better provide for their continuing care. They could move in with you, but that isn’t always the best solution either.
- Retirement Communities. For highly functioning seniors, a retirement community could be a great choice for a new home. These planned neighborhoods are specifically designed to make life easier on the aging and elderly, with routine home and property maintenance, planned activities, and other features readily available. Costs can be high, and there will be both up-front and ongoing costs to living there.
- Assisted-Living Facilities. For seniors who need some in-home help, an assisted-living facility may prove to be more cost effective in the long run than in-home care. Your parent or parents will have the support they need to remain fairly independent, plus assisted-living facilities often include valuable social activities for seniors. Costs start around $2000 per month, and can reach over $6,000 a month at some facilities.
- Nursing Homes. If your loved one needs more care, a nursing home may be the answer. These facilities offer nursing services around the clock, whether for short-term or long-term care. Costs can be as low as around $200 a day for a shared room, or up to $90,000 annually for a private room.
While the costs can be high, there is help available. Both Medicare and Medicaid are designed to help with exactly these sort of costs. Medicare focuses on providing for individuals age 65 or older, while Medicaid provides relief for people with a limited income.
That being said, healthcare costs have a way of adding up fast—and this can be especially true with seniors. In order to properly plan for your parents’ care, it’s important to be realistic about the monetary needs that are involved. While some of the options we explored above are more affordable than others, they may not provide enough coverage for your parent or parents to live the life you want them to.
One final stat—while only 5% of the 65-and-over population resides in a nursing home, that number increases dramatically as age increases. By the age of 95, there is a 50% chance of living in a nursing home, and in general the older your parents get, the more it’s going to cost to provide them with the support they need.
As you plan for your parents’ care, be sure to consider whether or not they can be claimed as dependents on your taxes. This could provide additional relief, but in general the only way to make sure you’ll have the money needed to provide for your parents is to start saving early.