Financial planning for long-term care to lessen stress, burdens
I recently attended an auction for the property of a good friend’s mother. A family homestead for decades, it had a pond, barn, big house and plenty of land.
After the father passed away and the mother began aging, a plan was needed to help her maintain control and independence while reducing the stress for everyone involved. The good news is that she is now closer to family, has secured a high property value, and the entire family likely has a lot less stress managing her needs.
Aging is a process we all go through, and the decisions a family makes now can either create or eliminate stress.
One caregiver who is dealing with this issue is Scott Kerschner, who is caring for his mother.
“I have so many wonderful memories of my parents as a child, as a young adult, and as a mature adult,” he recalled. “I’ve have the privilege of having the best parents anyone could ever ask for. As they’ve aged, so have their needs, which is normal.
“But this can be a very challenging time for those who are caregivers. After losing dad on Christmas day 2021, I’ve had to be the sole primary caregiver for mom. The challenges are visiting mom and being Scott her son vs. Scott her caregiver. When I visit, she typically would say, ‘Son, I have a list of things I need you to do.’
“The hard thing to prevent is letting resentment creep in. It will cause you to dread visiting and cut your visit short,” he admitted.
Here’s how to put a plan in place:
Retirees can experience a high level of emotional and physical stress when faced with the reality of an aging parent. The roles are now reversed. Moreover, someone in their 50s to 70s may find themselves caught between caring for their aging parents and helping adult children who may be facing their own challenges. The financial burden and multiple disruptions can be overwhelming, making it difficult to balance the stress of retirement while supporting their loved ones.
Then, there’s the complexity of navigating the world of unknown issues. Americans face a confusing healthcare system when it comes to understanding what expenses are covered and what are not. Managing a care plan can be time-consuming and costly for the caregiver. In my experience, it’s important to help not only the caregiver but also the parent to avoid isolation, and to seek proper professional support.
Sometimes, the lack of proper legal documents can create a financial nightmare. It’s crucial to have updated estate plans, such as wills, trusts, and power of attorney documents, and to review beneficiary designations on all assets. One simple mistake could be costly to the entire family.
I met with a family who waited too long, and since the mother was no longer able to make financial decisions, it resulted in what I believe were wasted taxes, probate fees and confusion.
What is at risk? In Ohio, a lot. Depending on the level of care needed, costs can range from $1,500 to $9,000 a month. Most of this is paid out of pocket unless coverage is in place beforehand. Think Medicare or Medicaid will cover it? Think again. In many situations, without proper planning, the family will be asked to write the check. This is why families can easily be wiped out financially.
The good news is that there are solutions for both families looking to plan ahead and those in crisis. I believe there are at least these four options:
- If you’re young and healthy, consider purchasing long-term care insurance, annuities with riders or life insurance with long-term care benefits.
- Look for rate guarantees, and take the time to understand how the policy works.
- If you’re unhealthy or in a crisis situation, learn about Medicaid planning and veteran benefits.
- Understand the resources available, and know that there are solutions.
The risk of needing long-term care is high. Many studies suggest the average retired couple faces up to a 65 percent risk of needing long-term care in their lifetime. I can’t think of many families that would face a 65 percent risk of needing to file a claim for home or auto insurance without having coverage in place.
When it comes to your health, think about that risk. Plus, think about the benefits of planning ahead. Without a proper plan, it can turn into a crisis and financial disaster. But with a well-thought-out plan, the aging process can become a smooth transition into the golden years.
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