submitted by Joe Beckford
As medical technology has improved, so have the quality of life and the average life expectancy. With more years together and more memories to be made, families now must consider how to care for the elderly. As your kids go off to college, you now might have to decide how to care for a new group of residents, your parents.
With advanced age comes increasing difficulty with living alone. Not only does physical health decline with age, but memory and cognition can also become seriously compromised. Alzheimer’s disease is more common than ever before, and the older a person gets, the more likely they are to develop the condition. Every five years after age 65, the chances of acquiring the disease, double.
As a result, many middle-aged Americans have elderly parents who are becoming unable to live independently. The decision then becomes, do they move in with you or do they move into a dedicated assisted living facility? While certainly an emotional choice, it is also a financial one.
Your Newest Housemates...Your Parents.
When parents can no longer safely live alone, many instinctively plan to move their parents into their own house. While you might think this option is less expensive, there are other costs many do not consider.
If you do move your parents into your home, you will still have to account for their utilities, meals and medical care. Whereas, the cost of an assisted living facility will replace many of those costs and also provide 24/7 access to professional care.
Caring for an aging parent full-time can also be an emotional strain on your own family, leaving you burned out and your parents with less attention than they deserve. If you and your spouse both need to work full-time, and your parent needs constant assistance, an assisted living facility may be a better choice for all parties involved.
What's The Cost?
Assisted living costs around $3,500 per month. Unfortunately, many seniors have not planned ahead for their long-term care. If your elderly parents need to live in a long-term facility, you should first consider your budget. For many seniors, their home is their most valuable asset. Selling or renting the house may help cover the costs of assisted living. Reverse annuity mortgages may also be an option, allowing your parents to support themselves, without having to sell the house.
How To Save Money On Assisted Living
So, how can you minimize the overall costs associated with assisted living, for your parents, and for your own retirement? Here are our suggestions.
- Plan ahead. Don’t wait until the last minute. Start looking into senior living communities for your parents before they actually need one.
- Ask about pricing. In some cases, an assisted living facility’s cost may be negotiable. When in doubt, ask.
- Look elsewhere. It’s natural that most people want to be near their elderly parents, even if those parents are in assisted living. However, assisted living costs can vary substantially from place to place. Alaska and New Jersey have some of the highest average monthly costs, while Kentucky and Michigan tend to have much more affordable prices by comparison.
- Bridge loans. A bridge loan can be a short-term solution if your parents’ need for assisted living and daily care is urgent enough that you cannot wait for their house to sell.
- Reverse mortgage. Reverse mortgages are available only to homeowners over the age of 62. It allows them to convert some of their home’s equity into cash, which can be helpful in paying for assisted living expenses.
- Long-term care insurance. For this, you’ll need to start early. If your parents already need assisted living care, it may be too late to get them a policy, but it’s something you can consider for yourself and your spouse. Benefits can vary widely depending on your policy, but in many cases, Medicaid will fill any gaps.
Planning Ahead for Your Future
Chances are, you’re reading this because you need to make arrangements for your parents. However, you too may very well reach a point when you can no longer safely and comfortably live alone.
Financial planning is essential to make sure that you’re able to afford long-term care. By planning ahead now, you can save support yourself in the future without becoming a financial burden for your loved ones.