By Megan Pacheco, Crosswalk.com
“A gray head is a crown of glory; It is found in the way of righteousness.” – Proverbs 16:31
“Do not cast me off in the time of old age; Do not forsake me when my strength fails.” – Psalm 71:9
Aging is a natural process and a non-negotiable part of life. But before we reach the age when we will personally require care, many of us will first face the privilege of caring for our elderly parents or other elderly family members.
According to the Department of Health and Human Services the US population is aging, and those 65 years and older will represent 19% of our entire population by 2030. Due to the increase in welfare, better healthcare and a drop in infant mortality rates we are living longer. This means we not only have to prepare ourselves for the fact that our elderly parents will be a part of our lives for years to come, but also that many of us will enjoy a much longer lifespan and therefore require care at some point.
God’s Word regards “older age” as a sign of wisdom and in Job 12:12 we read that “Wisdom is with aged men, with long life is understanding.” God admonishes us to care for those in our family who can’t take care of themselves. We should not view caring for our elderly parents as a burden, on the contrary, we should be prepared to seize the privilege and demonstrate God’s love and compassion to our older family members.
Unfortunately, many of us are financially unprepared and caught off guard when faced with the reality of having to provide care to our ailing parents. Rising levels of consumer debt, the fact that many have no other choice but to work way past retirement age in order to generate income, and the geographic distance between families, all create a tough reality.
So what can we do in order to position ourselves financially for the possibility of having to provide care for our older parents? What should we know about long-term care options that are available to us? Here is a great checklist to follow:
Position your finances
- Start living within your current income. No more overspending. No more spending more than you make.
- Eliminate all consumer debt. Being debt free will create options and flexibility.
- Pay off your mortgage. Once consumer debt is paid off, tackle your mortgage so that by the time you reach retirement age you have no more house payments!
- Save – both for short-term emergencies as well as for retirement.
Organize your paperwork
When the time comes to care for your elderly parents you do not want to face any legal roadblocks. Here are few items to put in place so you can make the transition a smooth one.
- Durable power of attorney—Gives a family member (or anyone) legal authority to make financial decisions on another's behalf.
- Health care proxy—Allows another party to make decisions regarding medical treatment.
- Living will—Outlines instructions for end-of-life care (For example, parents can say if they want to be kept alive by artificial measures).
Without these advance directives, a family member will have to petition the courts to be appointed the parent's legal guardian.
Do your homework on long-term care options
- Have a list of private nursing homes in your area (average yearly cost $77,000+); ask others who are using the facilities for references.
- Learn about assisted living options in your area (average yearly cost $40,000); ask about services that the facility offers.
- Care at home – According to the AARP, 90% of elderly parents prefer to live at home. Costs range depending upon the extent of care needed.
Keep in mind that Medicare does not cover long-term care and only those who have spent most of their assets qualify for Medicaid funding for a nursing home.
Cost of long-term care insurance
Avoid any surprises by learning about the financial cost that long-term insurance carries. Make sure you know what each option covers and more importantly what it DOES NOT cover. Here is a quick glance at long-term insurance care:
- Pays for home care, assisted living or nursing home care.
- A 50-year-old buying a typical policy—one that would pay a daily $200 benefit for 3 years with a 3% compound inflation option—is now $2,235 annually, according to the American Association for Long-Term Care insurance.
- Two options are available: Unlimited lifetime benefits OR fixed benefits—make sure you know what you are getting.
- The best time to buy long-term care insurance is between the ages of 55 – 64.
- Once you purchase insurance, the insurance provider cannot cancel or raise your rates based on changes in your health.
As you prepare yourself for being a caretaker, remember that this information will be of great use to you and your children when its time for you to be on the receiving end of care!
Megan is one of the new additions to the Finicity (provider of Mvelopes and Money4Life Coaching) team. She comes with over 13 years of experience in the Biblical Finances area. Her content has been published by Money Matters, Do Well and Lifeway's More than Living. She is a mom of two young boys, and lives with her husband David in the Atlanta area.
Publication date: August 12, 2013