6 Financial Strategies When Caring for Elderly Parents

It’s becoming increasingly common for adults to become caregivers for their parents in their later years. With one's parents resources tapped out from increased medical expenses, nursing home expenses, or from a lack of planning, the child-adults -- many of whom are getting ready for their own retirement -- are suddenly thrust in the role of helping their parents both financially and otherwise

Considerations Before Deciding to Care for Your Elderly Parents

You probably know your parents as well as anyone. You know whether they are proud or easy-going. Yet, you may not know how things have changed for them. You may want to help; however, they may not be ready to accept. Before even broaching the subject, look for signs that they may need help:

• Do they talk about buying unusual items? Or, do they talk about not making customary purchases?
• Check the fridge and cupboards. Does it appear they are buying less food than usual?
• Are they taking their medication when they should and at the proper dosage?
• Is their home or apartment in any disrepair?
• Are they not going out as much? Do they appear less social?

These could be signs that they are in some financial stress. You may also want to look for common signs of the onset of dementia or any physical ailments you haven’t witnessed previously. If you see any of these signs, it may be time to talk.

If you feel they need help, consider strategies regarding how you may be able to assist them.

Assess Your Parents' Situation

Discuss your parents' budget with them  or review their checkbook to determine their typical spending.  If they have not shared it with you recently, try to get an understanding of their investable assets, including cash accounts, IRAs, and other assets.  If they are not confident about their assets or they seem to forget, review their files to help them determine what they have.  If they have a financial advisor, get their permission to talk to that individual.  

Make a Budget

Once you have an idea of what your parents are spending and their net worth, set a budget that can help them maintain their required standard of living.  If they have enough assets to maintain their needs -- great!  You may merely need to help with bill paying either through online bill pay or setting up automatic payments.  If your parents do not have a power of attorney and they would be willing to have you act as attorney -in-fact, ensure that your parents get this document in place.  

If your parents need financial assistance, you will need to review your own budget to determine if you can help.  it is important to continue to plan for your retirement while making adjustments in your lifestyle to help your parents.  As with all financial choices, these choices become a matter of setting priorities.

Avoid New Debt

Ideally, you will not need to take out new debt to cover your parents expenses. If there is equity in their home, you may review whether a home equity line is an option or if a reverse mortgage makes sense for them.  There should be other options before you have to increase your individual debt.

Seek Help From Your Employer

Some employers offer paid family leave for people caring for a sick or elderly person. It would only be temporary; however, you would be able to take a little time off to care for your parents and plan your next move.

Don’t Fear Government Assistance

If you’re parents are well-off financially, this won’t be an issue for them. However, government assistance may be an option if their finances are strained.  Perhaps your parents may qualify for:

• Medicaid/Medicare
• The Supplemental Nutrition Assistance Program (SNAP) benefits
• The Temporary Assistance for Needy Families (TANIF) benefits
• Veterans benefits
• Help with utility bills and other services from your local government
• Low-cost, subsidized cellphone service for seniors

The eligibility requirements for receiving some assistance is need-based, but it may be worth reviewing for your parents. 

Secure Help from Other Family Members

Your siblings or other extended family may be in a position to help financially or otherwise. It may be wise to come up with a solution as a group rather than merely going to family asking them for money.  These issues are often delicate and some families will pull together while others may be further strained. It is important to keep a positive attitude and realize that getting through difficult times may rest more heavily on your shoulders.