It’s no secret that life is capable of throwing financial curveballs. We’ve all been hit by a bill we didn’t expect or had to sell company stock at a disadvantaged tax position to cover a hefty tax bill. Most of these unexpected expenses directly impact us and our lives. However, if you’re part of the sandwich generation with kids who are young adults and parents who are aging, you have another set of expenses to worry about – your parents.
People rarely think about how they would navigate caring for their aging parents. But it’s becoming more and more common for adults in their 40s and 50s to contribute to their parent’s lives once they become unable to fully care for themselves. Although this expense may feel “unexpected” it’s something you can start thinking about and planning for in advance. Even if you don’t end up needing to care for your parents, preparing ahead of time will give you the flexibility to do so without derailing your own financial goals.
Let’s talk about the best way to start the financial conversation with your family, and how to start planning ahead behind the scenes.
Start With a Conversation
First, it’s wise to speak with your siblings or close relatives first. Knowing who is willing to step in and help either by contributing time or funds to your mom or dad’s care can help you plan ahead. It can also help you to approach your parents together as a family, rather than having mismatched expectations across the board.
When you talk to your parents, you should approach the conversation with respect. Most parents never imagined they’d be in a situation where their kids are financially responsible for them. In most cases, parents who need financial or lifestyle support are experiencing a decline in their health. This alone comes with an overwhelming sense that they’ve lost their freedom, so it’s important that you (and your siblings) don’t add to that.
Being honest about your concerns, whether it’s for their living situation or their health, can help to start the conversation. From there, be open to their wishes. Your parents, although they may not want to admit that they need help as they become unable to care for themselves, have likely thought about this. They may surprise you by bringing ideas of their own to the table.
Understanding How to Support Parents Financially
Depending on your parent’s unique circumstances, there are several ways you might look to support them financially:
- Medical care. Anyone who has had a parent with health problems such as dementia knows that medical bills can start piling up – and not everything is covered fully by Medicare. If your parents need help from specialists who will dramatically impact their quality of life, incorporating their medical costs into your budget can be one way to contribute. Keep in mind that if you choose to cover a portion of their medical bills, you may be able to pay the hospital or facility directly in order to avoid the gift tax.
- Housing. Depending on their situation, your parents may look at several housing options if they’re unable to care for themselves. Memory care facilities can be fantastic options for people with dementia or Alzheimers, and there are many condo or apartment communities specifically geared toward aging retirees who need additional physical assistance or health support. However, your parents may only need to downsize to a smaller home closer to a family member who can support them, and outsource cleaning or yard work that they’re unable to do. You might look to help them cover the cost of a new living facility, or help to facilitate outsourcing chores, yard work, grocery delivery, and other taxing “to do’s” to make their lives easier as they age.
- Combining Households. In 2018, 14% of all adults living in someone else’s household were parents who had moved in with their adult children. For many families, this is the ideal option. However, combining households may come with unexpected costs. For example, you may look to update part of your house to accommodate your parents, especially if they have accessibility needs. You may also be taking on extra costs when it comes to getting groceries and household supplies, or even an increase in utility bills as you’ll have one or two extra adults in your home.
- Covering Expenses. Your parents may be content to continue living on their own – but find themselves unable to adequately support themselves financially for one reason or another. If this is the case, you and your spouse or partner could look to support your parents by covering specific expenses. You could cover transportation, utilities, food or groceries, a lawn service, etc. Sometimes picking up smaller expenses can make it easier for your parents to cover larger medical bills, or other financial roadblocks they’ve encountered as they age.
The Non-Financial Element
As you and your siblings or close family members look to support your aging parents, it’s easy to only look at the dollars and cents. However, there’s a notable non-financial element that comes with caring for your parents as they get older. Dividing expectations across family members to include both financial and emotional support for your parents can help to ensure that no one person is taking on too much.
For example, if you (or a sibling) are having your parents move in, it may make sense for other siblings to contribute financially to help cover medical expenses. At the end of the day, there is no perfect way to prepare for the emotional element of caring for your aging parents, but with open and honest communication you can form a tentative plan that your whole family is comfortable with.