In recent months, there has been a surplus of articles concerning couples approaching retirement age who suddenly realize that a significant part of their time, and perhaps treasure, may be devoted to caring for their parents who can no longer care for themselves. Because families tend to be more spread out geographically than in the “old days”, the burden of care may fall on the sibling who lives closest to their parent(s). The July, 2011 online version of Smart Money magazine indicated that the National Alliance for Caregiving estimated that more than 49 million Americans care for someone over the age of 50. A MetLife study found that a person over the age of 50 will lose an average of $304,000 in wages, benefits and accumulated wealth while caring for a parent. That number appears to be overstated, but, from personal experience, I can confirm that time and money do come into play in the care of a disabled parent. Even more apparent is the stress amongst siblings involved in the caregiving decisions. If you are anticipating or participating in a similar situation, you might go online for “The 50-50 Rule” from Home Instead, according to the October 2011 Financial Planning magazine. This is a firm that provides nonmedical caregiving to seniors, and the guide is a set of free, web-based materials that can help adult children consider the many options for caring for an aging parent. The guide points to online resources, suggests ways to sidestep potential problems and provides advice on hypothetical situations. Since I recently became the proud owner of my first Medicare card, I should probably forward this information to my children.
Every family has finite resources available for the sustenance of the household. Planning for the care of a parent has to be part of your financial plan. Here are a few ideas gleaned from the March 2011 Registered Rep magazine. Assuming that your mom or dad (or both) have IRA’s, take more than the RMD (required minimum distribution) to help offset expenses. For 2012, if a single person has $35,350 or less in taxable income, they will remain in the 15% bracket. Also, even though it may require using some of your own funds, make sure that your parents insurance coverage is established and in place. For example, supplemental health insurance through a Medigap policy has to be maintained. Long term care insurance obviously is very important and should be kept in force if at all possible. A relatively small expenditure now could provide thousands of dollars in future benefits. If there is life insurance in force, make sure the premiums are being paid. If you have to help pay these premiums, it will probably be money well spent. Life insurance death benefits provide tax advantaged dollars to replenish expenditures that might have been made for uncovered medical or long term care expenses. When looking for funding to make up gaps in needed expenditures, don’t forget the possible equity in your parents’ home. As always, you should discuss your individual situation with qualified attorneys, tax and/or financial advisors.
Finally, consult with a qualified attorney and make sure powers of attorney for healthcare and financial matters are in place, as is authorization granting access to medical records under the Health Insurance Portability and Accountability Act, a will, a living will, etc. Putting a plan in place now will greatly reduce future stress and heartache. It should also help define the role of each sibling so that everyone understands the responsibilities required for assisting parents through a very emotional and challenging change in life. As we deal with these opportunities for compassionate care, consider these words from the editor of “Cooks Illustrated” magazine: “A few months back, a neighbor took me aside and offered a few words of kindness. Her manner was a tad different than usual: more personal, more focused. She had thought hard about what she was about to say and wanted her words to make a difference. They did. It was a familiar face with an unfamiliar message. Words of kindness at the right time can be something truly new, not the same old thing.” For, as it is written in an Episcopal collect, let the whole world know that things that were cast down were raised up and things that had grown old are being made new…by Him through whom all things were made.
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