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Caregiving for Parents Part III - Balancing Your Plan with Your Parents Plan

Matt Meline

, CFP®

Founder and CEO

Thursday, August 12, 2021

Many baby boomers who are preparing to retire also play a role in another retirement: their parents'. Perhaps you've anticipated caring for an aging parent and already incorporated it into your plan. Or maybe a parent's sudden deterioration has thrust you into a caregiving role unexpectedly. These four steps will help you cover your parent’s needs without throwing your own retirement planning off course.

1. Adjust to Your New Normal

As your parents age, your relationship with them is going to change as well. The first time you notice that mom has trouble carrying grocery bags or dad can't keep your siblings' names straight will be jarring, and maybe even uncomfortable.

Try to be mindful that after raising you and providing for your family, adjusting to these changes is even more challenging for your parent than it is for you. Your parent might resist an extra helping hand, let alone a more serious intervention such as in-home nursing or assisted living. Keep discussions about care as positive as possible. Patience has been Lisa and I’s greatest challenge during these times, but tends to pay off in a more peaceful transition.

2. Assign Responsibilities

Once it becomes clear that your parent is aging into a new stage of life, contact close family and friends and be open and honest about your parent's condition. If your loved ones volunteer their time or financial resources, divide responsibility for your parent's care as much as possible.

If folks aren't as forthcoming about pitching in, don't be afraid to ask. This is a difficult situation that's going to trigger different reactions from different people. A shocked younger sibling who feels powerless might not realize how helpful covering a weekly grocery run could be. Other relatives and friends might be worried about overstepping their bounds.  It takes a village!

3. Gather Your Parent's Essential Documents

As a caregiver, you're going to need your parent's documents, including a driver’s license or other photo ID, Social Security number, Medicare or Medicaid plans, banking and investment information, and insurance policies.

You'll also need to familiarize yourself with your parent's estate plan. At the minimum, your parent should have:

  • Last Will and Testament memorializing last wishes and establishing beneficiaries for assets.
  • Power of Attorney authorizing someone of your parent's choosing to act on their behalf if they become incapacitated.
  • Healthcare Directive explaining how your parent wants to be cared for if they become incapacitated.
  • Living Will appointing someone your parent chooses to make important medical decisions if they can't.

It's also a good idea to have your parent introduce you to important service providers, such as doctors, accountants, attorneys, or financial advisors so you know whom to call in the event of an emergency.

4. Review Your Parent's Long-term Care Funding Plan

According to Genworth, 7 out of every 10 people will need to spend time in a long-term care facility at some point in their lives. Unfortunately, Medicare only covers short stays and rehabilitative care, and seniors who aren't living at the federal poverty level will be ineligible for Medicaid. And even for high-net-worth seniors, paying out of pocket can break a nest egg quickly. In 2020, the median annual cost for a private nursing home room was over $100,000. The median cost at an assisted living facility was over $50,000.

If your parent hasn't earmarked any assets for long-term care and they are still in reasonably good health, investigate long-term care insurance plans. There are multiple types of coverage, including plans that bundle life insurance, coinsurance with deductibles that work like traditional health insurance, and lump sum purchase options that could save you and your parent money in the long run. PrairieFire can help evaluate the best option(s) for your family.

Caregiving responsibilities can make your own retirement transition even more complicated. Just remember that we want to be a part of your support network. Let us help you sort through your options so that you can focus on preparing for your retirement and giving your parent the love and care that they need.

Be well,


Information presented is for informational purposes only and does not attend to make an offer or solicitation for the sale or purchase of any product or security. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed here.
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