All in the family: as more GenXers care for aging parents, creative planning can help beat high costs.
FIVE YEARS AGO JAN BRYANT, GOVERNMENT relations director at a nonprofit television network, found herself in the sandwich generation--those who are furthering their careers and raising their families while at the same time attending to their elderly parents.
At the time, Bryant was in her mid-30s and living in New York City. But then her father received a diagnosis of congestive heart failure and required treatment unavailable where he lived in Oklahoma. After months of hand-wringing, Bryant, an only child whose parents had divorced in 1990, left New York and moved back to Denver--where her mother lived--with her father in tow.
For Bryant, the crisis was an unlikely way to bring her family back together. She, her mother, and father now live within four blocks of one another in Denver, and her parents get together daily and provide support to each other. "Financially, it was the only way to make it work," she says.
Aging or infirm parents are one of the biggest financial squeezes on Americans born in the 1960s and 1970s. By Census Bureau tallies, the number of Americans 65 years of age or older is expected to exceed 40 million by next year's census. At least 70% of them will need long-term care--help doing basic activities such as dressing and eating.
Until recently, the conventional wisdom was that older Americans had to move out of the homes they'd paid off and effectively bankrupt themselves to meet poverty guidelines and qualify for government healthcare assistance. Or they had to come up with the funds for costly assisted care. According to AARP, the average annual cost for a private room in a nursing home in 2007 was close to $78,000 nationwide. The annual bill for an assisted living facility came to an average of $ 35,628.
One way to save on care is to encourage seniors to stay in the home they've paid for, or in an affordable apartment. "I think among African Americans, the sentiment is, 'We take care of our own,'" says Karyne Jones, president and CEO of the National Caucus and Center on Black Aged, a Washington, D.C., advocacy group. "For people who have paid for their homes or can afford rentals on their Social Security or pensions, staying at home and perhaps having some services provided can actually save between $1,200 and $1,700 a month compared with living in a nursing home or an assisted living community."
People who want to help aging or infirm parents can use common sense and a little planning to make a difficult process a bit easier. There are several steps you can take to establish a sure foundation for the seniors in your life.
TALK IT OUT.
Start with a frank, heart-to-heart conversation between seniors and caregivers--sons, daughters, or other relatives. "At the center is good family communication," suggests Gaff Myers, a spokeswoman for New York State Office for the Aging. "The topics may not be the most comfortable, but talking is the only way to find out what older parents want and what you can do to help."
MAKE A LIST.
Next, you'll need to know just what funds and other financial resources you have at your disposal. Take inventory of your parents' assets including their home, retirement account savings, Social Security, and pension benefits. You might want to visit the National Institutes of Health Website, which offers a checklist of items to cover. Also, you and your siblings should also be honest about what you can each provide.
GET AN EXPERT PAIR OF EYES.
It is also a good idea to contact a local office of aging, an agency supervised by most counties and states. Set up an appointment to have someone visit elderly parents and assess their needs. Alternatively, many faith-based organizations have family services experts who can visit parents and draw up a list of considerations that will make their lives safe and comfortable.
Additionally, case workers are well versed in government funding sources that are extended to the elderly, whether from volunteer groups or the Department of Veterans Affairs. Finally, case workers can be an invaluable source of leads concerning agencies or firms that employ home care assistants.
GET THE DOCUMENTS YOU'LL NEED.
No one wants to imagine dire circumstances. Still, planning for the worst is sometimes the best preparation. If you plan to care for elderly parents, you should encourage them to draw up durable powers of attorney, a revocable trust, and a privacy authorization that complies with HIPAA, the Health Insurance Portability and Accountability Act. A durable power of attorney designates a trustworthy person of your parents' choice to manage their affairs according to their wishes. It's "durable" because the document stays in effect if your parents become ill or incapacitated, unlike a power of attorney, which does not. A durable power of attorney for healthcare allows that person to make healthcare decisions; one can also be set up to handle your parents' financial affairs. Even if the same person is handling healthcare and finances, separate documents are usually used.
A revocable trust places parents' property under the supervision of a designated trustee who can make financial decisions under circumstances outlined in the trust. Finally, because of healthcare privacy laws under HIPAA, a care provider should have his or her parents sign a privacy authorization that allows the provider to stay informed about important medical issues. Without it, your parents' doctors are not in a position to talk to you, even if you have a medical power of attorney.
Hermann Eisele, a St. Louis estate planning attorney with the law firm Weiss & Associates RC., recommends consulting with a lawyer who specializes in elder care issues. "I've seen people fill out downloaded Internet documents or have forms filled out at a service center that just do not have the proper terms and language," he says. "Cutting comers that way can create problems down the road." Eisele also says that a good elder care lawyer will help elderly parents screen possible designates for certain very critical abilities.
KNOW HOW TO HAKE FINANCES LAST.
Elder care costs can mount in a hurry. "Many people are under the mistaken impression that Medicare will foot the bill--it will to a very limited degree for care as a result of a medical procedure, but if you're depending on it for the long haul, you may be in for an unpleasant surprise," Myers warns.
A talk with a financial planner can help you and your parents stretch dollars. You'll need to know what are the best and most tax-efficient ways to draw on accounts and how to ensure that money earmarked for care is not only liquid but also earning the highest return. For parents whose homes are paid off, options such as a reverse mortgage may help (see HUD. gov for more information on reverse mortgages). Finally, a good planner will know about tax breaks offered to seniors who use home healthcare products and supplies.
LEARNING YOUR LESSONS.
The process of helping an elderly parent should function as your own wake-up call. Myers says considering long-term care insurance is one way to make sure that you're not a burden to your own children. Long-term care insurance can be expensive, but it's affordable if you obtain a policy in your 30s or 40s. Go to www. consumeraction.gov/insurance.shtml to find your state's insurance department, which provides a listing of companies that sell policies.
PHOTOGRAPHS BY DIANE HUNTRESS
1 The National Caucus and Center on Black Aged is an advocacy group that offers programs to assist African American seniors. www.ncba-aged.org
2 National Resource Center for Safe Aging has links to state and regional aging agencies www.safeaging.org/resources/regional/ regional_resources.asp
3 The National Institute on Aging (www.nia.nih.gov/Health Information/Publications/) offers a clearinghouse of free publications including Getting Your Affairs in Order, a guide to financial and medical documents.
4 The nonprofit organization H.E.L.P offers helpful guidance on legal and financial issues for the elderly. www.help4srs.org
5 National Academy of Elder Care Law Attorneys can direct you to local lawyers who specialize in care issues. www.naela.com